Read more: Shanghai pilot FTZ to be inaugurated on September 29


With the official unveiling of the Shanghai Pilot Free Trade Zone (FTZ) today, an area of 28.78 square kilometers in Pudong New Area will test the courage and wisdom of Chinese society to further press ahead with the reform and opening-up policy adopted 35 years ago.

It is noted that the FTZ is unveiled just more than one month before the Third Plenary Session of the 18th Central Committee of the Communist Party of China. Although Chinese authorities have never linked the FTZ with the convening of the session, its establishment signals a new round of forceful reforms in China and the session will focus on the comprehensive implementation of reform in this rising power.

The past 35 years have shaped China in a profound way, turning it from a poor and backward nation into the second largest economy in the world. That process, however, has been accompanied by an increasing number of thorny problems. China is encountering new bottlenecks in its economic and social sectors, which call for effective approaches with minimum cost.

As the first officially established free trade zone in China, the Shanghai FTZ is of the same significance as Shenzhen Special Economic Zone set up at the beginning of the reform. Therefore, it is supposed to serve as a test field for China's reform and opening-up in the future. Nevertheless, the pilot zone will  become a white elephant if we do not take it seriously.

We should be sober-minded that the Chinese government is now holding a different view toward its reform and opening-up policy in a changing environment because the general public is expressing a strong desire to get involved.

It is the prevalent view that a major obstacle for further reform in Chinese society comes from "vested interest groups" but the perception is perhaps exaggerated to a certain degree. Striking a balance between different social groups constitutes a basic function of reform and many people may have forgotten or never learned about the hardship in this connection in previous years.

How to utilize a wide spectrum of regulation power in an appropriate way, while probing into a free market comes as a real challenge for China's further reform. It has become common sense that the government is supposed to delegate power in the economic area as well as create a fair and just environment to help small and medium-sized enterprises. Opening financial sectors to foreign corporations has generated obvious benefits, but we need superior capability to ensure it does not breach the economic and social order.

The heavy reliance of China's economy on government regulation determines that the Shanghai FTZ is hard to duplicate the success of other free trade areas in the world.

With "Chinese characteristics," the pilot zone is expected to become a milestone in China's economic growth and a touchstone of its future reform. We are supposed to view the Pudong hub as a new "Shenzhen" and facilitate its development by fostering an accommodating environment to stimulate economic restructuring and upgrading in China.