Companies linked to Shanghai’s free-trade zone rallied after the government said it would allow foreign investment in the shipping industry and overseas manufacturers to produce game consoles.
Shanghai International Port (Group) Co. jumped 7.9 percent at the 3 p.m. close, after surging by the 10 percent daily limit, while Shanghai Waigaoqiao Free Trade Zone Development Co. climbed 2.5 percent. BesTV New Media Co., which formed a game console venture with Microsoft Corp. (MSFT) in the zone, surged 8.4 percent. The Shanghai Composite Index added 0.1 percent.
The State Council, or cabinet, announced yesterday that it had temporarily suspended laws to allow international shipping joint ventures and foreign-owned international shipping management firms in the zone. It also temporarily halted a 13-year ban on sales of game consoles by foreign-invested companies and delegated the task of drafting new rules to departments overseeing cultural matters.
“The government is steadily pushing forward the implementation of the detailed rules for the Shanghai free-trade zone,” said Wu Kan, a money manager at Dragon Life, which oversees about $3.3 billion. “The easing of restrictions on the gaming and telecommunication industries is all good by introducing foreign investment.”
China inaugurated the zone in September as a testing ground for free-market policies that Premier Li Keqiang signaled may be implemented more broadly in the world’s second-largest economy. Plans to open the shipping, gaming and financial services industries to foreign investment were first announced in a policy statement that same month.
Consoles such as Microsoft’s Xbox 360, Nintendo Co.’s Wii U and Sony Corp. (6758)’s PlayStation were banned by China in June 2000. Microsoft formed a $79 million gaming venture with BesTV, a subsidiary of the Shanghai Media Group, last September.
The government yesterday also scrapped some approval requirements related to the Shanghai trade area and changed to a registration-based system for foreign investment not restricted by the so-called negative list.
“I would not say this is earth-shattering, but it does give a little more contour and specificity” to free-trade zone measures, Philip Cheng, a Shanghai-based partner at the law firm Hogan Lovells International LLP, said in an e-mailed message.
To contact the editor responsible for this story: Allen Wan at firstname.lastname@example.org