A disappointing first year for Shanghai's much-hyped free-trade zone, seen as a pet project of Premier Li Keqiang and billed as a reform laboratory, raises questions about China's commitment to opening up its markets as it wrestles with a slowing economy.
The 29 square kilometer zone on the outskirts of China's commercial capital - hailed as Beijing's boldest reform in decades - was meant to test changes such as currency liberalization, market-determined interest rates and free trade.
But progress has been slow and policies vague as the political focus has turned from reform to shoring up growth, leaving foreign companies unsure of investing in the free-trade zone (FTZ).
"There has been some progress in the Shanghai free trade zone, but the progress is much slower than the market had expected, especially in the financial market sector," said Zhu Haibin, chief China economist at JP Morgan in Hong Kong.
In particular, China needs to transform government functions and release a list of which sectors are off-limits to foreign investors rather than assessing investments on a case-by-case basis, Zhu said.
"If the progress is too slow on this front, it may risk turning out to be a failure."
A broad reform agenda to remake China was unveiled to much fanfare in November 2013, but an unexpectedly sharp slowdown in the economy at the beginning of the year quickly saw attention refocused on ensuring the government's 7.5 percent growth target would be met.
"We've seen some policies in the free-trade zone, but they are not relevant to my company and we haven't seen any benefits yet," said a corporate treasurer at a major foreign manufacturing technology company who asked for anonymity as she was not authorized to speak on the issue.
On Wednesday, Premier Li said Beijing would review the development of the Shanghai FTZ. The FTZ was widely seen as Li's pet project, but he did not attend the opening ceremony last year. The heads of the central bank and the foreign exchange regulator were also absent.
The free trade zone, part of wider financial reforms such as transitioning to a fully convertible yuan currency, is seen as an important step towards developing a more open economy regulated by policies similar to those in developed markets.