China's new leadership made a crucial step in further reform and opening up, with the State Council approving the establishment of a pilot free trade zone in Shanghai.

Covering less than 30 square km and built on four existing bonded areas, the zone will be a breakthrough in the deepening of China's opening-up strategy, which began more than 30 years ago.

Globalization has passed the phase of traditional commodity trade and is now heavily bent toward service trade and cross-border investment. To adapt to the new trend, the Shanghai free trade zone is designed to expand the opening of the service sector in China, especially in finance. It is considered to be another significant move after China's entry to the World Trade Organization 12 years ago when the country opened its manufacturing sector and part of the service sector to foreign investment.

Meanwhile, the government will simplify procedures for foreign investors to start businesses and focus on providing highly efficient services. After the Standing Committee of the National People's Congress, China's top legislature, approves the suspension of some laws governing foreign investment in the zone, plenty of red tape will be cut for investors who wish to set up a company there.

The Shanghai free trade zone is also a testing ground, shouldering the task of exploring a new path of reform and opening up for China. Experiences gained from the zone are expected to spread to other coastal cities, and then the whole country. The zone is sure to help the country foster its global competitiveness and contribute to building an upgraded version of China's economy.

It could also pave the way for Shanghai to become a global center of finance. Not too long ago, the city was the region's undisputed financial capital, something hardly forgotten among the country's leaders. With the Shanghai World Financial Center standing tall and proud on the cover of this issue, the question remains: Is this a new beginning for Shanghai?