(Corrects date when Shanghai free-trade zone was approved in third paragraph.)
Aug. 23 (Bloomberg) -- Shanghai International Port (Group) Co. led a rally for companies based in the nation’s commercial hub on speculation a free-trade zone will spur trade and boost service industries including logistics and tourism.
Shanghai Port, the operator of the city’s harbor, jumped 10 percent to 2.81 yuan at the close. Shanghai Jinjiang International Hotels Development Co., the nation’s largest hotel operator, surged 4.5 percent to 12.68 yuan. Shanghai Haibo Co., which provides taxi services, climbed 7.5 percent to 5.73 yuan.
The State Council approved a free-trade zone for Shanghai July 3, according a statement posted on the website of the Ministry of Commerce yesterday. The free-trade zone will cover four bonded areas ranging from Waigaoqiao to the Pudong airport with a total area of 28.8 square kilometers, it said.
“Construction of the free-trade zone will lure foreign companies and boost the number of overseas travelers entering the city,” Jiang Ya and Zhao Xueqin, analysts at Citic Securities Co., wrote in a report today. They recommended retail and tourism companies including China International Travel Service Corp. and Shanghai Friendship Group Co.
The State Council has submitted to the legislature a proposal to alter some laws and administrative approvals regarding foreign investment, according to the commerce ministry statement.
The move “adapts to the new global trade trend and is a significant measure to adopt the more active opening-up strategy,” the statement said. “The main task is to explore new ways and models for China’s opening-up, accelerate the change of the government’s role, promote the transformation of economic growth and optimize the structure of the economy.”
The government may start a trial of yuan convertibility under the capital account and lower corporate tax rates in the Shanghai free-trade zone, Citic Securities said in the report.
Shanghai has introduced 42 measures to develop the financial industry to support economic growth, Eastday.com reported yesterday. The city is trying to start innovative trials such as allowing private capital to set up banks, finance leasing and consumer finance companies, according to the report.
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