The new area will also become a business-friendly and livable modern town.

As a relatively new town, it will create the freest open economy in the country, Zhu said.

"The development of new types of international trade, cross-border financial services, research and development (R&D) of cutting-edge science and technology, and high-end international shipping are among Lingang's top priorities," he said.

Under the development plan the area will be built into an "internationally acclaimed, competitive free trade industrial park".

"Moreover, Lin-gang will focus on key sectors, such as artificial intelligence (AI), integrated circuits (IC), biomedicine and aerospace and build a number of world-class industrial clusters that represent China's participation in international competition," Zhu said.

Analysts said the focus will be on weak links in China's manufacturing industrial chain in the fields of chips, drugs, smart technology, aircraft engines, new energy vehicles and data centers. Chips and AI are of special importance, they said.

Media reports said companies registered in the area include NASDAQ-listed ACM Research Inc and solar energy giant Hanergy.

Leading manufacturing companies such as SAIC Motor, Shanghai Electric Group, Siemens and GE have already established a presence in the area.

US electric carmaker Tesla's first overseas plant — worth $7 billion — is also located in Lin-gang and is set to begin production in 2019.

Earlier this year, Tesla founder Elon Musk was in Lin-gang to break ground for the company's first overseas factory — the largest foreign-funded manufacturing project yet built in Shanghai.