Impressive 5-year results at city's FTZ

The construction of Shanghai’s pilot free trade zone was a strategic measure taken by the Communist Party of China’s central leadership to promote reform and opening-up in the new era, according to Chinese President Xi Jinping.

It was a milestone in the process of reform and opening-up, Xi said on the occasion of the fifth anniversary of the establishment of the China (Shanghai) Pilot Free Trade Zone, the country’s first free trade experimental zone.

In a speech, Xi urged constant improvement in the development of the Shanghai free trade zone, and the formation of more replicable achievements of institutional innovation to build the zone into a highland of reform and opening-up.

Development of the zone should involve breaking away from traditional concepts, outdated models and interests, while further improving the relationship between government and the market, solving deep-seated contradictions and structural problems, and accumulating more experience and institutional innovations that can be replicated throughout the country, Xi said.

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Forty years after reform and opening-up began, the development of productive forces requires the adjustment and change of production relations and top structures, he said.

Free trade zones deepen reform by liberalizing and developing social productive forces by adjusting links and aspects in production relations that do not adapt to productive forces and in a top structure that does not adapt to economic foundations, Xi added.

The Shanghai free trade zone had achieved fruitful results by taking bold steps in institutional innovation. Pre-entry national treatment with a negative list has become a “new norm” in the free trade zone’s investment management since 2013.

Hence, the free trade zones established a high-standard trade facilitation regulation system and tested a comprehensive regulatory system with credit supervision and information sharing, which greatly narrowed the gap with prevailing international rules.

In the past five years, the Shanghai free trade zone had pioneered new approaches by initiating the first negative list throughout the country, promoting the reform of foreign capital management, taking the lead in the test run of separating business licenses and other certificates, establishing a “single window” for foreign trade to make customs clearance more efficient, launching free trade accounts, promoting further macro-prudential management of finance and the market-oriented reform of foreign currency deposit interest rates.

At the same time, the spillover effect of policies practiced in the free trade zones constantly emerge. By the end of May, 153 replicable achievements of reform and innovation had been formed in the free trade zones as demonstrations for nationwide application.

In addition, experience gained from the daily practice of free trade zones is to be promoted in the provinces and cities which have them, which is good to deepen reform throughout the country.

At present, the task of deepening reform in an all-round way has not been completed, and the potential of economic system reform has not been fully released, Xi said.

The pilot zones should further improve their development and form more replicable institutional innovations.

It is a must to adhere to prevailing international rules and accelerate the formation of a basic system and a regulatory model linking to international investment and prevailing trade rules to give full play to the decisive role of the market in the allocation of resources and better play the role of government, Xi said.

In the past five years, the Shanghai free trade zone had pioneered new approaches by initiating the first negative list throughout the country, promoting the reform of foreign capital management, taking the lead in the test run of separating business licenses and other certificates, establishing a “single window” for foreign trade to make customs clearance more efficient, launching free trade accounts, promoting further macro-prudential management of finance and the market-oriented reform of foreign currency deposit interest rates.

Free trade zones have promoted three batches of temporary adjustments to 94 articles of relevant administrative regulations, State Council documents and department rules and regulations approved by the State Council, involving 35 articles and 130 specific articles of relevant administrative regulations, State Council documents and department rules and regulations approved by the State Council.

At the frontline of opening up, the “Special Administrative Measures (Negative List) for Foreign Investment Access to Pilot Free Trade Zones (2018 Version)” sets out industries where foreign investment is limited or prohibited in the free trade zones, with the number of items down to 45 from 190 in 2013.

In 2017, the first three batches of 11 free trade zones used 103.9 billion yuan (US$15 billion) of foreign capital, an increase of 18.1 percent over the same period a year ago, which was 10 percentage points higher than the national growth rate.

The free trade zones also serve the Belt and Road Initiative, promoting the coordination between the inland and coastal areas to form a new pattern of comprehensive opening-up.