Top legislature discusses Shanghai FTZ draft

BEIJING -- China's top legislature on Monday discussed a draft proposal on establishing a pilot free trade zone in Shanghai.

Approved by the executive meeting of the State Council, the China's cabinet, the draft proposal was submitted to the Standing Committee of the National People's Congress (NPC) for authorization to suspend related laws.

If the draft is approved, a "negative list" approach - a way of deciding what not to do, rather than what to do - will be employed in foreign investment management in the zone, to innovate opening up.

Foreign-funded companies will be allowed to be engaged in antique auction, according to the draft proposal.

The draft proposal concerns four laws, including Law on Foreign-Capital Enterprises, Law on Chinese-Foreign Equity Joint Ventures, Law on Chinese-Foreign Contractual Joint Ventures, and Law on Protection of Cultural Relics.

Commerce Minister Gao Hucheng said at the session on Monday that 12 items of policy, including canceling some procedures concerning foreign capital enterprises, and allowing foreign businesses to engage in auctions of cultural relics, are not in line with existing laws.

Gao suggested the NPC Standing Committee authorize the State Council to suspend related laws.

The State Council approved the pilot free trade zone in Shanghai on July 3. In the trial zone, goods can be imported, processed and re-exported without the intervention of customs authorities.

The Shanghai FTZ will be the first free trade zone on the Chinese mainland. It will take about three years to build the FTZ up to international standards.

The zone is expected to help Shanghai to cut costs of trade, improve efficiency, and promote financial services.