Aerial photo taken on March 9, 2017 shows the Shanghai free trade zone (FTZ) in Shanghai, east China. (Xinhua/Ding Ting)
China plans to set up six new pilot free trade zones (FTZ) and open a new section at the China (Shanghai) Pilot Free Trade Zone to form a more extensive FTZ network and further open up the Chinese market.
"The Ministry of Commerce is working with departments and local authorities to promote and perform relevant work to establish six more FTZs and open a new section at the China (Shanghai) Pilot Free Trade Zone," said Gao Feng, spokesperson of China's Ministry of Commerce (MOC).
During a MOC press conference on July 4, Gao noted that these new measures would further optimize China's FTZ layout and better serve the country's national strategy.
"Relevant government departments have formulated the overall plan for the new section at the China (Shanghai) Pilot Free Trade Zone," said Ying Yong, mayor of Shanghai. He added that they were now awaiting approval.
The new section will highlight investment and trade liberalization as well as innovation and breakthroughs in policies and systems in areas such as facilitation of investment and business operation, free entry and exit of goods, the flow of capital, the openness of transportation, and employment, Ying explained.
Ying added that efforts would also be made to explore more competitive taxation arrangements by benchmarking the current taxation systems against international rules.
Since September 2013, when China established its first FTZ, the country has continuously intensified its efforts in FTZ expansion, increasing the number of FTZs to 12 so far.
Over the past five years or so, FTZs in China have attracted over 600,000 companies, among which nearly 40,000 are foreign-funded. Gao explained that last year, 9,409 foreign-funded enterprises were set up in FTZs in China, representing a 37.5 percent year-on-year growth. This figure accounted for 15.5 percent of the total number of foreign-funded companies established in the country during the same period.
Actual use of foreign investment in China's FTZs reached 107.3 billion yuan (about $15.61 billion) in 2018, 3.2 percent higher than the previous year. This accounted for 12.1 percent of the total amount of foreign investment actually utilized in the country last year, said Gao. He noted that FTZs are now a vital engine for attracting foreign investment.
China's FTZs have yielded positive results over the years. However, Zhang Jianping, a researcher at the Chinese Academy of International Trade and Economic Cooperation, believes that the current number of FTZs cannot adequately meet the needs of China's plan for further opening up and pursuit of high-quality development.
By establishing new FTZs, China can further facilitate the synergy of FTZs and regional cooperation under free trade agreements, thus boosting reform and opening up more significantly, added Zhang.
Over the past five years, China has witnessed many favorable effects of its endeavors to promote investment and trade facilitation and innovative development in various FTZs across the country. The time required to start a business in an FTZ has been reduced, and the procedures for examination and approval have been simplified.
Moreover, the recently released negative list of foreign investment access in China's FTZs was cut from 45 to 37 items, signifying the country's strong determination to lift restrictions on market access further.