Page 60 - 2015_WhitePaper_web
P. 60
5 White Paper on the Business Environment in China
expanded elsewhere, as has the planned elimination of restric- jin and Guangdong assistance in drawing up their free trade
tions on wholly foreign-invested hospitals.2 zone framework designs. Chengdu of Sichuan, Hefei of An-
hui, Yinchuan of Ningxia and Shenyang of Liaoning have also
An example of how the SFTZ provides real business advan- started to draw up proposals for their own free trade zones. 8
tages is demonstrated by Amazon which decided establish a logis-
tics warehouse in the FTZ and which will allow Amazon to open Guangzhou announced the scope of its proposed Free-
its global platform for domestic markets and also to make cross- Trade Zone (FTZ) plan in its uni ed Guangdong-Hong Kong-
border payments and experiment with other nancial reforms.2 Macau FTZ application. In September 2014, Guangzhou
Mayor Chen Jianhua revealed that in the application
A year after the launch, Beijing said it was lifting submitted to the State Council, two areas totaling 15.2
restrictions on foreign investments in several industries, square kilometers were added to the proposed FTZ. ese
such as the shipping sector in the SFTZ, reported the South are the 7.8 square kilometer Nansha Bonded Zone, to the
China Morning Post, in a bid to encourage the world’s biggest south of the city, and the 7.4 square kilometer Baiyun Airport
shipping lines to expand in China, as they could now directly Economic Zone, which lies in the north. e former includes
tap the booming business at the Yangshan deep-water port, a port, while the latter features Guangzhou’s international
which is part of the FTZ. e new measures also include airport.6 e Guangzhou FTZ lists logistics, manufacturing,
lifting of some restrictions in the manufacturing sector, such land development and nance as its key industries. Although
as on motorcycles, aviation engine parts and railway-bridge other parts of the Nansha New Area and the South Railway
and station equipment, also aimed at wooing foreign investors Station area have not been included, Guangzhou’s contribution
to the zone.3 to the entire Guangdong-Hong Kong-Macao FTZ is larger
than many had originally predicted.8
e policy change follows Premier Li Keqiang’s statement
in September 2014 that market forces would be allowed to Earlier, in November 2013, Governor Zhu Xiaodan had
play a dominant role in the FTZ. e South China Morning declared Guangdong’s hopes to become the home of China’s
Post reports, according to a circular to ministries and provincial next free trade zone. e proposed Pearl River Delta Free Trade
governments from the State Council, more than 20 sectors Zone would encompass the special administrative regions of
are to be opened up to overseas investors in the FTZ. For Hong Kong and Macao as well as parts of the cities of Shen-
the rst time, they will be allowed to own a controlling stake zhen, Zhuhai, and Guangzhou, making it potentially much
in joint-venture shipping agencies, with the investment cap larger than the current free trade zone in Shanghai. e plan
raised from 49 to 51 per cent. Foreign investors will also be received a boost when the ird Plenum expressed general
allowed to engage in salt wholesaling.3 support for opening additional free trade zones in China.9
In November 2014, the Post reported that Shanghai Mayor In June 2014, however, the government suspended the
Yang Xiong promised to speed up development of the SFTZ approval of any further Free Trade Zones (FTZ) following a
as a chorus of foreign companies expressed disappointment wave of proposals imitating the Shanghai FTZ, according to
over the pace of pledged reforms a year after the zone’s open- Xinhua. While Premier Li Keqiang had previously announced
ing. Mayor Yang said the government would work towards that pilot projects would commence in several areas, these have
making the yuan freely convertible, among other nancial been inde nitely stalled based on a ood of unsatisfactory
liberalization plans for the FTZ, but gave no timetable. Yang applications.7 It was reported that local governments wanted
said the municipal government would also o er a revised to secure licensing for such zones solely as means to secure
“negative list” in 2015, following criticism that the two previ- funding for land redevelopment.7
ous lists were too long.4
e ban a ected some 20 cities believed to have submitted
One year after the launch, as the Wall Street Journal reports: applications for FTZs. Included is the Guangdong Free Trade
“ e removal of the project’s leader on September 15 marked Zone, which had already received approval yet has now been
the latest setback for the free-trade zone. “ 12 caught up in the blanket ban.7 Faced with downward pres-
sure on GDP growth, many of these places have once again
e seeming lack of clarity and glacial pace of reform in resumed their free trade zone planning. Premier Li Keqiang
Shanghai has not deterred Guangdong, which is attempting has said “China would sum up the experience of the Shanghai
Free Trade Zone at an appropriate time and promote the rep-
nancial experiments with Shenzhen’s Qianhai area, and is licable experience to other parts of the country.” 8
seeking a new zone which, local media speculate, may be even
more ambitious than Shanghai’s – possibly linking to Hong In January 2014, Xinhua had erroneously reported that the
Kong and Macau. And Guangdong isn’t the only place wait- Ministry of Commerce (MOFCOM) had granted approval to
ing in line. Wuhan, Tianjin and even Ningxia, are also con- twelve further Free Trade Zones. Later this was revised in light
templating zone possibilities. 10 of a MOFCOM announcement that no further FTZs had
According to recent news reports, the State Council has
asked the Ministry of Commerce (MOFCOM) to give Tian-
60
expanded elsewhere, as has the planned elimination of restric- jin and Guangdong assistance in drawing up their free trade
tions on wholly foreign-invested hospitals.2 zone framework designs. Chengdu of Sichuan, Hefei of An-
hui, Yinchuan of Ningxia and Shenyang of Liaoning have also
An example of how the SFTZ provides real business advan- started to draw up proposals for their own free trade zones. 8
tages is demonstrated by Amazon which decided establish a logis-
tics warehouse in the FTZ and which will allow Amazon to open Guangzhou announced the scope of its proposed Free-
its global platform for domestic markets and also to make cross- Trade Zone (FTZ) plan in its uni ed Guangdong-Hong Kong-
border payments and experiment with other nancial reforms.2 Macau FTZ application. In September 2014, Guangzhou
Mayor Chen Jianhua revealed that in the application
A year after the launch, Beijing said it was lifting submitted to the State Council, two areas totaling 15.2
restrictions on foreign investments in several industries, square kilometers were added to the proposed FTZ. ese
such as the shipping sector in the SFTZ, reported the South are the 7.8 square kilometer Nansha Bonded Zone, to the
China Morning Post, in a bid to encourage the world’s biggest south of the city, and the 7.4 square kilometer Baiyun Airport
shipping lines to expand in China, as they could now directly Economic Zone, which lies in the north. e former includes
tap the booming business at the Yangshan deep-water port, a port, while the latter features Guangzhou’s international
which is part of the FTZ. e new measures also include airport.6 e Guangzhou FTZ lists logistics, manufacturing,
lifting of some restrictions in the manufacturing sector, such land development and nance as its key industries. Although
as on motorcycles, aviation engine parts and railway-bridge other parts of the Nansha New Area and the South Railway
and station equipment, also aimed at wooing foreign investors Station area have not been included, Guangzhou’s contribution
to the zone.3 to the entire Guangdong-Hong Kong-Macao FTZ is larger
than many had originally predicted.8
e policy change follows Premier Li Keqiang’s statement
in September 2014 that market forces would be allowed to Earlier, in November 2013, Governor Zhu Xiaodan had
play a dominant role in the FTZ. e South China Morning declared Guangdong’s hopes to become the home of China’s
Post reports, according to a circular to ministries and provincial next free trade zone. e proposed Pearl River Delta Free Trade
governments from the State Council, more than 20 sectors Zone would encompass the special administrative regions of
are to be opened up to overseas investors in the FTZ. For Hong Kong and Macao as well as parts of the cities of Shen-
the rst time, they will be allowed to own a controlling stake zhen, Zhuhai, and Guangzhou, making it potentially much
in joint-venture shipping agencies, with the investment cap larger than the current free trade zone in Shanghai. e plan
raised from 49 to 51 per cent. Foreign investors will also be received a boost when the ird Plenum expressed general
allowed to engage in salt wholesaling.3 support for opening additional free trade zones in China.9
In November 2014, the Post reported that Shanghai Mayor In June 2014, however, the government suspended the
Yang Xiong promised to speed up development of the SFTZ approval of any further Free Trade Zones (FTZ) following a
as a chorus of foreign companies expressed disappointment wave of proposals imitating the Shanghai FTZ, according to
over the pace of pledged reforms a year after the zone’s open- Xinhua. While Premier Li Keqiang had previously announced
ing. Mayor Yang said the government would work towards that pilot projects would commence in several areas, these have
making the yuan freely convertible, among other nancial been inde nitely stalled based on a ood of unsatisfactory
liberalization plans for the FTZ, but gave no timetable. Yang applications.7 It was reported that local governments wanted
said the municipal government would also o er a revised to secure licensing for such zones solely as means to secure
“negative list” in 2015, following criticism that the two previ- funding for land redevelopment.7
ous lists were too long.4
e ban a ected some 20 cities believed to have submitted
One year after the launch, as the Wall Street Journal reports: applications for FTZs. Included is the Guangdong Free Trade
“ e removal of the project’s leader on September 15 marked Zone, which had already received approval yet has now been
the latest setback for the free-trade zone. “ 12 caught up in the blanket ban.7 Faced with downward pres-
sure on GDP growth, many of these places have once again
e seeming lack of clarity and glacial pace of reform in resumed their free trade zone planning. Premier Li Keqiang
Shanghai has not deterred Guangdong, which is attempting has said “China would sum up the experience of the Shanghai
Free Trade Zone at an appropriate time and promote the rep-
nancial experiments with Shenzhen’s Qianhai area, and is licable experience to other parts of the country.” 8
seeking a new zone which, local media speculate, may be even
more ambitious than Shanghai’s – possibly linking to Hong In January 2014, Xinhua had erroneously reported that the
Kong and Macau. And Guangdong isn’t the only place wait- Ministry of Commerce (MOFCOM) had granted approval to
ing in line. Wuhan, Tianjin and even Ningxia, are also con- twelve further Free Trade Zones. Later this was revised in light
templating zone possibilities. 10 of a MOFCOM announcement that no further FTZs had
According to recent news reports, the State Council has
asked the Ministry of Commerce (MOFCOM) to give Tian-
60
