Page 82 - 2017 White Paper

7 White Paper on the Business Environment in China
1.5 Pilot FreeTrade Zones
Progress Report
In a clear indication that reform measures in China’s
Free Trade Zones (FTZs) were regarded as positive,
the Chinese government in August 2016 announced
that seven new additional FTZs would be allowed to
set up in different regions across the country, bringing
the total number to 11, Xinhua reported. The latest
development follows the 2014 approval for FTZs to be set
up in Guangdong, Tianjin and Fujian, after the perceived
success of the pilot FTZ in Shanghai, which was also given
approval to expand in 2014 (Xinhua 2016).
According to Xinhua, underlying the decision to add
more FTZs is the central leadership’s firm commitment
to reform and opening up. In an interview, China’s
commerce minister Gao Hucheng declared:“The decision
to expand the FTZs shows authorities’ strong resolution
in advancing reforms and opening up” (Xinhua 2016).
The South China Morning Post noted that the decision
is reflective of Chinese leadership’s continuing efforts to
internationalize its economy in an attempt to counter
slowing growth. It also noted that this was the first time
that FTZs were approved not just for the more developed
coastal areas but also for inland regions. The Post report
said that critics had “growing doubts about prospects
for the zones” with foreign investors complaining that
liberalization in the zones was insufficient and that the
yuan was still not fully convertible within the zones;
however, the State Council did relax certain restrictions
in the zones just prior to the announcement of the new
FTZ additions, enabling a relatively “freer market access”
to industries such as shipping, steel and car batteries (Wei Guangzhou, Shenzhen and Zhuhai while the Fujian FTZ
2016).
China Briefing points out that the objective of the
new additional FTZs vastly differs from that of the
original pilot in Shanghai, which basically served as an
experiment for future nationwide reform. Its authors
believe that the decision to add new FTZs is indicative of
the government’s confidence in the FTZs’ ability to drive
investment and its intention to drive regional growth in
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China’s less-developed central and western inland areas
by way of enabling less restrictive access to selected
industries (China Briefing 2016).
When considered alongside the ambitious
development targets outlined in China’s 13th Five Year
Plan and incentives set in place, China’s inland central
and western provinces as well as its coastal regions seem
to be poised for dynamic growth within the next several
years.
Pilot FTZs Expansion: Guangdong,Tianjin
and Fujian
In April 2015, China released details regarding
the establishment of pilot free trade zones (FTZ) in
Guangdong, Tianjin and Fujian as well as long-awaited
plans to further reform and open up the Shanghai FTZ.The
State Council said in a statement that “the plan is a crucial
step for the country to promote reform and opening up
as well as boost trade and facilitate investment” (Xinhua
2015).
Each of the three new FTZs will make full use of its
geographic location. According to Wang Shouwen,
assistant minister of commerce, the Guangdong FTZ
aims to deepen economic cooperation between the
mainland and Hong Kong and Macao, the Tianjin FTZ
is part of a push to coordinate development of the
Beijing-Tianjin-Hebei region, while the Fujian FTZ is
focused on deepening economic cooperation between
the mainland and Taiwan. According to the plan, the
Guangdong FTZ will consist of three parts in the cities of
will cover three areas in Xiamen, Fuzhou and Pingtan, a
new industrial park targeting investment from Taiwan
(Xinhua 2015).
The country plans to spend three to five years in
developing the three FTZs. Mr. Wang said the three FTZs
will be launched soon, but did not give a specific timeline
(Xinhua 2015).