Shanghai is considered the pioneer in China's reform and opening-up. It has been at the forefront of a wave of pilot programs, aimed at advancing market and economic reforms in China.

In 1990, it established China's first bonded area with preferential tax policies, called Waigaoqiao bonded area.

In 2013, China's first Free Trade Zone (FTZ) was also established in Shanghai.

Five years later, Chinese President Xi Jinping announced at the first China International Import Expo that a new area will be added to the Shanghai FTZ.

And the special area, known as Lin'gang, located in the south of the city, has become the testing ground for many bold reforms.

In the Yangshan Special Comprehensive Bonded Zone, which is part of Lin'gang, customs deceleration and inspection of imports have been significantly simplified. Most imports only need one, instead of two inspection phases, to enter the Chinese market.

Shanghai is also one of the world's most important shipping hubs. In 2021, a policy was introduced to further open up the shipping sector and to enhance Shanghai port's ability as an international shipping hub.

The new policy allows foreign-flagged vessels to carry out cargo relays at the Yangshan port for containers coming from China's Dalian, Tianjin and Qingdao.

This is considered a major breakthrough, according to Tang Peng, deputy director of the Yangshan Special Comprehensive Bonded Zone.

"In May this year, the first international cargo relay business was carried out at the Yangshan Port," Tang said. "The most difficult part is the current laws and regulations that restrict transport businesses. If we want to start an international cargo relay business, we have to break through the provisions of such policies."

Lin'gang has also launched foreign exchange reforms to better align with international rules. This includes a cash-pooling service for multinational firms, which integrates local and foreign currency management to facilitate cross-border capital.

Shanghai International Port (Group) Co., Ltd. is one of the pilot companies. Yang Haifeng, the general manager of its Assets & Finance Department, said that the new cash-pooling service has several new reforms compared to the older versions.

"Firstly, the new cash-pooling service no longer mandates the opening of a special account for the free trade zone or a settlement pending payment account, which greatly simplifies regulatory procedures for our accounts," he said.

Yang further added that the overseas lending limit has been enlarged from 0.5 times to 0.8 times of the owner's equity. "According to our financial data, the overseas lending limit has increased by nearly 30 billion yuan ($4.18 billion)."

And the new policy also allows enterprises to buy foreign currencies within certain limits, and the foreign exchange funds from the purchase can be directly deposited into the main account of domestic funds.

Free Trade Zones have become important testing grounds for reforms that will be replicated in other parts of China.

The country now has 21 FTZs, covering most provinces. They will be given more space to explore new policies for high-quality growth and a more open market.