anyhow free trade zones in china have become smart way to offer win-wins between particular sectors and particular twin cities/nations
april 2017 china has added 7 new free trade zones (to 4 original ones)
The following details have been released explaining why each FTZ has been chosen:
- Liaoning: reignite the competitiveness of northeast China’s traditional industries consequently opening up new sectors for foreign investment.
- Zhejiang: improve the construction of Zhoushan Free Trade Port as well as encourage commodity trade liberalisation.
- Henan: establish a modern three dimensional traffic system and modern logistics system meaning Henan will become a key location along China’s ‘One Belt One Road’ connection.
- Hubei: hub for high-tech industrial bases focussing on the Yangtze River Economic Belt.
- Sichuan: gateway to China’s western inland areas.
- Shaanxi: facilitate the construction of the ‘One Belt One Road’ network.
- Chongqing: strategic position in enabling access to the west of China facilitating the region’s overall future development.
Free trade zones in China are a specific class of special economic zones; an area where goods may be landed, handled, manufactured and re-exported without intervention of the customs authority. China’s first Free Trade Zone opened in Shanghai in 2013 and was seen as a milestone in doing business in China. It replaced the previous “low-cost land policy” of the more traditional industrial zones and is used to try and explore policies for modernizing Chinese businesses. The FTZ should be seen as a blueprint of further reform throughout China. Unlike other types of SEZs, free-trade zones can experiment with financial models and attract investment. Free-trade zones are organized in areas with many geographical advantages for trade e.g. major seaports and international airports. After the opening in Shanghai, several other FTZ’s have been initiated in April 2015: Tianjin, Guangdong and Fujian. Each of the locations were not chosen randomly, but serve a specific purpose. Shanghai
Shanghai, in August 2013, was the first city to be given the opportunity to trial a free trade zone; with fewer restrictions it was hoped that it would bring more foreign investment into China and take the focus away from Hong Kong, where the government has less control.
Focus: international trade, financial services.
Tianjin is a major city only located 30 minutes south of Beijing. It has a harbor and a well developed industrial sector. However, the major reason that the Central Government chose Tianjin is for a future purpose: Jingjinji, also known as Beijing-Tianjin-Hebei. This region is emerging as the major northern metropolitan area, rivaling the Pearl River Delta and the Yangtze River Delta. It is the wish of the Government to combine these cities in terms of infrastructure, manufacturing / industry and R&D resources. For that reason, a huge airport in the center of Jingjinji has been planned: Beijing Daxing International Airport. Also, it is the only FTZ zone in Northern China. This will boost Tianjin’s in the China-Mongolia-Russia economic corridor.
Focus: Shipping, financial leasing and high-end manufacturing.
Guangdong has a distinct advantage: the geographic location. It has several major ports and is the Chinese gateway to both Hong Kong and Macau. China is pushing for the 21th century (maritime) silk road, and both Shanghai and Guangdong fit the start of this route perfectly. Guangdong is a leading industrial province, with a huge electronic R&D sector in Shenzhen.
Consequently, has been on top of GDP ranking of Chinese provinces for two decades. Moreover, this FTZ works on further integration of Mainland China with Hong Kong and Macau and exporting the huge number of products that has been produced in Southern China. Also, its purpose is to build a new financial cooperation system in the region.
Focus: Finance industry, customs clearance and maritime routes to Africa and Europe.
The Fuijan FTZ is located next to Xiamen, and will yield a lot of benefits linking to Taiwan. Nowadays, Fujian and Taiwan’s economies are very linked, resulting in a lot of economic interaction. It will promote free-flow of goods between Taiwan and Mainland China. Consequently, many benefits are for Taiwan entities. Examples are easier visa’s, encouraged construction projects and providing foreign bookkeeping services.
Furthermore, Fujian’s rich land and labor resources have a great advantage to labor intensive industries. Fujian’s specification is to create easy entry barriers to attract more Taiwanese companies. Its dual channel of loan business for both sides is also a special advantage for Xiamen.
Focus: Trade with Taiwan, production services and high-end service sector.
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