Journalist of the China Securities Journal learnt that the overall scheme for the third batch of free trade zones (FTZs), the formulation of which is led by the Ministry of Commerce (MOC), the Ministry of Land and Resources, the Ministry of Housing and Urban-Rural Development and the State Oceanic Administration and is jointly participated by seven provinces and municipalities, might be released during the National People's Congress (NPC) and the Chinese Political Consultative Conference (CPPCC). The scheme is divided into two parts. The first part defines the regional scope of the seven newly-added FTZs, while the second part includes the specific schemes formulated according to the unique advantages and demands of the provinces where the seven newly-added FTZs are located in.
Special schemes submitted already
The State Council decided in August 2016 to newly set up seven FTZs in provinces like Liaoning, Zhejiang, Henan, Hubei, Sichuan and Shaanxi as well as Chongqing municipality. The journalist learnt that the seven provincial-level regions have worked out their special schemes for FTZ according to their own advantages and demands. At present, the special schemes have been submitted to relevant authorities for approval and will be made public after approval.
Gao Hucheng, minister of Commerce, indicated earlier that the seven newly-added FTZs will still rely on existing new areas and parks approved by the State Council, stick to the core idea of system innovation, further bring itself into line with high-standard international economic and trade rules, develop piloting structures with different features and focuses in larger area and wider scope, and advance the expansion and opening-up of comprehensively deepening reform. Liaoning focuses on building new engines to improve the overall competitiveness and opening-up level of old industrial bases in Northeast China. Vowing to meet the central government’s requirement on “exploring the construction of Zhoushan free trade port”, Zhejiang will make explorations in liberalizing bulk commodity trading and improving the ability of allocating bulk commodity globally. Henan aims to build itself into a modern transportation hub that serves the “Belt and Road” initiatives. Hubei is tasked by the central government to undertake industries transfer in an orderly way, construct a batch of strategic emerging industries and high-tech industrial bases in the central part of China, and play its demonstration role in implementing the “rise of central China” strategy and advancing the construction of Yangtze River Economic Zone. Chongqing municipality is supposed to play its role as strategic support and connection point, expand its opening up and drive in-depth implementation of western development strategy. Sichuan will work hard to improve its opening-up and support the strategy of mainland opening-up as required by the central government, play its leading role in developing open economy in the mainland, achieve coordinated opening up with areas along the coasts, border and rivers. Shaanxi will give full scope to the role of the “Belt and Road” initiatives in driving western development, improve its opening up, get ahead in reform and opening-up among mainland cities, and explore new models for the economic cooperation and people-to-people exchanges between mainland China and countries along the “Belt and Road” route.
Industry insiders believed that the special schemes, covering the specific rules for the establishment of FTZs, system reform and innovation, are formulated by the seven provincial-level regions in light of their own features and positions.
“System reform and innovation are especially noteworthy.” Bai Ming, deputy director of the Ministry of Commerce of the International Market Research Institute, remarked that the expansion of FTZs will become harder and harder later, so it is quite important to perfect system construction, bring forth new ideas to system and leave more room for the market. For instance, the seven newly-added FTZs together with the four FTZs approved earlier can be built into a national FTZ network. Unified system, especially unified market and management systems, should be arranged. Meanwhile, the FTZ leadership joint conference meeting system should be improved to strengthen the experience exchange among FTZs.
Chen Yao, a researcher with the Institute of Industrial Economics of Chinese Academy of Social Sciences, indicated that several system innovations and reforms, with negative list included, will bring benefit of opening up. Besides sticking to their own positions, the newly-added seven FTZs should also closely connect themselves with national strategies like the “Belt and Road” initiatives, and work in hand with the new normal of national economic development, supply-side structural reform, de-capacity and structural adjustment.
Specific regional scope of newly-added FTZs known
Wang Shouwen, vice-minister of Commerce, recently indicated on a press conference held by the State Council Information Office that the seven provincial-level regions should select areas with sound opening-up foundation, strong regional advantages and mature conditions for supervision as well as areas that could both expand opening-up and effectively prevent risks. Once the regional scope is determined, it should be submitted to the MOC for approval as soon as possible.
The specific regional scope of newly-added FTZs can be known from the 2017 government work reports recently released by the seven provincial-level regions.
Liaoning proposes that cities like Shenyang, Dalian and Yingkou should make more efforts in reform and innovation, speed up the construction of Dalian Jinpu New Area and China-Germany (Shenyang) High-end Equipment Manufacturing Industrial Park, facilitate the development of Dalian Cross-Border E-Commerce Comprehensive Experimental Zone, and advance the construction of border development and opening-up experimental zones in Dandong.
Hubei proposes to boost differentiated development of cities like Wuhan, Xiangyang and Yichang according to their own features, ensure that these cities meet the standards set by the state, and speed up the construction of Wuhan New Port Airport Comprehensive Bonded Area and Wuhan Multimodal Transport Custom Supervision Center.
Chongqing proposes to advance the transformation and upgrading of Chongqing Lianglu-Cuntan Free Trade Port Area, advance the construction of Wanzhou Bonded Area Logistics Center, and strive to set up Jiangjin and Fulin Comprehensive Bonded Areas as well as a batch of bonded area logistics centers.
Shaanxi proposes to speed up the construction of its airport comprehensive bonded area, strive to establish Baoji comprehensive bonded area and set up Northwest International Cargo Airlines Co., Ltd.
Sichuan proposes to speed up the construction of Qingbaijiang Railway Port and Chuannan Lingang Industrial Park, guide port services and industries like high-end manufacturing to gather in FTZ, and encourage enterprises to establish operation center in FTZ.
Zhejiang proposes to advance the planning and construction of reform experimental zones in the province, facilitate the construction of China (Hangzhou and Ningbo) cross-border e-commerce comprehensive experimental zone, and build the “Silk Road” online.
Henan proposes to accelerate the construction of cross-border e-commerce comprehensive experimental zone and airport comprehensive economic experimental zone, speed up the development of ports, and support qualified areas to apply for the establishment of functional ports and special custom supervision regions.
Industry insiders analyzed that the release of the overall scheme for the third batch of FTZs might boost the investment of relevant themes. Sectors like trade, port, shipping logistics, real estate and finance will benefit from the expansion of FTZs. Li Huiyong, chief macro-economic analyst with Shenwan Hongyuan Securities, claimed that the release of the overall scheme for the third batch of FTZs might boost the performance of FTZ-related stocks.
Translated by Jelly Yi
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