A dozen Chinese municipalities and provinces hope to develop free ports, in an effort to advance higher-quality liberalization and to facilitate trade and investment. The provincial government of Liaoning has officially reported its free port plan to the central government for approval, while Qingdao in Shandong province also hopes to build a free port.

“A free port is not simply an upgraded version of a free trade zone (FTZ),” said Wei Jianguo, Vice President of the China Center for International Economic Exchanges. “The biggest difference between them is that an FTZ mainly focuses on improving commodity flow, while a free port fully opens up, ranging from the free flow of commodities and currency, to personnel and information.” China’s process of opening-up would leap forward with the introduction of free ports, said Wei, who is a former Vice Minister of Commerce. “If China were to own more than half of the world’s free ports, meaning it had five of the 10 worldwide, it would become a country with the best business environment and a leader in promoting trade facilitation and liberalization.”

The process would still take time and involve systemic changes, such as the formulation of policies of market access, financial systems and taxation. More than 10 coastal locations, including Shanghai, Tianjin, Zhejiang province, and Sichuan province, are racing to secure approval for free port construction. The plans would make the Chinese mainland more competitive with other major shipping hubs, such as Singapore and Hong Kong, the China Daily reports.