Shanghai has submitted the plan on building a free trade port to relevant authorities for consultation, the Economic Information Daily learnt from a number of front-line builders and experts involved in the construction of Shanghai pilot free trade zone (FTZ). Compared to the FTZ, the free trade port is expected to make new breakthroughs in the liberalization of the border area. It will cancel or minimize the trade control measures for goods entering the zone. It is expected to require no customs clearance, tax payment and no restriction on carrying trade. In addition, the international financial leasing and other offshore industries will also become major highlights in Shanghai free trade port.
“We will grant more powers to pilot free trade zones to conduct reform, and explore the opening of free trade ports.” The proposal in 19th CPC National Congress report caused a heated debate. It is learnt that at present, Shanghai, Zhejiang, Fujian and Guangdong are considering or exploring free trade ports. Shanghai is undoubtedly leading the way. Recently, the Ministry of Commerce (MOCOM) said that it will work with Shanghai Municipality and relevant departments to study and formulate plans for the establishment of a free trade port.
“At present, Shanghai has submitted the plan on building a free trade port to relevant authorities for consultation. In the next, Pudong District will work with the relevant departments to do a good job in the construction of a regional seine and regulatory platform construction, making preparations for official launch,” said Hang Yingwei, deputy director of Shanghai Free Trade Zone Administrative Committee.
It is reported that as China’s first pilot FTZ, Shanghai free trade port is regarded as a major breakthrough for Shanghai FTZ version 3.0.
According to the plan on comprehensively deepening the reform and opening-up of the China (Shanghai) pilot free trade zone released in March, Shanghai will build free trade port in bonded port area in Yangshan, Shanghai Pudong Airport and other special supervision areas.
What is a free trade port? Wang Yang, vice premier of the State Council, said in an article published on the People's Daily on the November 10 that a free trade port is a special area outside the territory of a country (region) where cargo, capital and personnel can go in and out freely and most goods are exempted from tariffs. It is a special economic function zone with the highest level of openness in the world. Wang said in the article that China has long coastlines and rich offshore resources. It is of great significance to explore a free trade port with Chinese characteristics so as to create an open new highland with a higher level of openness, a better business environment and a stronger radiation role and to promote the innovation and development of an open economy.
At present, the world-famous free trade ports include Hong Kong, Singapore, Rotterdam and Dubai. In Singapore, for example, all of its trade clearances can be handled electronically. 99 percent can be completed within 10 minutes. It saves billions of dollars of trade cost each year.
“In short, a free trade port is a free trade zone in the free trade zone.” Gu Hongmei, a member of the Pudong CPPCC in who participates in the construction of a free trade zone and Commissioner of Yangshan Customs, said that compared with the free trade zone, a large change in the free trade port is about the liberalization of front-line management. Relying on IT regulatory measures, the free trade port will cancel or minimize the trade control measures for incoming goods, minimize first-tier declaration procedures and substantially enhance the level of trade facilitation.
"Although the original FTZ exempted tariffs, the flow of goods in the zone is still constrained, causing obstacles to the development of carrying trade. In contrast, free trade ports require no customs clearance, tax payment and no restriction on carrying trade," Hang Yingwei said.
Experts said that in addition to trade, free trade ports can also implement management system on financial, foreign exchange, investment and immigration in accordance with international practice, creating an offshore environment. “Many industries with offshore features, such as international financial leasing, international ship registration and international transit, will usher in opportunities for development," said Gu Hongmei.
It is noteworthy that like the FTZ, Shanghai free trade port under construction in Shanghai is not only its own private plots but also a strategy that serves country’s opening-process. To combine with the "Belt and Road" initiative and the development of the Yangtze River Economic Belt will also become the new mission of Shanghai's free trade port.
"The free trade port that Shanghai wants to build is not a simple upgrade of the bonded area or the special customs control area. It will strive to reach the international standard, explore an economic management system and mechanism with highest standard and at a high level,” Shanghai municipal government said at the Shanghai Municipal People's Congress for the second half of this year.
At present, according to the unified deployment of the Central Party Committee and the State Council, the Ministry of Commerce is working together with relevant provinces, municipalities and departments on work building free trade ports on the basis of building high-standard FTZs.
Translated by Coral Zhong
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