Lin-gang Special Area

The area, administered like a special economic zone, will establish an institutional system with a focus on investment and trade liberalization and set up an open industrial system with global competitiveness, according to the plan.

It will strive to become a cluster for international businesses, cross-border financial services, frontier technology research and development (R&D), and cross-border services trade. It will also speed up the industrial upgrading of existing companies.

The Yangshan comprehensive bonded area will be set up there, and the area will also pilot free capital inflows and outflows and free capital conversion.

Income tax shall be levied at a reduced rate of 15 percent within five years from its establishment for qualified enterprises engaged in manufacturing and R&D in key fields including integrated circuits, artificial intelligence, biomedicine and civil aviation, the plan says.

Shanghai will also set up a fund of 100 billion yuan ($14.2 billion) in five years to support the development of the new area, Chen said.

The plan says the new area will be granted greater administration power for self-development, self-reform and self-innovation, and will regularly promote its experience to spearhead a new round of reform and opening-up of the Yangtze River Delta region.

Apart from serving the Belt and Road Initiative and the Yangtze River Economic Belt, the new area is also designed to promote the coordinated development, reform and opening-up of the Yangtze River Delta, Wang said.

China's economy faces complicated external situations, and the only way to improve industrial competitiveness and move up the value chain is to boost scientific and technological innovation capacity, said Yin Chen, secretary-general of the Shanghai Free Trade Zone Comprehensive Research Institute with Fudan University.

With more openness, the new area can boost Shanghai's ability to allocate high-end resources and better represent the country in global cooperation and competition, Yin said.