Didn’t even know what a damp squib was until a few minutes ago, but now that I do, I think it beautifully describes the brand-spanking new Shanghai Free Trade Zone. Got the expression off this Economist article, entitled, The Shanghai Free-Trade Zone: A damp squib, in which it is said that the Shanghai Free Trade zone is sure to disappoint.
I am convinced it is destined to disappoint mostly because I have yet to figure out exactly who it is going to help and how. The opening of the Shanghai Free Trade Zone actually happened while I was in Shanghai and I scoured the Chinese press (including the Shanghai press) trying to figure out who it would benefit. In the end, all I got were some vague notions about what the Zone will allow but I never got the ah ha moment I would have liked.
And when I talked with knowledgeable others, I got the same story. I asked the China in-house lawyer at a large US tech company what he thought of the Zone and his response was that he had already received “six or seven emails from various department heads breathlessly asking him to look into it immediately,” but his response to each of them was along the following lines: ”Why are you asking? Is there anything about it in particular that you think might be good for your department?”
The China in-house lawyer at another large US company told me that the only companies he had been hearing that had been signing up for it were those in industries that were prohibited to foreign companies outside the free trade zone (he cited Microsoft’s X-Box division on that) or those that he saw going in strictly for political reasons — to look good in the Chinese government’s eyes. He told me that “at this point, our company has zero interest. Zero.”
So what are you hearing out there? Is Shanghai’s Free Trade Zone the real deal? Who is going in and why? Are you?