The central government has agreed in principle to approve 12 new free trade zones (FTZs), three months after giving the special status to a zone in Shanghai. The 12 would include zones in Guangdong, which has been lobbying the central government by highlighting its economic ties with Hong Kong, and Tianjin. Those two FTZs were likely to be launched in about a year. Other candidates included Zhejiang’s Zhoushan, which consists of several islands with a focus on the shipping business; Qingdao; Chengdu; Wuhan; and Hangzhou. A Shanghai-based researcher said the approval of more FTZs might not necessarily erode Shanghai’s edge, but would increase the bargaining power of the new zones. “A collective lobbying effort from various provinces and municipalities would probably prompt the central government to make determinations on financial liberalizations, such as convertibility of yuan under the capital account,” said the Shanghai Academy of Social Sciences researcher, who asked not to be identified. Analysts said more free-trade zones would increase competition for talent and capital and result in an infrastructure building spree in the near term. In the longer term, they said that punishing competition and economic development might ultimately result in three prominent zones – one each in eastern, southern and northern China. Yuan internationalization and financial services would be key elements in all zones.