Shanghai’s Free Trade Zone is APROC again

By David Kan Ting ,Special to the China Post

By the way, does any one in Taiwan still remember the APROC — Asia Pacific Regional Operations Center? For those who don’t, it was an ambitious plan to transform and upgrade Taiwan’s economy for long-term competitiveness and sustainability. The scheme was described in 1995 by Lien Chan, Taiwan’s then premier, as a “cross-century initiative” that would usher the island — one of Asia’s “four tigers” — into the new millennium with renewed strength and vigor. Unfortunately, the project fizzled out when President Lee Teng-hui slammed on the brakes and announced a “go slow, be patient” policy that doomed Taiwan’s economy to decades of stagnation.

Two decades later, Lien Chan’s dream is being revived, not in Taiwan, but on the other side of the Taiwan Strait in Shanghai, where the China (Shanghai) Pilot Free Trade Zone (上海自由貿易試驗區) is to open on Oct. 1. The glittering metropolis is throwing its doors open, once more and much wider, to the world’s investors and adventurers. It is perhaps the most significant and boldest step taken by China’s economic planners, especially Prime Minister Li Keqiang, since Deng Xiaoping liberated China’s economy from central control to free market forces 35 years ago. The project could herald China’s second reform and opening up since 1978 when Deng’s historic experiment was adopted by the Chinese Communist Party at its third plenum of the 11th Central Committee (十一屆三中全會).

The zone, occupying 29 square kilometers in Shanghai’s Pudong New Area, comprises four centers: shipping, business, financial services and logistics. It looks like an APROC writ large. Back in the 1990s, when Taiwan’s burgeoning economy was the envy of the world, the state’s visionary leaders and savvy technocrats like Lien Chan and Vincent Siew, then the Cabinet’s top economic planner, saw the need to maintain the island’s economic growth momentum.

They conceived of the APROC plan which was designed to attract foreign investment and liberalize its economy, making Taiwan a regional economic hub and home to multinational business groups. Had it not been for the plan’s sudden death, Taiwan would have become the top dog of East Asia’s emerging economies, instead of being the one trailing and struggling behind. In retrospect, 1995 was a landmark moment for Taiwan’s economic development: the year when its golden era ended for good.

At the same time, mainland China’s economy was taking off. Pudong, a rural backwater on the east bank of the Huangpu River, began its rapid ascent in the early 1990s. In less than 20 years, Pudong has become a shining star in the Orient, with skyscrapers rising like mushrooms, drawing foreign investment like magnets. It has already become a regional hub for transport, finance, and business. It was the site of World Expo 2010, the largest in history.