THE deputy director of the Shanghai Free-trade Zone, Dai Haibo, the de facto head of the free-trade zone, is suspected of "disciplinary violations" and expected to step down.

Mr Dai, also in charge of a taskforce on Shanghai port affairs, made an appearance last week chairing a government conference on ports, but his title as the free-trade zone chief was not used, the South China Morning Post reported.

The timing of the Dai probe coincides with a Communist Party investigative team's arrival in Shanghai in late July. Mr Dai, a technocrat who attracts foreign funds to economic zones, had been touted as ideal for the top FTZ job.

"He knows what needs to be done to welcome foreign funds and he has a good command of economics and industries," said a Pudong official. "His departure or sacking could slow down progress in developing the free-trade zone."

This is regarded as a blow to the already struggling economic project ahead of its first anniversary.

"A final verdict has yet to be given, but it's almost certain that he will be at least suspended from the job," said one official. "It's not clear whether he will face further punishment."

Mr Dai, 52, might be allowed to remain in his other main role as deputy secretary general of the municipal government, sources said. The administrative committee of the trade zone could not be reached for comment.

The sources said the concerns