Decades-long reforms pave way for Shanghai FTZ

"China's reforms in the past 35 years, including the establishment of special economic zones in Shenzhen and Pudong, have provided a large quantity of experiences for the FTZ," according to Tan Yalin, president of the China Forex Investment Research Institute.

They also provided references to China for further refining reforms and risk control in the FTZ, Tan said.

For Sun Lijian, a Fudan University professor, the launch of the FTZ is a response to economic problems at home, such as excessive production capacities and a growth model that relies heavily on government-led investment.

The FTZ is also a decision made as developed economies are accelerating efforts in reshaping global trade rules through trade agreement talks such as the Transatlantic Trade and Investment Partnership and Trans-Pacific Partnership that excludes China, Sun said.

A blueprint released on Friday by the State Council, the cabinet, revealed a detailed list of tasks such as widening investment options via opening up the service sector, pushing forward trade upgrading, and deepening financial reforms including testing a convertible yuan and market-setting interest rate in the zone.

Experts pointed out that development in the past 30-odd years has seen China catapulted from 10th position in the world's economic rankings in 1978 to second position today. However, they warned that the old growth model driven by heavy reliance on resource consumption and extensive development is hard to sustain and China urgently needs a "baptism" to induce new vigor for future growth.

Zhang Youwen said the essence of the FTZ is institutional innovation and reform in finance, fiscal matters, trade and governance, the success of which will serve as an exemplary case for the whole nation, as mandated in the cabinet's blueprint for the zone.