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After 9 years, has the expectation behind the naming of Shanghai Free Trade Zone come true?

2022-11-23 16:568610

On April 24, 1992, on the "Advertising Page" of Jiefang Daily, an enterprise named Shanghai Waigaoqiao Free Trade Zone Joint Development Co., Ltd. issued a notice on the registration of foreign-funded enterprises as legal persons. In the announcement, the words "bonded area" in the company's name were translated into "free trade zone", which literally means free trade zone.


However, the bonded area at that time was not equal to the international free trade zone. This is a new term with Chinese characteristics. The connotation behind it is the "three freedoms" policy granted by the central government at that time: freedom of trade, freedom of currency and freedom of goods import and export.  The then municipal leader said, "There is no bonded area in the world, only a bonded warehouse. If you use a bonded area, it is a bonded zone. Foreigners can't understand it."


Therefore, in all documents and news related to Waigaoqiao, the Chinese name was "Bonded Area" and the English name was "shanghai waigaoqiao free trade zone".


Twenty one years later, on September 29, 2013, the China (Shanghai) Pilot Free Trade Zone was inaugurated. The translation of "free trade zone" was still used, but its essence had undergone a fundamental change in the historical evolution.


If we can sum up this change in one sentence, it is that the door of China's opening up is getting bigger and bigger, and China's determination to realize Chinese path to modernization in the process of opening up is becoming more and more firm.




Openness multiplies the volume


Today, the Shanghai Free Trade Zone is celebrating its ninth anniversary. In contrast to the construction of Pudong leading area and the new area adjacent to the port, the Shanghai Free Trade Zone is a little low-key. The outside world also has doubts: what is the Free Trade Zone doing? What has the Free Trade Zone done?


However, when we put this period of time into a longer history to observe, the answer will appear.


After the establishment of Waigaoqiao Free Trade Zone in 1990, it soon became the most open and free trade area in China. Under the logic of "big growth", the bonded area has fully enjoyed the dividend of opening up all the way. From 1990 to 2000, the average growth rate of the total gdp of pudong new area reached more than 20%; Until the eve of the establishment of the Free Trade Zone, the growth rate remained at a high of 13%.


"Without the previous open foundation, the free trade zone in 2013 might not have been established. The Shanghai Free Trade Zone emerged as a concrete carrier for China's integration into the world." Xu Jian, president of the Shanghai Pudong Reform and Development Research Institute, said.


Entering the era of free trade zone, China has opened the door to a prosperous market to the world. Soon, in the Shanghai Free Trade Zone, China's first foreign-funded vocational skills training institution, the first foreign-funded international ship management company, the first foreign-funded medical institution, and the first foreign-funded engineering design company have emerged, and new business forms and new things have sprung up like mushrooms.


In just five years, the number of newly established enterprises in Shanghai Free Trade Zone has exceeded 55000, which is 1.5 times of the number of enterprises in the same region in the previous 20 years. With 1/50 of the area of Shanghai, the Shanghai Free Trade Zone has created 1/4 of the city's GDP and 2/5 of the total trade volume. In 2017, when global trade picked up, Shanghai, led by the construction of a free trade zone, entered a new stage of economic aggregate in the process of opening up.


"It can be said that since then, the Free Trade Zone has not only been an open carrier, but also a brand promoting development through openness, representing a new concept of development." Xu Jian thinks.




Gradual shift of development logic


Since then, the development of the Free Trade Zone has entered a new stage of "bold innovation and exploration" and "accumulating more replicable and replicable experience for the whole country".


This "newness" is not only reflected in opening up new spaces and carrying new missions. Looking back on the history of Shanghai in the past five years, it is not difficult to find that it was precisely in 2018 that Shanghai proposed to "improve the city's energy level and core competitiveness". With the implementation of the new zone, the Shanghai Free Trade Zone has realized the core development logic transformation from "big growth" to "strengthening functions".


After 2018, we seldom evaluate the effectiveness of the free trade zone by hard indicators such as "how many market players have been added" and "how many industries have been opened up", instead, we focus on how to "strengthen the function and concentrate the radiation effect".


The full name of goi is Pudong Large Enterprise Open Innovation Center. Since Pudong launched the "Large Enterprise Open Innovation Center Plan" last year, 47 heavyweight enterprises such as BASF, Lenovo and Nokia Bell have joined, providing innovation and entrepreneurship services and resources for more than 2000 science and technology innovation enterprises.


atlatl, an open innovation platform for biomedical research, first completed the ecological construction of the whole process from early drug discovery to preclinical research in Zhangjiang, and then laid out a transformation platform from drug discovery to clinical research in the port, greatly reducing the cost of biomedical innovation. Nowadays, more and more innovative enterprises and projects are developing in Zhangjiang and near the port like magnets. This is the multiplier effect of urban functions.


Singapore's "father of planning" Liu Taige once said in an interview: "It is difficult to do a good job in urban functions, even if you want to be internationalized."  Singapore has taken a path to build world-class functions and drive all-round economic and social development. And the Shanghai Free Trade Zone is also really stepping into higher quality development in the process of constantly complementing the urban functions and constantly rising the urban energy level.


Practice of Chinese path to modernization


Opening up is a distinctive symbol of contemporary China. In fact, since the establishment of the Shanghai Free Trade Zone, a set of opening measures that follow the market logic and closely connect with global economic and trade rules has been steadily advancing.


Since 2013, the reform of Shanghai Free Trade Zone has focused on trade facilitation, including the negative list of foreign investment, the "single window" of international trade, and the free trade account. The reform aims to build a replicable and promotable open structure, so that global enterprises and capital can set up camp in China's free trade zone.


In particular, when the negative list was introduced, the Shanghai Free Trade Zone took the lead in adopting the negative list rules, so that foreign investors outside the list could enjoy the same treatment as Chinese investors, under the condition that all domestic and foreign capital access was subject to prior approval without exception. Over the past nine years, this list has become shorter and shorter, from the first 190 to more than 30 last year. More than 12000 foreign-funded enterprises have set up in the zone. At the same time, this major reform was written into China's Foreign Investment Law from the pilot project in Shanghai.


On the way to opening up, Shanghai gradually raised the issue of optimizing the business environment, and continued to explore the relationship between the government and the market with the Free Trade Zone as the nursery and the reform as the opportunity.


In 2015, the Shanghai Free Trade Zone took the lead in the country in making the change of "license before certification", that is, an enterprise can engage in general production and operation activities as long as it receives its business license from the industry and commerce and market supervision departments, which solves the problem of difficult establishment.


Later, the pilot reform of "separation of license and certificate" solved the problems of enterprises' difficulty in obtaining license and being denied access to business.  In the future, "one industry, one license" was introduced, and multiple licenses required for one industry access were integrated into one industry comprehensive license, which solved the problem of administrative cost.


After the release of the Opinions on Supporting the High level Reform and Opening up of Pudong New Area to Build a Leading Area for Socialist Modernization last year, the first "Pudong New Area Regulation" was formally adopted and proposed the "single track system of comprehensive licensing" and the "unified period of validity of industrial comprehensive licenses", which directly hit the pain points in the previous "one industry, one license" pilot and further promoted the reform.


One photo, one certificate and two small pieces of paper reflect the essence of the concept of the Shanghai Free Trade Zone: to make it simple, efficient and free for global enterprises and entities to do business in China. The outside world has gradually understood the practical path of Chinese path to modernization from the growth of the Free Trade Zone.


Today's Waigaoqiao District of Shanghai Free Trade Zone no longer completely depends on traditional industries such as trade logistics. Biomedical, one of the six "hard core industries" in Pudong New Area, forms a service supply of the whole industry chain here; The layout of the world's largest bonded warehouse for artworks has made Waigaoqiao another hub for the entry and exit of artworks in the world. The future Shanghai Free Trade Zone is expected to be further integrated into the new development pattern of system integration, coordination and efficiency in the exploration of institutional openness under the framework of "leading zone".


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