The external background of the establishment of Shanghai Pilot Free Trade Zone is economic globalization and global trade competition.The internal background focuses on the following:the demand for further opening-up and economic development;RM B internationalization;the conditions such as concepts,policies,institutions and materials are possessed.It enhances China’s power in world economics:the massive concentration of enterprises and investment in Shanghai show their confidence and identity to Chinese government and market;the institutional innovation of finance and other fields reflects China’s determination and self-confidence of developing economy and participating in the process of globalization;economic growth increases China’s structure power and global interdependence enhances China’s relation power. The external background of the establishment of Shanghai Pilot Free Trade Zone is economic globalization and global trade competition.The internal background focuses on the following: the demand for further opening-up and economic development; RM B internationalization; the conditions such as concepts, policies , institutions and materials are possessed. It enhances China’s power in world economics: the massive concentration of enterprises and investment in Shanghai show their confidence and identity to Chinese government and market; the institutional innovation of finance and other fields reflects China’s determination and self-confidence. of developing economy and participating in the process of globalization; economic growth increases China’s structure power and global interdependence enhances China’s relation power.