A free-trade zone in Shanghai that China's government has billed as a major step for financial reforms and economic experimentation has formally started.

A first batch of 25 Chinese and foreign companies were granted licences to register in the zone.

The China (Shanghai) pilot free-trade zone is a nearly 11-sq mile district that covers four existing special trade zones in Pudong district, including one at the airport.

The zone is expected to serve as a testing ground for such financial experiments before they are rolled out elsewhere in China. No timeline was given for any changes, but rules in the zone will be introduced over a three-year period.

The Shanghai zone has been touted as the most important attempt at economic reform since the establishment of the country's first special economic zone in 1980 in Shenzhen, near Hong Kong.

The government has pledged to open up 18 service industry sectors to foreign investment, including shipping, law and engineering. Foreign-owned performing arts agencies and medical institutions will be allowed.