The State Council approved Shanghai's free trade zone project on Wednesday, which will catapult the city to the forefront of global logistics centers.

The project, occupying 28 square kilometers, will center around the Yangshan Deep Water Port and will take more than 10 years to build.[Company Registration in USA]

When completed, the free trade zone will provide world-class transport and communications facilities and a tax-free environment for domestic and foreign enterprises as a major hub of their supply chains in Asia.

The project was approved at a State Council meeting presided over by Premier Li Keqiang.

Under the central government's guidance, the Shanghai municipal government will explore innovative methods of trade and investment management, facilitate trade and investment, and further open up the service industry.

The central government also hopes the project can help advance reform and improve the standard of opening-up.

The project, mapped out at the start of this year, is the first of its kind in China and is also one of Shanghai's major tasks for 2013.

"The details of the free trade zone haven't been released yet. We will follow up with the guidelines from the central and municipal governments to build up a free trading platform," said Jian Danian, deputy director of the Shanghai Free Trade Zones Administration.[Company Formation | Offshore Company | Company Incorporation]

Jian said the focus is on offering more convenience and efficiency for local trading companies with improved policies on foreign investment, international trading settlement and cross-border transactions.

Han Jun, the Party secretary of [Company Incorporation USA] COSCO Logistics (Shanghai) Heavy Haulage Co, said, "Shanghai is totally qualified as a free trade zone after attracting so many global companies to set up their regional and China head offices in the city. But the policies and operating system still need to be improved."