Free trade zones to take up reforms in key areas

Yangpu international container port at Yangpu economic development zone in South China's Hainan province. [Photo/IC]

China's pilot free trade zones and the Hainan Free Trade Port are expected to adopt deeper reforms and conduct more systematic trials in key and frontier areas, such as the services industry, according to experts and government officials.

That will facilitate the country's deepening reform and expanding high-standard opening-up, and eventually add impetus to both Chinese and global economic recovery, they said.

Guo Tingting, vice-minister of commerce, said at a recent news conference that China will intensify stress testing in the FTZs and at the Hainan FTP to accumulate experience and explore pathways for reforms in related fields.

Since the China (Shanghai) Pilot Free Trade Zone was established in 2013, the country has set up 21 FTZs. Efforts have been made to achieve an islandwide, independent customs clearance operation in the Hainan FTP by the end of 2025, after the construction of the FTP began in 2020.

"The FTZs and the Hainan FTP are facing higher expectations from the central leadership as a test field for reform and opening-up," said Huo Jianguo, vice-chairman of the China Society for World Trade Organization Studies.

"The FTZs are likely to accelerate opening-up of industries, including telecommunications, insurance and e-commerce, while the Hainan FTP is expected to make bolder trials on increasing openness in the services industry, including senior care, audits and professional designing," he said.

According to Gu Xueming, president of the Beijing-based Chinese Academy of International Trade and Economic Cooperation, more institutional innovations that can be replicated nationwide with remarkable results are expected from the FTZs and the Hainan FTP.

"The FTZs must scale up institutional innovations and accumulate experience on both transforming government functions and aligning with high-level international economic and trade rules," he said.

The FTZs are also expected to strengthen institutional innovations to increase the openness of the whole industrial chain in the key industrial areas for local regions and add impetus to the high-quality development of China's open economy, he said.

With a series of institutional innovations in trade, investment and industrial development, the FTZs have established a more open and energetic system of policies to become an important platform for opening-up, according to a recent report by the Chinese Academy of International Trade and Economic Cooperation. The Hainan FTP has also made noticeable progress in trade and investment liberalization and facilitation, another report by the academy said.

The FTZs and the Hainan FTP are also expected to make more efforts in fostering world-class industrial clusters in fields such as modern logistics, biotechnology and new materials, experts said.

Guo, the vice-minister, said the FTZs and the Hainan FTP are encouraged to carry out differentiated exploration to advance the open and innovative development of industrial chains.

Wu Xiaohua, an official with the Lingang Special Area of the pilot FTZ in Shanghai, said that Lingang has introduced more than 200 integrated circuit projects in the past three years, with relevant investment totaling 240 billion yuan ($35 billion) to form the most complete integrated circuit industrial chain in China.