New zones will help with more balanced development, experts say

Northwest China's Shaanxi and Gansu provinces as well as Central China's Hubei Province are applying to join the third batch of free trade zones (FTZs), media reports said Thursday, after the State Council approved three FTZs in coastal areas earlier this month.

Shaanxi authorities plan to set up an FTZ in the provincial capital of Xi'an, and have already submitted their plan to the State-level authorities, financial news website aastocks.com reported Thursday, citing an unnamed official from the Shaanxi Provincial Development and Reform Commission.

The Xi'an FTZ will include the Xi'an International Logistics and Trade Park, the Airport New City in Xixian New Area and the Xi'an Hi-tech Industries Development Zone, the official said.

Calls to the provincial commission went unanswered on Thursday by press time. But the local authorities had already planned to apply for an FTZ, according to the provincial government's work report for 2014, which was delivered during the second session of the 12th Shaanxi Provincial People's Congress on January 14.

Xi'an is competing with other western cities including Lanzhou, capital of Gansu Province, Chongqing and Chengdu, as well as cities in Central China such as Wuhan, which have also reportedly applied to set up FTZs.

Gansu authorities are speeding up efforts to draft a plan for an FTZ, the aastocks.com report said, citing a source within the Gansu provincial government.

The Gansu FTZ will be centered on the Lanzhou New Area, the fifth national-level new area in China, and a bonded area in Wuwei, a city around 280 kilometers from Lanzhou, will serve as a manufacturing base for the FTZ, the report said.

The Hubei provincial government held a press conference on Tuesday, during which it announced a batch of measures based on experiences from the Shanghai FTZ, including new administrative approval procedures and ways to facilitate foreign exchange services.

"The competition is fierce, as any of the cities that get approval [from the State Council] will be the first city in western or central China to have an FTZ," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times Thursday.

The China (Shanghai) Pilot Free Trade Zone, the first of its kind in the Chinese mainland, was launched on September 29, 2013. The State Council announced on December 12 this year that it had approved the establishment of another three FTZs in South China's Guangdong Province, East China's Fujian Province and North China's Tianjin Municipality.

Bai said the next batch of FTZs will be complementary to the existing and newly approved ones, and will help the country achieve more balanced development among the eastern, central and western regions.

China's western provinces and regions have reported higher GDP growth rates than their eastern counterparts in the past few years, but still lag far behind in terms of GDP value.

"The One Belt and One Road initiative, the coordinated development of the Beijing-Tianjin-Hebei region, and the Yangtze River economic belt are the three most important regional development strategies in China, so approving FTZs in these regions will be helpful for the implementation of these strategies," Zhang Baotong, a research fellow with the Shaanxi Provincial Academy of Social Sciences, told the Global Times Thursday.

China aims to build a Silk Roadeconomic belt to boost cooperation with Central Asian and European countries. The proposed economic belt covers more than 40 countries and regions and is inhabited by around 3 billion people.

Xi'an is the starting point of the ancient Silk Road, and Lanzhou is also a key point along the road. Experts believe Xi'an's FTZ proposal is very likely to gain approval, given the city's strategic geographical importance and industrial advantages.

"In the past, foreign merchants who arrived in Chang'an (the ancient name for Xi'an) were fascinated by silk, tea and china in the city," Zhang said. "Today Xi'an also has a lot to offer, such as high-tech products and machinery equipment."