Foreign companies welcome in Zhanjiang FTZ oil and gas complex
April 7, 2020 Category China News Round-up, Weekly
The Chinese government has agreed to the set up of a complete oil and gas production chain in the China (Zhejiang) Pilot Free Trade Zone (FTZ), which will introduce international traders, let private companies to process refined oil products and actively promote yuan settlement of trade in bulk commodities. This shows that China’s energy market, especially its energy derivatives market, is opening wider to the world. The Zhejiang pilot FTZ will welcome international investors, including futures exchanges from New York, Dubai, London and Singapore, as well as international oil traders. “The measures include a set of comprehensive support policies on the basis of the listing of yuan-denominated crude oil futures, in a bid to accelerate the opening of the financial and derivative markets, enhance China’s pricing power in the commodity sector, and promote yuan settlement in trade,” Qu Xinrong, Senior Research Fellow of the Shanghai Petroleum and Natural Gas Exchange, told the Global Times.
The Shanghai Futures Exchange (SHFE) listed crude oil futures with yuan settlement in March 2018. “Measures introduced in the Zhejiang FTZ will further advance the internationalization of the yuan, and at the same time will make China’s capital market more open to the world,” Hu Qimu, Senior Fellow at the Sinosteel Economic Research Institute said.
According to an investment guide released by the Zhejiang pilot FTZ on February 21, all types of foreign-funded enterprises will receive awards of up to CNY5 million, while foreign professionals will receive corresponding subsidies, individual tax breaks and other favorable policies. Foreign investors are encouraged to invest in the entire oil and gas industry chain, including oil products, maritime services, petrochemicals, advanced manufacturing, finance, cross-border e-commerce and other energy-related industries, according to the Zhejiang pilot FTZ. Non-state-owned refining and chemical enterprises will be allowed to carry out pilot exports of oil by-products, the Global Times reports.
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