Quicker reform for Shanghai FTZ vowed

Foreign-invested businesses wait for more clarity, liberalization

Shanghai's mayor promised on Sunday to speed up development of China's first free trade zone a year after it opened.

The FTZ was set up in China's commercial hub of Shanghai last September with the promise of a range of financial reforms, including full convertibility of the yuan currency and free interest rates.

Mayor Yang Xiong said the government will work toward making the yuan freely convertible, among other financial liberalization plans for the FTZ, but gave no timetable.

"We will gradually put in place an institutional and regulatory framework to enable the convertibility of the RMB under the capital account ... so that the financial sector can better serve the real economy," he told business leaders in a speech.

Yang said the government would also offer a revised "negative list" of what is barred in the FTZ for 2015, following criticism that the two previous lists were too long.

"We will further liberalize the service sector by rolling out a series of new measures and compiling the 2015 version of the negative list," he said.

Foreign business executives attending the annual meeting, which bills itself as an advisory body to the city government, said they were waiting for clarity.

"The resulting time lag between announced and actually implemented reform measures has created an opaque picture that has led to a wait-and-see attitude among many foreign investors," Michael Diekmann, chairman of the German insurance giant Allianz, said in a paper presented at the meeting.

About 12,600 companies have registered in the FTZ since its establishment, of which 14 percent are foreign-invested firms, according to official figures.

"A lot of financial reforms in favor of liberalization have been announced but have not yet been implemented or not completely, such as the liberalization of the RMB," Gerard Mestrallet, chairman and chief executive officer of French energy firm GDF Suez, said in another paper.