The China (Shanghai) Pilot Free Trade Zone, the first of its kind in the country, is turning into a true test case for China's further opening-up, and is attracting thousands of companies from both home and abroad.

The negative list system, which was introduced when the Shanghai FTZ was unveiled five years ago, has been a major breakthrough for the management of foreign investment.

While there were 190 measures restricting or prohibiting foreign investment in the initial version, the number has been downsized to 45 in the latest version jointly released by the National Development and Reform Commission and the Ministry of Commerce in July.

"The negative list is an important fundamental policy innovation," said Zhu Min, deputy director of the Shanghai Development and Reform Commission.

"Shanghai has a longer history in terms of the development of a more open economy. The demand seen in this city is sometimes ahead of other parts of China. Therefore, the policies implemented in the Shanghai FTZ should be replicated and promoted in other cities in the country," he said.

Regarding the achievements that the zone has made over the past few years, President Xi Jinping said during his keynote speech at the opening ceremony of the recent China International Import Expo that the Shanghai FTZ will be further expanded.

Once implemented, it will be the second time for the zone to include a new section, with the first expansion undertaken in late 2014.

Zhao Xiaolei, director of the Collaborative Innovation Center of the China Pilot Free Trade Zone at Shanghai University of Finance and Economics, said the expansion will further promote free trade and indicates a more convenient investment environment in the municipality.

The large number of overseas companies settling down in the Shanghai FTZ demonstrates the allure of the zone. By the end of June, 8,696 foreign-invested companies had been registered in the zone, with total contractual foreign capital topping $110 billion.

ACC Lab, specializing in the testing of foods and dietary supplements, was registered in the Shanghai FTZ in 2015. The company obtained a business license within two weeks, which helped it achieve rapid growth in the domestic market.

"We could hardly imagine how we would be able to make this business happen if not for the negative list," said Si Rong, executive president of ACC.

In line with central government guidelines, Shanghai has focused on opening-up policies in modern services and advanced manufacturing industries. By June, more than 2,600 detailed opening-up policies had been implemented, covering financial leasing, commercial operations and construction design.

Jiang Tai Reinsurance Brokers was founded in the Shanghai FTZ in December 2015.

In addition to being China's first reinsurance company, it was also the first financial institution to obtain a business license thanks to government efforts to cut red tape.

Shen Kaitao, chairman and CEO of Jiang Tai, said that thanks to accelerated policy innovations in the zone, the company can bring international quality reinsurance products and services to the Chinese market.

The free trade account mechanism within the Shanghai FTZ has been an important tool in facilitating the development of the real economy. More than 38,000 Chinese and overseas companies have registered more than 72,000 FTAs in Shanghai. Total cross-border settlements stand at 25.9 trillion yuan ($3.7 trillion), reaching 161 countries and regions.

According to Shi Liya, deputy inspector at the Shanghai head office of the People's Bank of China, one important function of the FTA is to help companies seek cross-border financing so that they can best use the resources both in China and abroad. The total amount of such financing under the FTAs has reached 1.36 trillion yuan.

"The ultimate goal of the innovative financial policies introduced in the Shanghai FTZ is to help companies seek substantial growth and get real benefits," she said.