The internet censorship applied throughout China will not extend to the Shanghai free trade zone, according to an article in the South China Morning Post. The government also reputedly plans to accept bids from foreign internet service providers to provide their services within the zone.
If this plan is enacted, operators in the zone will have access to global news and social media (including the New York Times and Facebook, which are banned in China) and search terms that are considered “illegal words” (like “export controls”) because of their sensitivity to the Communist party. The notion of not censoring web access within the Shanghai FTZ is an effort to make Westerners more comfortable and to realize the value of the FTZ when compared to other parts of China, according to an anonymous source in the South China Morning Post.
“Whether or not this will really help companies operating in China when these freedoms are cut off as soon as one leaves the zone is a debatable point. It seems more a publicity stunt to help promote the zone rather than anything of real consequence to international businesses,” suggests Chris Devonshire-Ellis, founding partner of Dezan Shira & Associates, quoted in the news magazine, China Briefing.
In bolstering the Shanghai FTZ, the government is subtly supporting the convertibility of the renminbi and its acceptance as a trade currency. Observers see it as a test bed of liberalization on multiple fronts, as it relaxes regulations of several industries. In August, the State Council agreed to suspend administrative approvals in laws covering foreign-capital enterprises, Chinese-foreign equity joint ventures and Chinese-foreign contractual joint ventures.
Shanghai’s FTZ is considered a competitor to Hong Kong, although Charles Li, CEO of the Hong Kong Exchanges & Clearing Ltd. told Bloomberg, “The zone will create a bigger pie.” He predicted that Honk Kong’s slice of that pie will grow along with Shanghai’s. The new FTZ was approved in July and is scheduled to formally launch Sunday, September 29.