Three new Free Trade Zones to be set up in Beijing, Hunan and Anhui
September 29, 2020 Category Foreign trade, Weekly
The Chinese government announced plans to set up three new pilot free trade zones (FTZs) in Beijing, Hunan province and Anhui province, and expand one of the 18 existing FTZs in Zhejiang province to further open up the economy amid the global downturn sparked by the coronavirus pandemic, rising protectionism and unilateralism. China’s 18 existing FTZs were established to attract foreign capital, boost regional development and improve trade. The nation is now allowing more provinces to join this bold experiment, the Global Times reports. “As protectionism and unilateralism rise amid the pandemic, China’s efforts clearly show its responsibility as a major country. This can inject fresh momentum into the global economy as the world is experiencing a serious recession,” said Zhao Ping, Vice Chairman of the China Council for the Promotion of International Trade (CCPIT).
According to the plan, Beijing’s FTZ aims to build the city into a globally influential technology and innovation center, in tandem with the accelerated development of the services and digital economy sectors. Covering 119.68 square kilometers, the Beijing FTZ will focus on next-generation information technology, biology, and technology services. The FTZ in Beijing is a new innovation in global FTZs. It is “the first to feature services trade and technology globally,” said Tian Yun, Vice Director of the Beijing Economic Operation Association. Beijing will treat foreign investors similarly to domestic investors, will maintain a negative list that bars some economic activities, improve trade access and relax restrictions on the service trade in the Beijing-Tianjin-Hebei region where conditions permit, said Beijing Vice Mayor Yang Jinbai. “Beijing’s digital economy has seen steady development with its added value accounting for more than half of the city’s GDP, the best among all cities in China,” said Liu Yang, Research Director at the Capital Institute of Science and Technology Development Strategy. “Beijing also has the capacity to build a digital currency zone and a digital finance system,” said Liu. Yang Xiuling, Director of the Beijing Municipal Bureau of Economy and Information Technology, said a digital asset exchange that provides domestic and international services would be set up in the FTZ. The FTZ will also focus on offering better policies in the services sector, especially in financial services, according to the China Daily.
The Hunan FTZ of 119.76 sq km will focus on attracting overseas investment by loosening application requirements for foreign companies and promoting international cooperation, in particular with African countries and those along the routes of the Belt and Road Initiative (BRI).
Situated in the Yangtze River Delta economic zone, Anhui’s FTZ, which contains a wealth of smart manufacturing enterprises, is set to boost the region’s development and advanced manufacturing, integrated circuit, artificial intelligence and cross-border e-commerce industries.
China’s FTZ layout is divided into two parts: seaborne trade and land trade, Tian Yun told the Global Times. “FTZs in coastal cities, including Shanghai, are developing their competitiveness based on world-class harbors. With ports like Ningbo Zhoushan, the coastal FTZs will have the potential to compete with traditional free trade hubs such as Hong Kong and Singapore. Inland regions, such as Chongqing and Anhui, will explore trade through the less-conventional means of railways, pivoting their markets toward Southeast Asia and Europe. Inland trade through railways is challenging the traditional route of international trade,” Tian said. “For example, with the establishment of the FTZ in Chengdu, the city aims to lure Japanese exporters to transship their goods en route to Europe, instead of going through the traditional route of Singapore via the Strait of Malacca.”
The expanded area of the Zhejiang pilot will focus on building a new type of international trade center, an international shipping and logistics hub, and the construction of a commodity resource allocation base centered on oil and gas. The Ningbo FTZ plans to build the zone into a global shipping hub, an influential oil and gas allocation center, a supply chain innovation center, and a high-quality smart manufacturing demonstration area.
FTZs in China have played significant roles in stabilizing the country’s foreign trade and foreign investment amid the Covid-19 pandemic. In the first half, the total trade value in China’s 18 FTZs surpassed CNY2.2 trillion, accounting for 15.6% of the national total. The actual use of foreign capital in FTZs reached CNY80.78 billion, or 17.1% of the total, the Global Times reports.
Including the three new FTZs, there are now 21 free trade zones in China. China set up its first FTZ in Shanghai in 2013 to attract more foreign investment and promote trade and regional integration.
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