Several preferential policies have been implemented to attract foreign investment in various industries to the FTZ. Because the Zone is not technically considered PRC territory for tax purposes, commodities entering the zone are not subject to duty and customs clearance as would otherwise be the case.
For centuries a major administrative, shipping, and trading town, Shanghai grew in importance in the 19th century due to European recognition of its favorable port location and economic potential. The city was one of five opened to foreign trade following the British victory over China in the First Opium War while the subsequent 1842 Treaty of Nanking and 1844 Treaty of Whampoa allowed the establishment of the Shanghai International Settlement and the French Concession. The city then flourished as a center of commerce between east and west, and became the undisputed financial hub of the Asia Pacific in the 1930s. However, with the Communist Party takeover of the mainland in 1949, trade was reoriented to focus on socialist countries, and the city’s global influence declined. In the 1990s, the economic reforms introduced by Deng Xiaoping resulted in an intense re-development of the city, aiding the return of finance and foreign investment to the city.
Shanghai is a popular tourist destination renowned for its historical landmarks such as The Bund, City God Temple and Yu Garden as well as the extensive Lujiazui skyline and major museums including the Shanghai Museum and the China Art Museum. It has been described as the “showpiece” of the booming economy of mainland China.