Chinese

Policies

Let firms in and do business at pilot FTZs

2021-9-16 16:28:38

The State Council recently issued the Measures for Promoting Reform and Innovation on Trade and Investment Facilitation in Pilot Free Trade Zones (hereinafter referred to as Measures), rolling out 19 specific measures to enhance the convenience of trade, of investment, of international logistics, and of financial services to the real economy, and explore judicial protection functions for trade and investment convenience, etc.

Wang Shouwen, Vice-Minister of Commerce and Deputy China International Trade Representative, told a regular policy briefing at the State Council Information Office on September 3 that the Measures are expected to deepen the integration of innovations for facilitating trade and investment at the pilot free trade zones (FTZs), grant pilot FTZs greater autonomy, further spur the vitality of market entities and enable more of such successful practices to be replicated and applied elsewhere.

Focus on trade and investment convenience

The Measures proposes to drive more innovation in import trade, set up demonstration bases in and around the FTZs for innovative promotion of import trade, and spur innovation in regulatory frameworks, business models and supportive services for import activities by further enhancing convenience, exploring innovative trade models and improving public services, etc. In addition, the process of importing medical products, including medicine, will be further liberalized. Where conditions permit, the pilot FTZs will be encouraged to import certain drugs and medical supplies via cross-border e-commerce.

As Bai Ming, Deputy Director of the International Market Research Institute under the China Academy of International Trade and Economic Cooperation told China Trade News, “to advance opening-up to a higher level, we need more than before a trade policy of balance in import and export, and the Measures is to drive our foreign trade towards a better balance.” The recent years have seen China making productive efforts to expand import by, for example, holding the China International Import Expo (CIIE) and lowering import tariffs, etc. The pilot FTZs are allowed more convenient tools and preferential policies to expand import and shall leverage such advantages to give full play to import in optimizing resource allocation.

The Measures also proposes to release the potential of new forms of trade, help the pilot FTZs develop offshore trade, and conduct research on corporate income tax and stamp duty policies that may come with the tax reform without base erosion and profit shifting (BEPS) risks.

As explained by Bai Ming, neither the selling and buying parties engaged in offshore trade are local companies but shall enjoy convenience in local transaction or settlement. By developing offshore trade, a pilot FTZ can leverage and strengthen its regional functions and serve more global customers.

To enhance investment convenience, the Measures proposes to open up wider to Hong Kong and Macao investors, and delegate, from provincial tourism authorities to the pilot FTZs, the examination and approval authority over travel agencies with investments from service providers in Hong Kong and Macao under CEPA framework.

According to Bai Ming, tourism has always been the strong suit of Hong Kong and Macao and the sector that links up the two regions with the mainland in the most direct and closest way. More tourism opportunities will translate into more jobs and growth momentum for Hong Kong and Macao.

Enhance the convenience of financial services to the real economy

The Measures proposes to initiate a pilot all-in-one domestic and foreign currency account settlement system at the FTZs, and unify rules, procedures and standards for opening, changing and closing domestic and foreign currency accounts.

Wang Xin, Director of the PBOC Research Bureau, referred to bank accounts as an important carrier and channel for market players to engage in business activities. Under the all-in-one system, the RMB account, foreign currency account, overseas banking account and free trade account, among others, are consolidated to offer market players an easy access to safe and efficient bank account services.

In Sept 2020, PBOC issued the Work Plan for the Pilot Program of All-in-One Domestic and Foreign Currency Bank Settlement Account System and related measures. Starting in July 2021, the pilot program has kicked off in four cities, including Guangzhou, Shenzhen, Fuzhou and Hangzhou. According to Wang Xin, the pilot program has made steady progress and evoked a sound social response, as it helps cut companies’ financial and managerial costs, enhance the efficiency of cross-border trade settlement, create an attractive business environment and build a solid foundation for prompting RMB internationalization and improving macro-prudential management framework.

To intensify the innovation of futures products and service functions in the pilot FTZs, the Measures proposes to further increase the varieties of commodity futures, strengthen the cooperation between the pilot FTZs and futures exchanges, and launch new futures products that have proven reliable in overseas markets and that see a strong domestic demand but a high dependence on foreign trade, said Tang Wenhong, Director General of MOFCOM Department of Pilot Free Trade Zone and Free Trade Port. Now, our exchanges are intensifying efforts to bring new shipping futures to the market, and are well prepared, both technically and business-wise.

Now, the pilot FTZs in Shanghai, Zhejiang, Shandong and other cities and regions have signed strategic agreements with relevant futures exchanges for cooperation over strategic investment and shareholding, spot-futures linkage, and the development of multi-tier markets to help the FTZs build a bulk commodity trade system.

Wang Shouwen also pointed out that, by implementing trade and investment facilitation measures, the pilot FTZs will let firms in and let them do business with greater convenience. We will advance higher-level opening-up and higher-quality development of the FTZs, push forward with reforms that “delegate power, improve regulation, and upgrade services”, and strengthen the synergy, coordination and efficiency in advancing the reforms.

(Source: CCPIT/www.chinatradenews)

Our Leadership

Zhang Yongming Chairman ...

History and Growth

Promoting international trade, promoting utilization of foreign investment, prom...

About the CCPIT Beijing

CCPIT Beijing, a foreign economic and trade organization composed of representat...