There is real concern that liberalization of existing controls may increase exposure to imported risks, and effective mechanisms are needed to hold them at bay.

The People's Bank of China, China's central bank, has asked banks to set up separate accounting units to handle cross-border capital transactions in the zone. Yuan transfers from these accounts to domestic ones is limited to current account transactions, loan repayments and non-financial investment.

PBOC clarifies rules on FTZ yuan business

Shanghai zone in search of identity

Louise Zhang of Deutsche Bank sees these conditions as satisfying legitimate capital needs while containing speculation.

"It all comes down to one simple thing: no business activity in the zone should serve speculative ends," she said. Though there are still limits in many cross-border transactions, there is enough wriggle room for day-to-day operations. "We understand these limits are there mostly to weed out arbitrage," Zhang added.

Acknowledging the achievements of the Shanghai FTZ, Zhu Xiaoming, executive president of China Europe International Business School (CEIBS), said both financial and non-financial institutions surveyed by the school are still confused. Although facilitating cross-border capital flow has aroused interest in innovation, companies in the zone are still concerned about crossing regulatory redlines.

He urged regulators to address what he called the "information asymmetry" between policy makers and market participants in the zone. One suggestion he offered is to introduce a third-party institution to run orientation programs for companies.

Jian Danian, deputy director of the Shanghai FTZ's administrative committee, said during a forum held by CEIBS last month that the FTZ is not just another development zone with preferential treatment.

"(The FTZ) is where we test bold reform initiatives. If it works at the FTZ, we consider expanding it nationwide. If something doesn't work there, then we drop it. This is what happens in the FTZ," Jian said.