Shanghai's pilot free trade zone on Tuesday added a new area, occupying 119.5 square kilometers of Lingang in the southeastern part of the city. 

The Lingang New Area occupies a pivotal geographic position, which has the advantage of being easily accessed by air, sea and rail through its vicinity to Shanghai Pudong International Airport, the Yangshan Port and a planned high-speed railway route. Yangshan Port is the world's top container port. 

The area is 75 kilometers away from Shanghai's urban areas.

The area's inauguration was on Tuesday while an approval by the State Council, China's cabinet, was made public earlier in August. According to the State Council, Lingang is expected to become a globally competitive, influential free trade area with special function by 2035.

The Shanghai Municipality hopes to attract advanced industry, including integrated circuits, biopharmaceuticals, artificial intelligence, aeronautics and aerospace, to form industrial clusters in the area. Nearby transportation hubs are expected to support the trade and industrial development set up in the new area.

This is the second time that the Shanghai Free Trade Zone has expanded its domain, and the latest expansion has almost doubled its size. 

US electric car maker Tesla's first overseas plant is also located in the Lingang New Area. The new-energy car plant wholly owned by Tesla is set to begin production within the year.

Analysts have said that the development of the New Area could include an experiment in cross-border capital management to better compete for global trade resources and the development of a free trade port, although the plan used the terminology, "internationally acclaimed, most competitive free trade industrial park."

Globally, "free trade ports" refer to Singapore, Dubai and China's Hong Kong. 

Leading manufacturing companies such as SAIC Motor, Shanghai Electric Group Co, Siemens and GE have already established themselves in the area.