China on Thursday officially opened three new pilot free trade zones (FTZs) and expanded one as it seeks greater opening-up and high-quality development.
The three new FTZs are in Beijing and the provinces of Anhui and Hunan, increasing the total number of the country’s FTZs to 21, while the expanded one is in the coastal province of Zhejiang.
The launch came after the State Council on Monday issued a master plan to outline the priorities for the three new pilot FTZs, and adopted a plan to double the area of the pilot FTZ in Zhejiang.
China’s decision to set up a new batch of pilot FTZs demonstrated the country’s firm determination to accelerate the formation of a new development pattern through a higher level of opening-up, Vice Commerce Minister Wang Shouwen said at a press briefing on Monday.
Experts believe that the new FTZs will further improve trade and investment liberalization and facilitation in China through a new round of system and mechanism reform and innovation. It will also grasp the strategic opportunities brought about by the scientific and technological revolution, and promote the transformation and upgrading of China’s foreign trade and the development of strategic emerging industries.
Zhou Mi, with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said the new zones are a supplement to the layout of the existing 18 pilot FTZs. “From the coastal areas to the central inland regions, it shows that China hopes to promote diversified and higher-level opening-up,” said Zhou.
Experts said the expansion of the FTZ is an effort to boost the development momentum of the entire central region and further expand the entire Chinese market, and therefore, foreign-funded enterprises will focus more on the Chinese market in the future.
Zhou believes that the three new FTZs will attach greater importance to the overall investment environment, seeking to meet more and higher demands of foreign investors to realize coordinated development with local companies and industries.
“The new step provides foreign-funded enterprises with good expectations for China’s continuous opening-up,” Zhou said. “It also provides system innovation and more experimental attempts which can effectively cut investment costs and loosen investment restrictions.”
Xu Xiangping, head of Hunan’s commerce department, said the 21 FTZs cover the eastern, central and western regions, and each one has its strategic positioning and development goals.
The Beijing pilot FTZ will focus on supporting the construction of an innovation center with global influence. It will accelerate the construction of a leading area for the expansion of trade in services and a pilot area for the digital economy.
The new pilot FTZ in Hunan will focus on building a world-class advanced manufacturing cluster and an international investment and trade corridor linking the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao Greater Bay Area. It will also be a leading area for in-depth economic and trade cooperation between China and Africa.
Expected to set the standard for opening-up in the inland region, the pilot FTZ in Anhui will focus on promoting the in-depth integration of scientific and technological innovation and the development of the real economy. It will accelerate the pace of its pioneering role in scientific and technological innovation and the cluster development of advanced manufacturing and strategic emerging industries, and promote the integrated development of the Yangtze River Delta.
The expanded area in Zhejiang will focus on building a new type of international trade center and a global shipping and logistics hub, as well as the construction of a commodity resource allocation base centered on oil and gas. It will also see the construction of a digital economy development demonstration zone and a cluster area for advanced manufacturing industries.
FTZs are the new high ground for China’s reform and opening-up and an important platform to absorb foreign capital. Seven years into China’s pilot FTZ mechanism, a total of 260 institutional innovations have been formulated and replicated nationwide with remarkable results.
In the first seven months of 2020, more than 3,300 new foreign-funded enterprises were established in the already existing 18 pilot FTZs. These FTZs also reported an actual use of foreign investment of over 90 billion yuan (13.3 billion U.S. dollars) and contributed 2.7 trillion yuan of foreign trade, accounting for 16.8 percent and 13.5 percent of the country’s total, respectively.