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China “Opening Up” With All-New Free Trade Reforms in its Economic Zones
China’s opening to the outside world will start a new journey of mass development, trade, and technological advancement.
On December 31, 2019, the “Regulations for the Implementation of the Foreign Investment Law” were promulgated in full, and they were implemented simultaneously with many important laws and regulations such as the “Foreign Investment Law” and “Judicial Interpretation of Foreign Investment Law” on January 1, 2020, and together constituted An important support for China’s legalized business environment.
On this basis, China is still considering more measures for opening up and upgrading. Reports have informed that China will continue to remove partners from the “blacklist”, white-list new trading partners, and further expand market access.
It is worth noting that the Pilot Free Trade Zone and the Free Trade Port, as the frontiers of the entire opening-up process, are accelerating the trade opportunities, paving the way for more open measures to be explored.
Internationalized China
With the successful implementation of a series of opening-up measures, it has effectively stabilized foreign investor confidence and expectations and effectively guaranteed the achievement of the long-term goal of stabilizing foreign investment throughout the year.
Zong Changqing said that according to statistics, from January to November 2019, the actual use of foreign capital in the country was 845.94 billion yuan, a year-on-year increase of 6.0%, and it is expected that the annual increase in yuan will be about 5%.
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Among them, there were 722 large projects of more than 100 million US dollars, an increase of 15.5%.
It is worth noting that the results of the Pilot Free Trade Zone are particularly remarkable. According to Tang Wenhong, Director of the Port Division of the Free Trade Zone of the Ministry of Commerce, from January to October 2019, approximately 217,000 new enterprises and 5,123 foreign-funded enterprises were established in the original 12 free-trade pilot zones.
New Foreign Capital
The foreign capital actually used was 108.39 billion yuan. A total of 3.2 trillion yuan. “With less than four-thousandths of the country’s land area, 14.4% of the country’s foreign investment and 12.5% of the country’s imports and exports have been realized, which has made a positive contribution to stabilizing foreign trade and foreign investment.” Tang Wenhong said.
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“At present, China is shifting from the flow of goods and factors open type open type system rules, pay more attention to institutional and structural arrangements,”
President of China (Hainan) Reform and Development Research Institute Chi Fu forest on reporter said, in order to push the new type of system, it is necessary to take the creation of a market-oriented, rule-of-law, and international business environment as an important guide for government reforms.
Conclusion
Chi Fulin pointed out that in recent years, China’s business environment has improved significantly, and its global ranking has risen significantly. However, there are still large gaps between some indicators in China and the international advanced level.
To promote the institutional opening, we need to benchmark the international advanced level in the business environment and further make up for the shortcomings.
For example, the focus is on reducing taxation and fee reductions to reduce institutional transaction costs, further reducing or canceling various fees; fully implementing the enterprise’s independent registration system and simple cancellation system, eliminating the filing system for general investment projects of enterprises, and comprehensively implementing “up to one run”.
For more info on Free Trade Zones in China and how they work, contact us here.