Update | Caveat on Shanghai experiment
Despite hopes for the free-trade area, experts warn it will not be able to create the same free and fair legal system that Hong Kong enjoys
Shanghai is keen to copy Hong Kong’s economic model for its newly launched free-trade zone. But finding an equivalent for the centuries-old common-law system the former colony inherited from Britain may be easier said than done.
Law experts warn that potential legal risks and uncertainty may hinder the mainland’s financial capital’s attempts to lobby foreign businesses now active in Hong Kong to move north.
The mainland’s first free-trade zone has already attracted opposition from several regulators of ministerial level concerned about losing their powers if the zone is given too much freedom.
Some analysts believe this has cast a shadow over the outlook for the zone, which was officially launched at the end of September.
Unlike Hong Kong, the Shanghai free-trade zone does not have its own controlled border.
Hong Kong also enjoys an independent judiciary, creating a safe legal environment for foreign investors. The city’s partial autonomy is safeguarded by late paramount leader Deng Xiaoping’s “one country, two systems” principle, in force since the city’s historic handover in 1997.
