Other ports eye FTZ model

At the Waigaoqiao zone, companies have to go through two customs checks - at the port and at the FTZ - for clearance. This situation has prompted many multinational companies to turn to Hong Kong.

As of the end of last year, 403 multinational companies had set up regional headquarters in Shanghai, according to a government report delivered at the Shanghai People's Congress on Jan 27.

"Once the free trade zone starts operation, more and more multinational companies will be willing to make transitions to Shanghai. The trade flow will be smoother by that time.

"As long as the municipal government has a clear goal of combining the city's role of an economic, financial, shipping and trade center, Shanghai is sure to grow into the hinterland of Northeast Asia," said Chu.

Tianjin, for its part, expressed its intention of building up an FTZ long before China became a member of the World Trade Organization, which was in 2001.

The Tianjin Bonded Logistics Park obtained approval from the State Council in August, 2004. Ever since its dry run in May 2005, domestically made goods have been given tax reimbursement once they entered the park.

Authorities at the Dongjiang Free Trade Port Zone of Tianjin have aimed to transform the port into an FTZ, focusing on financial leasing, offshore finance and international shipping.

Yu Rumin, chairman of Tianjin Port Holdings Co Ltd, said during the "two sessions" (dual leadership meetings) of 2011 that "setting up a free trade zone based on the Dongjiang Free Trade Port Zone will be an effective way for Tianjin to further open up".

Shenzhen has sought to expand its FTZ over the years. It was the first Chinese city to establish a free trade zone.

The local authorities of the Yantian District of Shenzhen studied the feasibility of establishing a free trade zone as early as 2008. Li Xiuzhong, a member of Shenzhen People's Political Consultative Conference, wrote a proposal in 2010, calling for faster progress in establishing a free trade zone in Yantian.

Li wrote in the proposal that Yantian had met all the requirements to build up a zone by 2007. The container throughput of Yantian exceeded 10 million TEUs in 2007. By that time, Yantian had been the top among the 10 largest Chinese ports for more than four years.

Qu Jian, deputy director of a Shenzhen-based think tank, the China Development Institute, said that the city has been working very hard to get central government approval for a free trade zone.

Even though the FTZ in Shanghai has become the first of its kind in China, one more free trade zone in Shenzhen doe not mean duplication.

"For a large economy like China, it is of course better to have more free trade zones," he said.

"The area that a free trade zone covers is quite small, usually covering no more than 30 square kilometers. It is better to have one free trade zone in every economic region, such as the Yangtze River Delta region and the Pearl River Delta region, so that a complete network of free trade zones can be built up. Economic restructuring will be made possible under such a system," he said.