China has given the go-ahead for three more free-trade zones, state media reported, despite the country's first project in Shanghai proving disappointing 18 months after its establishment.

A meeting of the Communist Party's politburo hosted by President Xi Jinping on Tuesday approved zones in the southern province of Guangdong, eastern province of Fujian and northern city of Tianjin, the official Xinhua news agency reported.

China's commerce ministry had already announced in December that three FTZs would be set up in those locations.

State media have said the Guangdong FTZ aims to speed economic integration with neighbouring Hong Kong, a special administrative region of China.

The Fujian zone is focussed on Taiwan, which China considers part of its sovereign territory. The Tianjin FTZ is part of a push to better integrate the city with nearby Beijing and Hebei province.

Media reports originally gave March 1 as the official opening date for all three, but that deadline passed. Hong Kong's South China Morning Post newspaper later reported that the Guangdong FTZ would launch on March 18, but no opening was announced.

A statement from the politburo said the establishment of FTZs aimed to "deepen reform" and "expand opening up to explore new approaches", adding the Shanghai zone had shown "positive progress" since its founding, according to Xinhua.

The Chinese commercial hub set up its FTZ in September 2013, promising a range of financial reforms, including full convertibility of the yuan currency and free interest rates, but they remain unfulfilled.

The American Chamber of Commerce in Shanghai said this month that 73 percent of the 377 companies responding to its annual business climate survey said the FTZ offers "no tangible benefits" for them.

A former top official of the Shanghai FTZ, executive deputy director Dai Haibo, is now under investigation for violating the law, authorities said earlier this month, but gave no details.

Telefonica sells O2 to Hutchison Whampoa
Madrid (AFP) March 25, 2015 - Spain's Telefonica said Tuesday it would sell British telecom giant O2 to Hong Kong group Hutchison Whampoa for 10.25 billion pounds in a deal that could create Britain's biggest mobile phone firm.

"A definitive agreement has been reached after the finalisation of the process of due diligence on O2 UK," the Spanish firm said in a statement, adding the deal was worth the equivalent of 14 billion euros ($15.2 billion).

Subject to regulatory approval, Hutchison Whampoa will make an initial payment of 9.250 billion pounds and a further 1.0 billion pounds later once O2 reaches an agreed cash flow level, it said.

It hopes to wrap up the deal by June 30, 2016 -- a deadline that may be pushed back to September 30, 2016 in certain circumstances.

It is the latest purchase in a spending spree by Hutchison's owner, Hong Kong investment tycoon Li Ka-shing, one of Asia's richest men.

Li, 86, who is worth $30.6 billion according to Bloomberg's Billionaires Index, announced a sweeping re-arrangement of his business empire in January.

Hutchison already owns Britain's Three mobile phone network -- if he merged O2 with that company, he would reduce to three the number of players in Britain's fast-consolidating wireless telecoms sector.

A statement from Hutchison said the agreement to buy O2 "will create the number one mobile operator in the UK".

Hutchison's group managing director Canning Fok described the deal as a "major milestone".

"The combination of Three UK and O2 UK will create a business with unmatched scale and strength that will allow us to better compete against other operators in the marketplace," Fok said.

But some analysts have warned that a merger could lead to price hikes, owing to less competition.

Hutchison could "drive a lot of synergies" with the takeover, James Britton, a London-based analyst at Nomura Holdings Inc, was quoted as saying by Bloomberg News.

"Whether that really equips them to be fully competitive in a converged UK market remains to be seen."

- Telecom sector shake-up -

It was the latest in a series of shake-ups in Britain's telecom sector.

British telecoms and TV firm BT had said in November that it was in preliminary talks to buy back O2 -- its former domestic mobile phone division -- from Telefonica.

Instead BT ended up buying another British mobile phone operator, EE, for 12.5 billion pounds.

British telecom giant Vodafone took over Spanish cable firm Ono on July 24 for 7.2 billion euros.

Telefonica, with operations across Europe and Latin America, is meanwhile looking to turn around its fortunes.

It reported a 35-percent plunge in net profits to 3.0 billion euros in 2014. Its debt stood at 45 billion euros at the end of 2014.

It said last month it plans to step up its value-added activities such as fibre optic cable, pay TV and smartphones, and to focus on its main markets in Spain, Germany and Brazil.

The Spanish group wants to pull out of the British market where it has been present since 2005, when it bought O2 for 26 billion euros.

Telefonica has already sold its operations in the Czech Republic and Ireland.

Hutchison's revamp is expected to pave the way for Li's retirement and follows speculation of a handover to his son Victor.

Li's shift away from a slowing Chinese economy to bargain hunt in Europe is seen as a further quest for stability for his vast empire.

Fok said the deal to buy O2 "reflects our continued confidence in the UK economy".

Hong Kong-based independent financial analyst Francis Lun said investors would be happy with the move.

"They (Hutchison) will have much better economies of scale -- they will be able to improve their profitability for the mobile and telephone sector."