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6 White Paper on the Business Environment in China
opened up to overseas investors in the FTZ. For the first time, hai, and Guangzhou, making it potentially much larger than the
they will be allowed to own a controlling stake in joint-venture current free trade zone in Shanghai. The plan received a boost
shipping agencies, with the investment cap raised from 49 to 51 when the Third Plenum expressed general support for opening
per cent. Foreign investors will also be allowed to engage in salt additional free trade zones in China.9
wholesaling.3
In June 2014, however, the government suspended the
In November 2014, the Post reported that Shanghai Mayor approval of any further Free Trade Zones (FTZ) following a
Yang Xiong promised to speed up development of the SFTZ as a wave of proposals imitating the Shanghai FTZ, according to
chorus of foreign companies expressed disappointment over the Xinhua. While Premier Li Keqiang had previously announced
pace of pledged reforms a year after the zone’s opening. Mayor that pilot projects would commence in several areas, these have
Yang said the government would work towards making the yuan been indefinitely stalled based on a flood of unsatisfactory
freely convertible, among other financial liberalization plans for applications.7 It was reported that local governments wanted to
the FTZ, but gave no timetable. Yang said the municipal govern- secure licensing for such zones solely as means to secure funding
ment would also offer a revised “negative list” in 2015, following for land redevelopment.7
criticism that the two previous lists were too long.4
The ban affected 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
“The 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 pressure
on GDP growth, many of these places have once again re-
The seeming lack of clarity and glacial pace of reform in sumed their free trade zone planning. Premier Li Keqiang has
Shanghai has not deterred Guangdong, which is attempting fi- said “China would sum up the experience of the Shanghai Free
nancial experiments with Shenzhen’s Qianhai area, and is seek- Trade Zone at an appropriate time and promote the replicable
ing a new zone which, local media speculate, may be even more experience to other parts of the country.” 8
ambitious than Shanghai’s – possibly linking to Hong Kong
and Macau. And Guangdong isn’t the only place waiting in line. In January 2014, Xinhua had erroneously reported that the
Wuhan, Tianjin and even Ningxia, are also contemplating zone Ministry of Commerce (MOFCOM) had granted approval to
possibilities. 10 twelve further Free Trade Zones. Later this was revised in light
of a MOFCOM announcement that no further FTZs had yet
According to recent news reports, the State Council has received approval, though a number of applications were subject
asked the Ministry of Commerce (MOFCOM) to give Tianjin to ongoing review, including zones in Guangdong and Tianjin.7
and Guangdong assistance in drawing up their free trade zone
framework designs. Chengdu of Sichuan, Hefei of Anhui, Yin- By late June 2014, the overall plan for the proposed Guang-
chuan of Ningxia and Shenyang of Liaoning have also started to dong free trade zone was back on track, having undergone two
draw up proposals for their own free trade zones. 8 rounds of consultation with the relevant ministries and com-
missions. The proposed Guangdong FTZ will cover four areas,
Guangzhou announced the scope of its proposed Free-Trade namely, the Nansha New Area Bonded Zone, Qianhai New
Zone (FTZ) plan in its unified Guangdong-Hong Kong-Ma- Area, Hengqin New Area and Guangzhou Baiyun Airport
cau FTZ application. In September 2014, Guangzhou Mayor Comprehensive Bonded Zone.6
Chen Jianhua revealed that in the application submitted to the
State Council, two areas totaling 15.2 square kilometers were Qianhai in Shenzhen is one of more than 10 newly created
added to the proposed FTZ. These are the 7.8 square kilome- or proposed special zones. Six years from now, the New York
ter Nansha Bonded Zone, to the south of the city, and the 7.4 Times reports that Shenzhen officials envision, Qianhai will be
square kilometer Baiyun Airport Economic Zone, which lies a thriving, international finance district in Shenzhen to rival
in the north. The former includes a port, while the latter fea- Manhattan, the city of London or Hong Kong, with a working
tures Guangzhou’s international airport.6 The Guangzhou FTZ population of 650,000 people generating annual gross domestic
lists logistics, manufacturing, land development and finance product of around US$25 billion in Qianhai by 2020 — plans
as its key industries. Although other parts of the Nansha New that call for total investment of nearly 400 billion renminbi, or
Area and the South Railway Station area have not been includ- about US$65 billion.14
ed, Guangzhou’s contribution to the entire Guangdong-Hong
Kong-Macao FTZ is larger than many had originally predicted.8 Officials in Qianhai like to point out that President Xi’s first
trip outside Beijing after assuming leadership of the Communist
Earlier, in November 2013, Governor Zhu Xiaodan had de- Party in late 2012 was to Shenzhen and Qianhai, where he spoke
clared Guangdong’s hopes to become the home of China’s next of national rejuvenation and the pursuit of what he has called
free trade zone. The proposed Pearl River Delta Free Trade Zone the “Chinese dream.” “The goal of Qianhai is to be a dream
would encompass the special administrative regions of Hong factory for the Chinese dream,” said He Zijun, deputy director
Kong and Macao as well as parts of the cities of Shenzhen, Zhu- of the Qianhai Authority, which administers the zone.14
68
opened up to overseas investors in the FTZ. For the first time, hai, and Guangzhou, making it potentially much larger than the
they will be allowed to own a controlling stake in joint-venture current free trade zone in Shanghai. The plan received a boost
shipping agencies, with the investment cap raised from 49 to 51 when the Third Plenum expressed general support for opening
per cent. Foreign investors will also be allowed to engage in salt additional free trade zones in China.9
wholesaling.3
In June 2014, however, the government suspended the
In November 2014, the Post reported that Shanghai Mayor approval of any further Free Trade Zones (FTZ) following a
Yang Xiong promised to speed up development of the SFTZ as a wave of proposals imitating the Shanghai FTZ, according to
chorus of foreign companies expressed disappointment over the Xinhua. While Premier Li Keqiang had previously announced
pace of pledged reforms a year after the zone’s opening. Mayor that pilot projects would commence in several areas, these have
Yang said the government would work towards making the yuan been indefinitely stalled based on a flood of unsatisfactory
freely convertible, among other financial liberalization plans for applications.7 It was reported that local governments wanted to
the FTZ, but gave no timetable. Yang said the municipal govern- secure licensing for such zones solely as means to secure funding
ment would also offer a revised “negative list” in 2015, following for land redevelopment.7
criticism that the two previous lists were too long.4
The ban affected 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
“The 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 pressure
on GDP growth, many of these places have once again re-
The seeming lack of clarity and glacial pace of reform in sumed their free trade zone planning. Premier Li Keqiang has
Shanghai has not deterred Guangdong, which is attempting fi- said “China would sum up the experience of the Shanghai Free
nancial experiments with Shenzhen’s Qianhai area, and is seek- Trade Zone at an appropriate time and promote the replicable
ing a new zone which, local media speculate, may be even more experience to other parts of the country.” 8
ambitious than Shanghai’s – possibly linking to Hong Kong
and Macau. And Guangdong isn’t the only place waiting in line. In January 2014, Xinhua had erroneously reported that the
Wuhan, Tianjin and even Ningxia, are also contemplating zone Ministry of Commerce (MOFCOM) had granted approval to
possibilities. 10 twelve further Free Trade Zones. Later this was revised in light
of a MOFCOM announcement that no further FTZs had yet
According to recent news reports, the State Council has received approval, though a number of applications were subject
asked the Ministry of Commerce (MOFCOM) to give Tianjin to ongoing review, including zones in Guangdong and Tianjin.7
and Guangdong assistance in drawing up their free trade zone
framework designs. Chengdu of Sichuan, Hefei of Anhui, Yin- By late June 2014, the overall plan for the proposed Guang-
chuan of Ningxia and Shenyang of Liaoning have also started to dong free trade zone was back on track, having undergone two
draw up proposals for their own free trade zones. 8 rounds of consultation with the relevant ministries and com-
missions. The proposed Guangdong FTZ will cover four areas,
Guangzhou announced the scope of its proposed Free-Trade namely, the Nansha New Area Bonded Zone, Qianhai New
Zone (FTZ) plan in its unified Guangdong-Hong Kong-Ma- Area, Hengqin New Area and Guangzhou Baiyun Airport
cau FTZ application. In September 2014, Guangzhou Mayor Comprehensive Bonded Zone.6
Chen Jianhua revealed that in the application submitted to the
State Council, two areas totaling 15.2 square kilometers were Qianhai in Shenzhen is one of more than 10 newly created
added to the proposed FTZ. These are the 7.8 square kilome- or proposed special zones. Six years from now, the New York
ter Nansha Bonded Zone, to the south of the city, and the 7.4 Times reports that Shenzhen officials envision, Qianhai will be
square kilometer Baiyun Airport Economic Zone, which lies a thriving, international finance district in Shenzhen to rival
in the north. The former includes a port, while the latter fea- Manhattan, the city of London or Hong Kong, with a working
tures Guangzhou’s international airport.6 The Guangzhou FTZ population of 650,000 people generating annual gross domestic
lists logistics, manufacturing, land development and finance product of around US$25 billion in Qianhai by 2020 — plans
as its key industries. Although other parts of the Nansha New that call for total investment of nearly 400 billion renminbi, or
Area and the South Railway Station area have not been includ- about US$65 billion.14
ed, Guangzhou’s contribution to the entire Guangdong-Hong
Kong-Macao FTZ is larger than many had originally predicted.8 Officials in Qianhai like to point out that President Xi’s first
trip outside Beijing after assuming leadership of the Communist
Earlier, in November 2013, Governor Zhu Xiaodan had de- Party in late 2012 was to Shenzhen and Qianhai, where he spoke
clared Guangdong’s hopes to become the home of China’s next of national rejuvenation and the pursuit of what he has called
free trade zone. The proposed Pearl River Delta Free Trade Zone the “Chinese dream.” “The goal of Qianhai is to be a dream
would encompass the special administrative regions of Hong factory for the Chinese dream,” said He Zijun, deputy director
Kong and Macao as well as parts of the cities of Shenzhen, Zhu- of the Qianhai Authority, which administers the zone.14
68
