China's new free trade zones
Recognising the success of reforms implemented in the Shanghai Free Trade Zone, China's State Council has rolled out many of the changes nationwide and announced that it will create new free trade zones (FTZs) in Tianjin, Fujian and Guangdong.
Some details of how the new FTZs will work were released in April, in tandem with a plan for pursuing further reforms in the Shanghai FTZ. While the FTZs have many reform objectives in common, each also has a distinct operational focus.
The FTZs will have their own administrative bodies, working along the same lines as in the Shanghai FTZ. Company registrations will be conducted on a one-stop-shop basis, where, as long as a business scope is not listed on the newly unified "negative list" for overseas investment, foreign-invested enterprises will follow record-filing procedures rather than having to apply for approvals.
Other shared reforms include easing restrictions on foreign investment, relaxing foreign exchange and other finance-oriented regulations and simplifying customs procedures. It still remains unclear as to whether various tax incentives may play a part in the FTZs.
The Tianjin FTZ covers an area of about 120 square kilometres, including the Tianjin Port Area, the Tianjin Airport Area, and the Binhai New Area Central Business District. This FTZ is expected to spearhead economic development in China's northern region, including Beijing and Hebei.
Borrowing from the successes in Shanghai, the Tianjin Port Area will focus on development of modern services, including shipping logistics, international trade and financial leasing. The Tianjin Airport Area will focus on aviation logistics, high-end manufacturing in aerospace and equipment, and information technology. The Binhai New Area will target innovative development of the financial industry.
The Fujian FTZ is primarily tasked with opening up and building trade relations between the Chinese mainland, Taiwan and the other countries along China's so-called Maritime Silk Road. Comprising a total of about 118 square kilometres, the Fujian FTZ includes sections of Pingtan, Xiamen and Fuzhou. Pingtan's focus is the expansion of trade and tourism, as well as financial reforms related to cross-border flow of capital. Xiamen will primarily act as a shipping hub and regional financial services centre. Fuzhou will focus on advanced manufacturing and financial innovation.
Guangdong's FTZ also encompasses three areas, totalling about 116 square kilometres: the Nansha New Area of Guangzhou (including the bonded port zone), the Qianhai-Shekou Area of Shenzhen (including the bonded port zone), and Hengqin New Area of Zhuhai. With an eye toward trade liberalisation, financial reforms and development of a market-oriented business environment, the Guangdong FTZ is primarily tasked with deepening economic cooperation between mainland China, Hong Kong and Macao.
The Nansha New Area will focus on international trade, shipping, logistics and high-end manufacturing. The Qianhai-Shekou Area will focus on financial services, information and technology-related services, and emerging modern services of strategic value to the country (including e-commerce). Hengqin New Area will target high-technology industry, business financing and a host of services related to travel, leisure, health, education and culture.
Strengthening regional economies
Together, these four FTZs form a key component of China's strategy to strengthen its regional economies through enhancement of international trade in goods and services, development of regional financial centers and promotion of both inbound and outbound investment.
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Nexia TS (Shanghai) Ltd, China
Nexia TS (Shanghai) Ltd, China