POWER ON: Staff from the State Grid Corp. examine ultra-high voltage transmission equipment on December 2, 2012 Colorful (LI FANGYU)

Free Trade Zone

Shanghai on January 27 officially announced plans to set up a pilot free trade zone (FTZ) that would meet international norms in its Pudong New Area, the city's financial and commercial hub, in 2013.

FTZ refers to an area within which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of customs authorities.

Shanghai has applied for a permit to build the FTZ on the basis of its existing comprehensive bonded zones.

If the application is approved, it would become the first FTZ on the Chinese mainland, said sources with the government of Pudong New Area.

Building the FTZ is one of the Shanghai Municipal Government's major tasks in 2013, said Yang Xiong, Acting Mayor of Shanghai, at the first session of the city's 14th Municipal People's Congress.

It will take about three years to build an FTZ that meets international standards, said Wan Zengwei, Director of the Pudong Academy of Reform and Development in Shanghai.

SMEs Rebound

An index measuring the growth of small and medium-sized enterprises (SMEs) in China rebounded in the fourth quarter of 2012, the first increase in eight quarters.

The SME development index rose 3.3 points from the third quarter to 90.8 in the last quarter, the China Association of Small and Medium Enterprises (CASME) said on January 28.

The index remained at a low level and was expected to continue to stabilize, but a strong recovery was hard to realize, said CASME.

The recovery trend is evident in China's economy, but companies still face a difficult business environment and are particularly troubled by overcapacity, the CASME said.

Higher costs, especially labor costs, have exerted great pressure on SMEs.

Auto Cooperation

China's homegrown carmaker Dongfeng Motor Corp. signed an agreement on January 26 with Sweden-based AB Volvo to jointly develop commercial vehicles.

Under the agreement, Dongfeng and Volvo will set up a jointly owned company to launch a new brand of commercial vehicle named Dongfeng.

The new agreement will see Volvo become the largest heavy truck manufacturer in the world.

Branded products of the new jointly owned company will cover medium- and heavy-duty trucks, passenger cars and special purpose vehicles, as well as auto parts including chassis, engines and gear boxes.

Dongfeng Motor, a major auto manufacturer in China, has cooperated with many world-leading carmakers like Renault Group and Nissan Motor.