Xia Xingyu asked his parents to buy him a German camera but was refused. It’s expensive. Then the 17-year-old from Anhui was told to wait, until the province’s first free trade zone (FTZ) is set up. Buying the camera there will cost much less, he hopes.
Like Xia, more people’s need for cheaper foreign products and services could soon be met.
On Sept 21, China released plans for three new pilot FTZs and an expanded one. The three new FTZs are in Beijing, Anhui and Hunan, while the expanded one is in Zhejiang. This will increase the total number of the country’s FTZs to 21.
The FTZ is a special designated area where normal trade barriers, such as tariffs, are removed. FTZs not only help companies save money, but favorable policies, like tax benefits, help attract new business and foreign investment.
Building FTZs is an important part of China’s strategy to further develop the nation. Since the first FTZ was set up in 2013, this effort has proven fruitful. Even amid an economic downturn this year, China’s pilot FTZs attracted robust foreign investment and trade in the first seven months. During this period, these FTZs reported an actual use of foreign investment of over 90 billion yuan, according to the Global Times.
Generally, FTZs are organized around seaports and international airports. All of the businesses located in FTZs, such as stores and restaurants, benefit from the policies. For example, the price of an imported car sold in an FTZ is nearly 30 percent cheaper than the market price, according to Xinhua. In addition, FTZs can offer better medical services in foreign-funded hospitals. These areas will also open up more job opportunities in foreign-funded companies.
Establishing more FTZs “shows that China hopes to promote a higher-level opening-up”, said Zhou Mi from the Ministry of Commerce.
From the coastal areas to the central inland regions, each of the three new FTZs has its own strategic development goals.
For instance, the Beijing pilot FTZ will focus on trade in services and include a pilot area for the digital economy. Hunan’s FTZ aims to build a world-class advanced manufacturing hub. The pilot FTZ in Anhui will promote more scientific and technological innovation.
Moreover, combined with its geographic advantage, Hunan’s FTZ plays an important role in the trade corridor linking the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao Greater Bay Area, while Anhui’s FTZ will promote the development of the Yangtze River Delta.
(Translator & Editor: Wang Xingwei AND Luo Sitian)