There was a lot of to-ing and fro-ing last week about this, but it now looks like China will not lift Great Firewall restrictions on Facebook and Twitter in the new Shanghai free-trade zone, despite reports to the contrary.

The People's Daily, the official organ of China's ruling Communist Party, denied a report in the South China Morning Post saying that people would be allowed to access Facebook, Twitter, the New York Times and other banned websites within the groundbreaking free-trade zone in the country's financial hub.

"Today [our] journalists obtained the information from a very powerful channel that these reports are wrong," said the People's Daily.

“The trial system in the free-trade zone doesn’t apply to ideological matters and will strictly control and crack down on prostitution, gambling, drugs and smuggling,” the paper said.

China’s Communist Party enjoys the business opportunities offered by the internet but is wary of the platform it offers for dissenting voices and any questioning of single-party rule.

At the same time, the central government seems prepared to relax some controls to help it promote the free-trade zone in Shanghai’s Pudong financial district, which is a key part of its efforts to sell the city as a financial capital to rival New York and London.

Facebook and Twitter were blocked by Beijing in mid-2009 after riots in the restive western province of Xinjiang, which authorities say were boosted by the social networking sites.

The free-trade zone has been compared to the rules allowed by former supreme leader Deng Xiaoping, who decided to open up the Shenzhen special economic zones to foreign investors about three decades ago, which sparked China's ongoing economic boom.