New free trade zones on track to pilot reforms
More than a year after the successful launch of the China (Shanghai) Pilot Free Trade Zone (FTZ), additional FTZs are preparing to open as China pursues reforms to invigorate the slowing economy.
(Editor: Leona)
More than a year after the successful launch of the China (Shanghai) Pilot Free Trade Zone (FTZ), additional FTZs are preparing to open as China pursues reforms to invigorate the slowing economy.
The Political Bureau of the Communist Party of China (CPC) Central Committee on Tuesday approved plans for three experimental FTZs in Guangdong, Tianjin and Fujian, signaling a countdown to their launch.
The Shanghai Securities News cited anonymous sources as saying the launch date for all three has been "basically" set for March 31.
Related shares rose across the board on Wednesday, with Tianjin Port Co up 4.26 percent to close at 21.8 yuan ($3.5) per share.
The move came more than a year after the launch of the Shanghai FTZ in September 2013 to test a broad range of economic reforms, including interest rate liberalization and fewer investment restrictions.
The three new FTZs are expected to tap their unique geographical and industrial strengths. Although the details of the plans are yet to be unveiled, analysts said the Guangdong FTZ will carry out programs for economic integration with Hong Kong, China and Macao. Fujian is expected to stress unified development with Taiwan, China, while Tianjin will focus on coordinated growth with Beijing and Hebei province.
FTZs are part of government efforts to test reform policies, especially in the service industry, to better integrate the economy with international practices in a landscape where China's old export-reliant model is no longer sustainable.
Dragged down by a housing slowdown, softening domestic demand and unsteady exports, China's economy logged its weakest annual expansion in 24 years in 2014. Authorities have dubbed the slower growth China's "new normal" and called for more opening-up policies to drive growth.
"China's previous round of opening-up centered on attracting foreign investment, technology and business orders, while the new round will focus more on going out to engage in international rule-setting," noted Zhang Guangnan, an expert with the Center For Studies of Hong Kong, China, Macao and Pearl River Delta at Sun Yat-Sen University.
The Guangdong FTZ will emphasize a more open and convenient set of international trade rules.
According to local authorities, the Guangdong FTZ has set up a service center for overseas investment to support domestic firms in going global.
Unwilling to be left behind, local governments have expressed a desire to ride the wave. During China's annual parliamentary session this year, regional delegates proposed inclusion among the next set of FTZs. They raised proposals for an FTZ along the Yangtze River in central China's Wuhan and an FTZ for the Silk Road Economic Belt in Shaanxi Province.
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