The reforms in the China (Shanghai) Pilot Free Trade Zone (FTZ) must be replicable and applicable to other regions, Han Zheng, secretary of the Shanghai Municipal Committee of the Communist Party of China (CPC), told the media, the 21st Century Business ­Herald newspaper reported Thursday.

Han stressed the reform measures conducted in the FTZ must be able to be ­replicated and used in other regions ­because the purpose of establishing the FTZ is not for regional experiment but for long-term development, ­according to the report.

Therefore, the key issue of the FTZ is system innovation instead of preferential policies, Han said, noting system innovation is a deep reform, which is more difficult than releasing preferential policies to attract investment.

The operation of the Shanghai FTZ in the first month since it was inaugurated was satisfactory, Han said.

He noted the FTZ has achieved its primary goals as expected, the report said.

Han said the main reform measures include releasing the first negative list for investment, replacing the need for companies to seek approval with filing a notification ­instead, and opening six fields of the service industry.

Regarding the financial ­reform in the FTZ which has attracted much concern, Han said in the report that it included four major aspects: yuan capital account convertibility, interest rate marketization, cross-border trade settlement and the innovation of the foreign exchange management system.

Han said the concrete ­reform measures for the financial sector are in discussion and will be released at a proper time.

"We have no tolerance for systematic and regional risks." Han said, noting the premise of financial reform is that the risks must be under control.

The released negative list is for this year, said Ai Baojun, head of the FTZ administrative committee.

Ai also noted that the committee has started research on the new version of the list for next year.

The negative list identifies industries with bans or restrictions on foreign investment.

The country's top leaders did not ­attend the opening ceremony of the Shanghai FTZ because simplicity is preferred, as required by the "eight-point" regulation, which was issued by the new CPC leadership for ­bureaucratic reform late last year, Han was quoted by the report as saying.