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Thursday, September 29, 2016, 16:33

China's FTZs drive new opening up

By Xinhua
China's FTZs drive new opening up
Pedestrians walk past a signboard of the China (Shanghai) Pilot Free Trade Zone in Pudong, Shanghai, March 18, 2015. (Photo / IC)

SHANGHAI - Without the Shanghai Pilot Free Trade Zone, US food quality certification firm Anchor Center for Certification (ACC) would have struggled to enter the Chinese market.

ACC filed its registration documents with Shanghai FTZ at the end of June last year, and received its license 15 days later. Its FTZ office opened for business in March.

Stella Si, executive president of the Shanghai firm, attributed the smooth process to the negative list for investment management, which scrapped requirements for foreign certification firms like ACC, and simplified approval procedures.

The negative list model adopted at the Shanghai FTZ is basically a blacklist defining sectors and businesses that are off limits to foreign investment. The FTZ is a testing ground for new policies to facilitate investment and trade, characterized by bolder measures and wider opening up.

Since the Shanghai FTZ was launched on Sept. 29, 2013, 10 other provincial regions now have FTZs. Three FTZs opened in Tianjin Municipality, and Fujian and Guangdong provinces, in April 2015.

On Aug. 31, seven new FTZs in the provinces of Liaoning, Zhejiang, Henan, Hubei, Sichuan and Shaanxi as well as Chongqing Municipality were approved.

The number of items on the Shanghai FTZ's negative list has reduced from 190 in 2013 to 139 in 2014, and to 122 in 2015.

Trials are aimed at bringing standards in line with international rules and new supervision systems have prompted revision of regulations.

A Boehringer Ingelheim Biopharmaceuticals (China) plant is involved in a pilot Contract Manufacturing Organization (CMO) project on new medicines of innovative small and medium-sized firms. The facility will begin a trial operation period in Shanghai FTZ in the first quarter next year.

Luo Jiali, general manager of the company, said three years ago he was doubtful about the CMO project, but the results of the pilots have reassured him.

Foreign investment has seen rapid growth in the FTZs thanks to the reforms.

More than 5,500 foreign-invested enterprises have been set up in the Shanghai FTZ over the past three years, each boasting average registered capital of US$15 million.

The contracted foreign investment of the FTZ accounted for 30 percent of Shanghai's total foreign investment in 2014. This rose to 60 percent last year and 66 percent in the first half of this year, according to Shanghai Commerce Commission.

In the first seven months of 2016, 5,783 enterprises were set up in the four FTZs by foreign investors and those from Taiwan, Hong Kong and Macao, securing inbound investment of US$7.2 billion, a year-on-year increase of 66.3 percent, according to the Ministry of Commerce.

In early September, China's top legislature revised four laws regulating inbound investment. The revisions, which will take effect on Oct 1, suspends administrative approvals for foreign and Taiwanese investors setting up ventures regulated by the four laws, following successful trials in four FTZs.

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