The reform of China (Shanghai) free trade zone needs to be secured by a relevant legal framework. However, the free trade zone will initially only be a trial for two to three years, as per the “Overall Plan" which is the legal base for the construction of Shanghai Free Trade Zone. Due to the strict and time-consuming of legislative procedures in China, the establishment of relevant legal framework for the free trade zone would be lagging. Under this circumstance, if the court system waited for all legislations being established, the development of free trade zone would lack any legal protection. As a result, the process of the free trade zone reform might well be blocked. Therefore, the current legal system needs to be adaptive to the new environment; to strive a balance between the resistivity and effectiveness and between the market autonomy and nation control, as well as business freedom and transaction security. In doing so would provide effective legal protection in the free trade zone. The priority for the legal system is to address new legal issues that require legal reform in the free trade zone. Only then could the free trade zone be successfully set up.