The city will also pump in investments of about 1 billion yuan ($160.1 million) to build a commercial airport in Nansha.

A railway linking Nansha with the Pearl River Delta cities of Zhongshan, Foshan and Jiangmen, a tunnel between Hong Kong and Zhongshan and a high-speed subway that connects with the downtown area of Guangzhou will be built in the free trade zone, according to Chen.

"We are determined to build the Nansha free trade zone into a fast and efficient shipping and logistics center, which will help expand the local economy," Chen said.

According to a government work report, the Nansha free trade zone will copy the business model of Shanghai, including a "negative list" management on foreign investment. It will also conduct a series of new pilot policies including tax rebates based on port departures, cross-border renminbi loans and offshore data services.

"We will build a business framework in line with international trade and investment practices," Chen said.

Liu Jianghua, former deputy director of the Guangzhou Academy of Social Sciences, said Guangzhou's move to build a shipping and logistics center in Nansha will help attract increasing flows of passengers and business opportunities.

"Without fast and efficient transport services, the free trade zone cannot become an international finance and trade center," Liu said.