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China launches three more free trade zones

(Xinhua)    10:57, April 21, 2015

BEIJING, April 21  -- Operations formally kicked off Tuesday at three new free trade zones (FTZ), as China opens itself wider to the outside world.

The three new zones come 18 months after the first FTZ was unveiled in the financial hub of Shanghai, which was designed to showcase efforts to streamline the overloaded administrative approval system and encourage innovation and internationalization.

Officials expect the three new FTZs -- in Tianjin, Guangdong and Fujian -- will boost economic reform, promote trade and facilitate investment in new areas, as the world's second largest economy moves away from its unsustainable export-dependent model.

Some businesses have already felt the efficiency of the new zones.

Liu Qiya, the chief financial official with Tuwei Tongli Electrical Technology based in Xiamen, an open coastal city of Fujian, said his company was granted an operational license for the zone just three days after the application was submitted. The same procedure in other parts of the province could take weeks.

According to a detailed plan released on Monday, the new zones will be based on the Shanghai FTZ but with a focus on the potential of their geographical locations.

By its first anniversary, the Shanghai zone had seen nearly 12,000 registered enterprises lured by a better trade and investment environment.

The Tianjin zone aims to better integrate the northern municipality with Beijing and Hebei Province. It will prioritize modern service industries, including shipping, culture and equipment manufacturing.

The Guangdong zone will deepen economic cooperation between the mainland and the neighboring special administrative regions of Hong Kong and Macao. It will have three bases in the cities of Guangzhou, Shenzhen and Zhuhai.

The Fujian zone will focus on developing economic cooperation between the mainland and Taiwan. It will cover three areas in Xiamen, Fuzhou and Pingtan, a new industrial park targeting investment from Taiwan.

The Shanghai zone, which has been more than quadrupled in size since it was established, will continue to strive for "the greatest openness" to facilitate investment and trade with currency convertibility and a sound legal environment. It will also further open its service and manufacturing industries.

All zones must adhere to the negative list, which details 122 prohibited or restricted areas for foreign investment, ranging from Internet news service, production of radio and television programs to non-ferrous metal mining. This number has been reduced from 139.

Foreign investors will be subject to the same rules and regulations for new investment as domestic firms.

Experts believe that these fresh zones are strategically important for the "belt and road" initiative, which aims to better connect Asia, Europe and Africa, as a way to boost investment and consumption.

Shao Yu, Shanghai-based chief economist of the Orient Securities Co.,Ltd., said the four FTZs will be crucial "supporting points" for the belt and road initiative.

"More opening-up moves are needed in regions such as southwestern Yunnan and Tibet for the new strategic layout," he said.

Wang Shouwen, assistant minister of commerce, has said that the new zone will not just copy the Shanghai zone but also break fresh ground in areas such as the investment administration, trade regulation and financial systems.

The replication of successful reform measures is a common strategy in the reform and opening-up drive. The Shenzhen Special Economic Zone, founded in 1980, has been rolled out along the entire east coast over the past three decades.

That zone allowed foreign investment to develop the manufacturing industry, a driving force behind the economic boom of previous decades.

The FTZ fever has caught the attention of officials across the country, with many pushing for their regions to be included in the next batch of FTZs.

However, observers warned that the central government must ensure that the FTZs are used to pioneer reform measures, and that their policies are correctly implemented.

Dragged down by a housing downturn, softening domestic demand and unsteady exports, the once sizzling economy registered its lowest annual expansion in 24 years in 2014 and the weakness has continued into 2015.

Authorities have called for more opening-up policies to shore up development amid concerns of the slower growth, officially dubbed the "new normal."

Foreign business groups have said that the Shanghai zone brought improvements but they expected "more tangible benefits" of financial reforms, such as full convertibility of the yuan.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Zhang Yuan,Yao Chun)

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