Page 66 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
Economic Zones (SEZs), free-trade zones can experiment director of the International Market Research Institute
with financial models and attract investment. FTZs are of the Ministry of Commerce. FTPs should be close to
organized in areas with many geographical advantages for major transportation hubs and economic hinterlands,
trade such as major seaports and international airports. gathering high-tech and high-level talent from all over
the world, says Xue Rongjiu, deputy director of the
Recent Progress Beijing-based China Society for WTO Studies. He says
FTPs need to be supported by a strong government, a
Many of China’s pilot Free Trade Ports (FTPs), including market-oriented and highly efficient operation and a
in Shanghai and the provinces of Zhejiang and Sichuan, completely internationalized service system. Xue also
plan to build coastal and inland FTP from coastal areas to says that “reform in free trade zones will be strengthened
inland areas, as well as diversify the service function and and some reform experiences from the pilot areas are
build new logistics hubs for air and freight transportation expected to be further promoted all over China”. Gao
services in China’s central and western regions. Ying Feng, spokesman for the Ministry of Commerce, says the
Yong, a National People’s Congress deputy and the mayor ministry will continue to promote reform in FTZs, reduce
of Shanghai, says the city will explore the establishment the negative list of foreign investment in pilot FTZs,
of a FTP, in an effort to facilitate trade and investment, improve the quality of FTZ development and promote
in the China (Shanghai) Pilot FTZ. Such efforts will rely more specific and systematic reform experiences
on Shanghai’s existing facilities such as Yangshan Deep nationwide (China Daily).
Water Port and Pudong International Airport. A FTP is
set up within a country’s or region’s borders but outside Policy Update
its customs supervision. It is a highly open area that
allows the free flow of most commodities, currencies The National Development and Reform Commission
and people. Ying says Shanghai will apply a negative list and the Ministry of Commerce released the shortened
approach to market entry, in which state-owned sectors negative list for FTZs in late June 2018, two days after
and businesses are off-limits to foreign investment. The rolling out a list applicable nationwide. A negative list
move is expected to give foreign companies greater shows areas where investment is limited or prohibited
opportunities in the Chinese market. China will grant for foreign investors, with all other areas presumed to
more power to pilot FTZs and explore the opening of be open. The new list reduces the number of sectors
FTPs, according to the 19th National Congress of the restricted for foreign investors to 45 in all free trade
Communist Party of China in October 2018. A dozen zones, from 95 in 2017. Hao Hongmei, vice-director of
Chinese municipalities and provinces, including Shaanxi, the Foreign Investment Institute at Chinese Academy of
Henan, Zhejiang, Tianjin, Guangdong and Sichuan, are International Trade and Economic Cooperation, said the
already at the forefront of attempts to build FTPs. By move is part of China’s renewed commitment to opening
operating a FTP, the China (Zhejiang) Pilot FTZ is banking its economy. The list was released “when domestic
on developing bulk commodity trade and high-end industries have become much more competent thanks
manufacturing to drive growth as it races to catch up to the rapid development of FTZs. It is time for them
with more established rivals such as Singapore and Hong to expand overseas businesses”, Hao said. “It will not
Kong in the Asia-Pacific region. The Zhejiang FTZ has only enable Chinese companies to collaborate with
developed a plan for a free port within the zone to further foreign firms, but also generate opportunities for foreign
promote commodity trade liberalization and improve investors to enter the Chinese market.” Compared with
global commodity allocation, with the whole industry the negative list for nationwide implementation, the
chain of oil products as the core. one for FTZs outlines the measures to open more key
areas, such as agriculture, mining, culture and value-
The world’s major free trade centers, such as Dubai added telecommunications. Specifically, the foreign
and New York, are all defining themselves as international investment cap for wheat, new corn variety breeding and
free ports or global logistics centers, because this practice seed production in FTZs, will be relaxed from less than
is an effective way to drive regional growth in the trade, 49 percent up to 66 percent ownership by foreigners.
finance and service sectors. The building of FTPs in China Restrictions on joint ventures or foreign cooperation in
is at the exploration stage and should be developed step exploration and exploitation of petroleum and natural
by step, from ports along the coast and rivers to airports gas will be removed. The ratio of foreign invested shares
and dry ports in inland areas, says Bai Ming, deputy in art performance organizations will also be lifted. China
66
Economic Zones (SEZs), free-trade zones can experiment director of the International Market Research Institute
with financial models and attract investment. FTZs are of the Ministry of Commerce. FTPs should be close to
organized in areas with many geographical advantages for major transportation hubs and economic hinterlands,
trade such as major seaports and international airports. gathering high-tech and high-level talent from all over
the world, says Xue Rongjiu, deputy director of the
Recent Progress Beijing-based China Society for WTO Studies. He says
FTPs need to be supported by a strong government, a
Many of China’s pilot Free Trade Ports (FTPs), including market-oriented and highly efficient operation and a
in Shanghai and the provinces of Zhejiang and Sichuan, completely internationalized service system. Xue also
plan to build coastal and inland FTP from coastal areas to says that “reform in free trade zones will be strengthened
inland areas, as well as diversify the service function and and some reform experiences from the pilot areas are
build new logistics hubs for air and freight transportation expected to be further promoted all over China”. Gao
services in China’s central and western regions. Ying Feng, spokesman for the Ministry of Commerce, says the
Yong, a National People’s Congress deputy and the mayor ministry will continue to promote reform in FTZs, reduce
of Shanghai, says the city will explore the establishment the negative list of foreign investment in pilot FTZs,
of a FTP, in an effort to facilitate trade and investment, improve the quality of FTZ development and promote
in the China (Shanghai) Pilot FTZ. Such efforts will rely more specific and systematic reform experiences
on Shanghai’s existing facilities such as Yangshan Deep nationwide (China Daily).
Water Port and Pudong International Airport. A FTP is
set up within a country’s or region’s borders but outside Policy Update
its customs supervision. It is a highly open area that
allows the free flow of most commodities, currencies The National Development and Reform Commission
and people. Ying says Shanghai will apply a negative list and the Ministry of Commerce released the shortened
approach to market entry, in which state-owned sectors negative list for FTZs in late June 2018, two days after
and businesses are off-limits to foreign investment. The rolling out a list applicable nationwide. A negative list
move is expected to give foreign companies greater shows areas where investment is limited or prohibited
opportunities in the Chinese market. China will grant for foreign investors, with all other areas presumed to
more power to pilot FTZs and explore the opening of be open. The new list reduces the number of sectors
FTPs, according to the 19th National Congress of the restricted for foreign investors to 45 in all free trade
Communist Party of China in October 2018. A dozen zones, from 95 in 2017. Hao Hongmei, vice-director of
Chinese municipalities and provinces, including Shaanxi, the Foreign Investment Institute at Chinese Academy of
Henan, Zhejiang, Tianjin, Guangdong and Sichuan, are International Trade and Economic Cooperation, said the
already at the forefront of attempts to build FTPs. By move is part of China’s renewed commitment to opening
operating a FTP, the China (Zhejiang) Pilot FTZ is banking its economy. The list was released “when domestic
on developing bulk commodity trade and high-end industries have become much more competent thanks
manufacturing to drive growth as it races to catch up to the rapid development of FTZs. It is time for them
with more established rivals such as Singapore and Hong to expand overseas businesses”, Hao said. “It will not
Kong in the Asia-Pacific region. The Zhejiang FTZ has only enable Chinese companies to collaborate with
developed a plan for a free port within the zone to further foreign firms, but also generate opportunities for foreign
promote commodity trade liberalization and improve investors to enter the Chinese market.” Compared with
global commodity allocation, with the whole industry the negative list for nationwide implementation, the
chain of oil products as the core. one for FTZs outlines the measures to open more key
areas, such as agriculture, mining, culture and value-
The world’s major free trade centers, such as Dubai added telecommunications. Specifically, the foreign
and New York, are all defining themselves as international investment cap for wheat, new corn variety breeding and
free ports or global logistics centers, because this practice seed production in FTZs, will be relaxed from less than
is an effective way to drive regional growth in the trade, 49 percent up to 66 percent ownership by foreigners.
finance and service sectors. The building of FTPs in China Restrictions on joint ventures or foreign cooperation in
is at the exploration stage and should be developed step exploration and exploitation of petroleum and natural
by step, from ports along the coast and rivers to airports gas will be removed. The ratio of foreign invested shares
and dry ports in inland areas, says Bai Ming, deputy in art performance organizations will also be lifted. China
66
