China to Deepen FTZ Reforms, Extend Some Policies Nationwide

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By Alexander Chipman Koty



China’s State Council released a circular on May 23 directing local governments to introduce 27 reforms piloted in its 11 free trade zones (FTZs) nationwide.

The reforms include opening-up measures in the services sector, namely for international shipping services, management, and agencies, as well as international maritime cargo handling services, container yards, and storage yard businesses.

The circular also gives investors from Hong Kong and Macau a wider scope to establish partnership-type law firms that are jointly owned with mainland Chinese partners.

Taken together, the reforms should streamline trade and customs procedures throughout China.

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In China, FTZs are often used to test new policies before they are adopted nationwide. According to the State Council, to date, up to 153 practices originally piloted in FTZs have been replicated nationwide.

Separately, the State Council recently issued three documents on plans for expanding reform and opening-up in the Fujian, Guangdong, and Tianjin FTZs. Each plan stresses areas for the FTZ in question to develop reforms, and sets forward strategies for further integration with their respective regions.

The plan for the Fujian FTZ calls for it to improve governance and marketization, extend economic cooperation with Taiwan, and promote the construction of the 21st Century Maritime Silk Road. The plan puts forward 21 proposed measures to accomplish these goals.

The plan for the Guangdong FTZ aims for it to deepen its position as an advanced hub for foreign investment and a demonstration zone for cooperation with neighboring Hong Kong and Macau. The plan includes 18 proposed measures to expand foreign access to the financial sector and to promote free trade in services between Guangdong, Hong Kong, and Macau.

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Finally, the plan for the Tianjin FTZ encourages it to build investment and trade rules in line with international standards, and to develop demonstration zones in line with the Beijing-Tianjin-Hebei integration plans. Furthermore, the plan proposes 16 measures for the Tianjin FTZ to develop emerging technologies.

The Fujian, Guangdong, and Tianjin FTZs came into force in 2015 as the second generation of FTZs, following the establishment of the Shanghai FTZ in 2013. Earlier this year, China announced the creation of its 12th FTZ, in Hainan, which is set to open in 2020.

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