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Free trade zones to blaze new trails as building new leading areas becomes a priority of opening up this year
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Building new leading areas becomes a priority of this year’s opening up

Free trade ports to come into being and free trade zones to break new grounds

The Report on the Work of the Government this year has proposed to fully replicate the successful model of the free trade zones and explore to construct free trade ports with the purpose of building a new leading area of reform and opening up. This has also been made one of the work priorities in many places including Sichuan and Anhui, from where suggestions have been submitted during the NPC and CPPCC sessions on exploring the construction of free trade ports or free trade zones.

According to industry estimates, free trade ports will surface as a new leading area of reform and opening up this year as the third groups of free trade zones celebrate their first anniversary. Amid the new round of opening up that focuses on the service industry, free trade zones and free trade ports are expected to take the lead in exploring new fields of opening-up and continue to play a vanguard role in China’s reform and opening up.

Free trade ports are expected to come into being this year

 Free trade zones and free trade ports have once again become commonly used words during this years NPC and CPPCC sessions. Delegations from Sichuan and other provinces have submitted their proposals of exploring to build free trade ports while Anhui among other provinces have voiced their hope to set up a pilot free trade zone.

 As usual, delegations from the coastal areas have showed great initiative. For example, several members of the CPPCC National Committee have jointly submitted a proposal in which they expressed their support for turning Dalian into one of Chinas first free trade ports. According to them, this would be of great strategic significance to China’ implementation of the balanced regional development strategy, creation of the new pattern of all-round open-up in Northeast Asia and enhancement of the international competitiveness of Northeast China as an old industrial base.

Zhang Guoqing, mayor of Tianjin and deputy to the national NPC remarked that Tianjin is actively applying for building the Beijing-Tianjin-Hebei Free Trade Zone. In his view, the free trade zone belongs not only to Tianjin but also serves the entire Beijing-Tianjin-Hebei region. It is the region’s platform for opening up to the outside world.

Also during the two sessions, Anhui delegation put forward the proposal for the country to support Anhui in building a pilot free trade zone. The delegation believes that Anhui, which is home to 17 national-level economic development zones and high-tech zones and three comprehensive bonded areas, among other full-fledged carriers of opening up, have the right conditions and foundation for setting up a pilot free trade zone.

At the plenary meeting of the Sichuan delegation, the proposal of supporting Sichuan to construct an inland free trade zone has been discussed and passed. On the basis of the Tianfu New District, Sichuan will be devoted to building a leading area of inland open economy.

 As of now, more than a dozen provinces and cities including Shanghai, Zhejiang, Tianjin, Guangdong and Sichuan, have been competing for a free trade port. As the reporter of the Economic Information Daily has previously learned, the Government of Liaoning Province has already submitted Tianjin’s plan to bid for a free trade port to the State Council and sent copies to the departments concerned. Meanwhile, Qingdao is striving to build a free trade port by replying on Qingdao Port and Qingdao West Coast Economic Zone where Qingdao Port is located. The plan for building the Qingdao free trade port has currently been formed and communicated to the Ministry of Commerce.

 

Existing free trade zones are energetically seeking innovation and breakthroughs

On the other hand, all the eleven existing pilot free trade zones in China are seeking breakthroughs. For instance, Shanghai as one of the first places to set up a pilot free trade zone, has made it clear that it will push forward reform and opening up in 2018 by focusing on free trade zones. It will speed up the construction of a “risk test” area for the open-type economic system in line with the highest international level and standard.

According to sources from Shanghai, Shanghai Free Trade Zone will break new ground in the construction of a free trade port and lose no time in improving relevant plan. It will work to optimize the environment for cross-border trade to reduce port charges and shorten the time spent.

Mr. Zhang Zhaoan, vice-president of the Shanghai Academy of Social Sciences, told the Economic Information Daily that Shanghai Pilot Free Trade Zone has been running for four years and notable success has been made so far. In furthering the reform, it has summed up more than 100 replicable lessons in the area of investment, trade, finance and management system. With regard to opening up, such as the negative list-based foreign capital management policy and trade facilitation, Shanghai Pilot Free Trade Zone has offered a lot of experience as well, which provides a sound foundation for further open-up. Now as reform deepens, demand for greater openness becomes higher. As a pioneer of reform who has took a huge step in this regard, Shanghai Free Trade Zone hopes to be made part of the pilot free trade port, thereby continuing to lead the country in reform, opening up and innovative development.

 Aside from making explorations and innovation, lessons learned will be generalized to a wider area. According to deputy-director Ning Jizhe of the National Development and Reform Commission, items of the negative list is expected to be reduced and the system will be spread to the rest of the country.

 Relevant officer of the Ministry of Commerce has indicated that, the next step will be building an open platform. Work will be made to raise the development level of various development zones, give pilot free trade zones a bigger say in reform and explore to create a free trade port, thus building a leading area in reform and opening up. As well, effort will be made to optimize the layout by opening western China further to the outside world, clearing the channels of open-up and promoting the formation of new growth points. In this way, we can make China’s western region the forefront of opening up. Meanwhile, the development level of Eastern China will be enhanced to drive open development in the central region.

New leading areas of open-up release new dividends

 The Report on the Work of the Government this year has indicated that China needs to lift the control over general manufacturing, and further open up areas like telecommunication, medical care, education, pension and new-energy vehicle. China also needs to orderly open up the bank card clearing and settlement market, lift restrictions on the business scope of foreign insurance brokers, relax or remove foreign share restriction on banks, securities, fund management, futures and financial asset management companies to level market access for Chinese and foreign banks.

Amid the new round of opening up that focuses on the service industry, free trade zones and free trade ports are expected to take the lead in exploring new fields of opening-up (such as conducting an advanced “risk test” for opening up the financial industry) and continue to play a vanguard role in China’s reform and opening up.

Experts point out that free trade ports will become new leading areas of open-up in China after pilot free trade areas, only with better business environment, greater radiation and higher level of openness. This would be of great significance to the innovative development of the open economy in China.

 Sang Baichuan, professor at the University of International Business and Economics told the Economic Information Daily that, Chinas very purpose of setting up pilot free trade zones is to create replicable experience. After several years of operation, eleven free trade zones in China, represented by Shanghai Pilot Free Trade Zone, have generated workable experience in reform and opening up that is fully replicable in the rest part of the country. This would eventually drive reform, open-up and development in China.

According to Sang Baichuan, China has a long coastline and abundant offshore resources. As building free trade ports are actually creating new leading areas of opening up, people from all parts of the country have attached great attention to and showed great interest in setting up a free trade port. As we explore to build free trade ports in the future, new types of trade will be formed and we will make greater headway in offshore trade, offshore finance, port trade and other areas. Today, relatively mature experience has been formed internationally in the construction of free trade ports. As China opens itself further to the world, exploring to build a free trade port will help create new areas of opening up and make China’s open-up more varied.

 Dong Yan, a researcher at the Institute of World Economies and Politics of the Chinese Academy of Social Sciences, told the Economic Information Daily that a pilot free trade zone is more than a free trade zone; it is an important test field for pushing forward reform and opening up. In this sense, a pilot free trade port could be an area with even greater openness. In her view, free trade ports can be built into places of unique functions like Hong Kong and Hainan, if their regional advantages are combined.

 

Source: Economic Information Daily

 

 

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