Since the 18th National Congress of the Communist Party of China, China has approved the establishment of 21 free trade pilot zones in batches, forming a wild goose array type free trade pilot zone layout that covers the east, west, north, south, north, middle, widely distributed and has different characteristics
In 2021, 21 free trade zones in China will contribute 17.3% of the country's import and export volume and 18.5% of foreign investment with less than 4% of the country's land area
In the future, it is necessary to further strengthen the role of the free trade zone in building a new development pattern, take digital reform as the starting point, optimize the business environment, focus on the integration of the free trade zone construction and international rules, and promote the deep development of the free trade zone
Article | Li Lei
Since the 18th National Congress of the Communist Party of China (CPC), in order to promote the construction of a new pattern of opening up to the outside world at a higher level, China has approved the establishment of 21 free trade pilot zones (referred to as free trade zones) in batches, forming a wide spread and distinctive free trade zone layout covering the east, west, north, south, and middle.
Since its establishment in 2013, the Free Trade Zone has been developing vigorously. It has made a lot of exploration, accumulated experience, and achieved results in gathering high-quality global factor resources, promoting trade and investment facilitation, cultivating innovation capabilities, and transforming government functions. It has become an important strategic measure for China to promote reform and opening up in the new era.
In the future, according to the task requirements of the new development stage, the Free Trade Zone will fully implement the new development concept, serve to build a new development pattern, explore a higher level of opening up mode and institutional arrangements, promote comprehensive deepening of reform, and promote high-quality economic development.
The construction of the free trade zone dare to be the first in the world
The top-level design is deployed to build a free trade zone. The 18th National Congress of the Communist Party of China clearly proposed that China should speed up the implementation of the free trade zone strategy. The construction of the free trade zone is an important part of this strategy. Its strategic positioning is to build a new highland of reform and opening up in the new era. The path is to give the free trade zone greater reform autonomy, bold experiments, and continuous summaries, and accelerate the formation of an institutional system and regulatory model that are linked with the prevailing rules of international trade and investment, so as to facilitate smooth and ensure safe and controllable.
The Free Trade Zone aims to promote China's opening up to the outside world at a higher level, make greater efforts to reform the system and build a more perfect system by virtue of the first trial and experience promotion and replication. The construction of a free trade zone is a major measure put forward by the Party Central Committee to promote reform and opening up in the new situation. It emphasizes the need to boldly explore, experiment and reform independently, form a batch of new systems that can be replicated and promoted as soon as possible, and accelerate the first batch of effective and effective achievements in promoting investment and trade facilitation, efficient and convenient supervision, and standardized legal environment.
Starting from the coastal areas, a pattern of innovation and development of the free trade zone covering the east, west, north, south and north has been formed in steady progress. In September 2013, China (Shanghai) Pilot Free Trade Zone was officially launched, which is the first free trade zone in China.
After the initial pilot success of the Shanghai Free Trade Zone in East China, the central government made two important decisions in April 2015. One is to expand the Shanghai Free Trade Zone, expand its geographical coverage and give it the function of driving the opening up and development of the Yangtze River Delta region; The second is to approve the establishment of China (Guangdong) Pilot Free Trade Zone in South China and endow it with the function of promoting the joint development of Guangdong, Hong Kong and Macao Greater Bay Area, approve the establishment of China (Tianjin) Pilot Free Trade Zone in North China and endow it with the function of assisting the integrated and coordinated development of Beijing, Tianjin and Hebei, and approve the establishment of China (Fujian) Pilot Free Trade Zone in Southeast China and endow it with the function of promoting cross-strait economic exchanges and development.
As a result, the Free Trade Zone is located in four major regions, namely, East China, South China, North China and Southeast China. The four major free trade zones keep abreast of each other and have their own characteristics. In 2017, the central government further approved the establishment of new free trade zones in the northeast, central, southwest and northwest regions, and added a new free trade zone in East China, significantly expanding its coverage.
From 2018 to 2020, the pace of newly established free trade zones will be accelerated. There will be 10 new free trade zones nationwide, with a total of 21, and two free trade zones in East China will be expanded. The pace of the establishment of free trade zones has been accelerated, the density has increased, and the comprehensive strength has been enhanced. The free trade zones have spread all over the major economic regions of the country, forming a clear layout of free trade zones in the form of a wild goose array.
Dare to be the first in the world, and promote economic development in system innovation and promotion. The Free Trade Zone adheres to the orientation of pilot field, explores a higher level of opening to the outside world with bold and careful first try, and injects new vitality into regional development. With the help of the park's extensive domestic and international industrial chain supply chain links, it will drive regional and national economic growth, promote the deep integration of China's economy with surrounding countries and regions, and promote the stability and growth of China's and the global economy.
In the process of construction, the Free Trade Zone insists on taking system innovation as the core content, accumulates the experience of system innovation in expanding opening up and deepening reform in experiments, applies it to other existing and newly established free trade zones, and replicates and promotes it to other regions of the country outside the Free Trade Zone. We will promote the cause of reform and opening up in the sharing and replication of institutional innovation achievements and regional linkage development, and promote the establishment of China's new economic governance system and the high-quality development of the national economy.
Release system dividend
Form reproducible innovation achievements. In the past decade, each trade zone has aimed at the requirements of reform and opening up in the new era, stimulated innovation vitality with system highlands, and created thousands of system innovation achievements, including 278 system innovation achievements that have been promoted at the national level. The system dividend has been released in a larger scope, creating an increasingly dynamic ecological environment for China to build a new pattern of higher level opening up and achieve high-quality development of an open economy.
In terms of trade convenience, the "single window" system of international trade in the Free Trade Zone gradually covers customs, taxation and other regulatory departments, as well as goods declaration, inspection and quarantine and other links. It saves customs clearance time and reduces trade costs. The level of trade facilitation exceeds the requirements of the WTO Agreement on Trade Facilitation, and it has world-class service capabilities.
In the field of foreign investment, we promoted the introduction of the negative list system in the Foreign Investment Law of the People's Republic of China and spread it throughout the country. The management of foreign investment has achieved historic changes. In 2013, the Shanghai Free Trade Zone took the lead in implementing the negative list of foreign investment access. Except for the 190 items listed in the list, other investment projects belong to general investment and can be operated after filing without further approval procedures. The Catalogue for the Guidance of Foreign Investment Industries (Revised in 2017), implemented on July 28, 2017, clearly stipulates the implementation of special management measures for foreign investment access, marking that the negative list system explored by the Free Trade Zone has taken root nationwide.
In the field of cross-border service trade, in view of the increasing trend of service trade growth in recent years, the Ministry of Commerce, together with the People's Government of Hainan Province and 45 relevant departments, released China's first national level negative list of cross-border service trade - Hainan Free Trade Port Special Administrative Measures for Cross border Service Trade (Negative List) (2021 Edition), which lists 70 special management items, For areas not included in the list, in Hainan Free Trade Port, foreign investors and domestic investors enjoy the same treatment. This marks a major breakthrough in China's service trade management mode, increased openness and transparency, and increased liberalization of service trade, which has improved China's overall level of openness.
In the field of financial support to the real economy, the Free Trade Zone has established a new financial management system that is highly integrated with the international financial market and limited isolated from other domestic markets in the form of account segmentation, simplified the investment and financing process, and promoted relevant institutional innovation in capital account convertibility, financial service opening, etc.
Contribute to economic growth. In 2021, 21 free trade zones in China will contribute 17.3% of the country's import and export volume and 18.5% of foreign investment with less than 4% of the country's land area; The annual import and export volume of the Free Trade Zone increased by 29.5%, 8.1 percentage points higher than the national level, and the utilization of foreign capital increased by 19%, 4.1 percentage points higher than the national level. In the first half of 2022, the Free Trade Zone will continue to maintain a good momentum, with the actual use of foreign capital of 119.85 billion yuan, up 16.8%.
We will deepen reform. The Free Trade Zone is a more open and more market dynamic trade park. It also promotes the expansion of opening up and deepening of reform throughout the country in the process of replicating the achievements of institutional innovation, which optimizes China's overall business environment, improves the legal and regulatory system, makes trade and investment more free and convenient, makes government services more efficient, and makes market mechanisms play a more full role.
Drive regional development. The Free Trade Zone covers all the economic regions in the east, west, north, south, and north of the country, forming a pattern of multi-point concurrence and point to area, driving the economic growth of various regions in China, and promoting the coordinated development among regions. For example, the establishment and construction of free trade zones in Shanghai, Zhejiang, Jiangsu and Anhui have promoted the development of the Yangtze River Delta. The Guangdong Free Trade Zone has played an important role in promoting the coordinated development of the Guangdong Hong Kong Macao Greater Bay Area, improving the level of institutional opening of the Guangdong Hong Kong Macao Greater Bay Area, and promoting the upgrading of the industry and consumption of the Greater Bay Area.
Promote regional industrial clusters. The Free Trade Zone promotes the flow of innovation resources and innovation subjects nationwide and globally by institutional innovation, and forms multiple industrial clusters supported by resource advantages, industrial foundation advantages and industrial support policies, such as the biopharmaceutical industrial cluster in Beijing Free Trade Zone, the modern agricultural industrial cluster in Shaanxi Free Trade Zone, and the cultural industrial cluster in Shandong Free Trade Zone.
Assist in the negotiation and implementation of foreign free trade agreements. In the past decade, China has also made remarkable progress in establishing multilateral and bilateral free trade zones with other countries and regions. In this process, the experience of the Free Trade Zone has played an important role. Over the years, China has introduced the difficulties and focuses that may be encountered in the negotiation of multilateral and bilateral free trade zones into the free trade zones for pilot projects, seeking effective cooperation methods, exploring open models, establishing risk awareness and forming a knowledge system to prevent and resolve risks, so as to provide practical experience for promoting the negotiation of free trade agreements and the construction of free trade zones.
On the production line of the Great Wall of China (Heilongjiang) Netcom Supporting Guarantee System Project located in Harbin area of China (Heilongjiang) Pilot Free Trade Zone, workers are conducting product testing (photographed on November 13, 2020)
Sail on a new journey
Strengthen the role of the free trade zone in building a new development pattern. As a big trading country, China is in the critical period of becoming a strong trading country. Improving the level of opening up is the only way to achieve transformation. Promoting high-level opening up is more important for building a new development pattern.
To promote the high-quality development of the Free Trade Zone, on the one hand, it is necessary to smooth the domestic circulation and get through all links of production, distribution, circulation and consumption.
In terms of production, the free trade zone provides more convenient and standardized new channels for goods, investment and services from other countries and regions to enter China's market, making up for domestic production needs; From the perspective of distribution, the free trade zone is empowered by innovation and accelerates the process of new industrialization and urbanization in China through institutional and technological innovation; In terms of circulation, the Free Trade Zone further highlights regional coordination; From the perspective of consumption, we can make use of the advantages of the Free Trade Zone in terms of price and technology to provide high-quality supply and better meet the people's aspirations for a better life
On the other hand, the high-quality development of the Free Trade Zone has created new conditions for Chinese enterprises to go to overseas markets and participate in international cooperation extensively. It is a new carrier and an important hub for achieving domestic and international double circulation. With this as the guideline, in the future, whether the upgrading of the existing 21 free trade zones or the establishment of new free trade zones, they will become the key to widely connect various domestic and international industrial chains and promote their deep integration, and become an important power source to promote the efficient and resilient operation of the dual cycle system.
Take digital reform as the starting point to promote the free trade zone to develop in depth. In recent years, China's digital economy has made rapid progress, driving the vigorous development of digital trade. In the "Fourteenth Five Year Plan" for High Quality Development of Foreign Trade, "enhancing the level of trade digitalization" is clearly included in one of the ten key tasks of foreign trade development.
The Report on the Development and Cooperation of Digital Trade 2022 points out that as a result of the deep integration of digital technology and international trade, digital trade is becoming an important link for the opening and cooperation of the global digital economy, effectively promoting digital technology innovation and industrial digital transformation.
It can be seen that the digital transformation of trade has become a trend. In recent years, in the face of the complex and changing international market environment and the changing needs of global customers, trade digitalization has become the key to deal with the unprecedented changes in the world in a century. As the experimental field of the system and mechanism and the pioneer of the opening up, the free trade zone should play a leading role in the digitization of trade.
On the one hand, while the global regulation of digital trade has not yet taken shape, exploring the establishment of global digital trade rules and standards is an important starting point to promote innovative development and enhance international market competitiveness. On the other hand, we should coordinate the orderly, safe and free cross-border flow of data, handle the relationship between the free flow of data and data security supervision, and ensure information security and consumer privacy. In the Free Trade Zone, for the difficult problems in data management in China, we will carry out local policy pilot and technology application pilot, explore the hierarchical and classified management of data, establish a data security review mechanism and trust mechanism, and build a security channel for cross-border data flow.
Continuously optimize the business environment of the Free Trade Zone. Improving the business environment is a gradual process. Different regions have different economic bases and different promotion speeds. For the free trade zone with the highest level of openness, we can first create a more favorable small environment to explore the way to build a new open economic system.
After years of practice, China's free trade zones have continuously made efforts to optimize the business environment. Benchmarking the highest level at home and abroad, the business environment of the Free Trade Zone still has room for improvement. It is necessary to further streamline administration and delegate power, strengthen follow-up supervision and services, improve the assessment methods for the construction of the government credit system, strengthen the construction of an honest government, build a professional business service team, cultivate international talents, and establish a talent management system. In addition, the free trade zone needs to be customized professionally, inject local cultural background into the business environment construction process, and improve the attraction of the free trade zone with characteristics.
Integrate with international rules and accelerate the construction of bilateral and multilateral free trade areas. The FTA and the construction of China's multilateral and bilateral free trade zones complement each other. Up to now, China has signed 19 free trade agreements with 26 countries and regions, with free trade partners covering Asia, Oceania, Latin America, Europe and Africa. The Regional Comprehensive Economic Partnership Agreement (RCEP) has officially entered into force on January 1, 2022, which means that China's participation in the world's most populous and largest free trade area has officially landed.
In the future, we will promote high-level opening up and steadily expand the institutional opening up of rules, regulations, management, standards, etc. China needs to continue to promote the construction of more high-level multilateral and bilateral free trade zones, and gradually establish a network of high standard free trade zones based on the surrounding areas, radiating the "the Belt and Road" and facing the world. Give full play to the pilot role of the Free Trade Zone, and better serve the negotiation, signing and implementation of agreements of multilateral and bilateral free trade zones.
