By Xie Weiqun, People’s Daily
China (Shanghai) Pilot Free Trade Zone (FTZ) was officially launched on September 29, 2013, marking a prelude to China’s exploration in this specific area. During the past five years, a batch of replicable experience has been generated by the free trade zone, which largely facilitated trade, investment and supervision and registered positive outcomes.
A group of amazing data can indicate the development of the China (Shanghai) Pilot Free Trade Zone in the past five years.
Today, it requires no submission of paper documents to set up foreign-invested enterprises at the Shanghai-based FTZ, and the processing time has been reduced from eight working days to one. Now the time for declaration of goods is reduced to half an hour from the previous one day, and vessel information reporting from two days to two hours.
72,000 free trade accounts have been opened by over 38,000 domestic and foreign enterprises, and cross-border trade settlements in both RMB and foreign currency worth 25.9 trillion yuan have been handled, covering 161 countries and regions.
China issued its first negative list for foreign capitals on the second day after the Shanghai FTZ was inaugurated, specifying 18 industry categories and setting out 190 special administration measures on foreign investment. It means that foreign investment in all sectors should be allowed unless listed as prohibited or restricted.
Though it was a long list, it reduced or deleted access restrictions on foreign investment, simplified access administration and enhanced transparency of China’s openness.
Since then, the number of items on the list has been on a decrease. By 2018, the FTZ negative list, released by National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC), had only 45 items on it, 145 less than those when it was firstly issued.
Shanghai also upgraded its management for foreign investment, taking filing as a major method of access administration for foreign capitals, since the negative list only stipulates restricted areas and offers no information on the operation in accessible fields.
Foreign invested enterprises can go through record-filing procedures online, including application, approval and notification, and the processing time has been shortened to one working day.
The filing administrative measure has greatly enhanced foreign investors’ enthusiasm in investing Shanghai. From the establishment of the Shanghai FTZ to June 2018, a total of 8,696 foreign-funded enterprises have been set up. The contract value totaled $110.24 billion, $22.133 billion of which has been paid in. Over 98 percent of these enterprises were approved through the filing mechanism.
Shanghai FTZ’s newly added paid-in capitals reached $6 billion in 2017, ranking the first among all the FTZs across the country in this regard.
In addition to the shrinking negative list, Shanghai is also taking the lead in broadening market access and enlarging the range of foreign investment. By June this year, over 2,600 measures to open wider have been introduced.
For the large number of vessels arriving at or departing the FTZ, clearance documents are a must. Now, the single window system has broken the limits of time and space, enabling online processing, e-signatures and online transmission and providing one-stop integrated services through multiple channels. As a result, processing time has been substantially decreased from one day to two hours.
Another important trial of the Shanghai FTZ is the improvement of trade supervision. Establishing the International Trade Single Window and separating certificates from business license are two main items.
Thanks to the International Trade Single Window, enterprises can submit all the documents at one time, and the supervision departments will feed back to enterprises through the same platform. The innovative mechanism has realized data sharing between enterprises and supervision departments, as well as among supervision departments. It also enabled enterprises to go through all formalities of international trade within the same network.
China (Shanghai) International Trade Single Window was launched in February 2014, connecting 22 government departments and serving more than 270,000 enterprises.
Over the past five years, a total of 57,000 new enterprises registered in Shanghai pilot FTZ, 1.6 times more than those established in the same district 20 years ago.
Over 10,000 of them were foreign enterprises, accounting for nearly 20 percent of the total newly registered companies, 15 percentages higher than the figure when the establishment of Shanghai FTZ was established.
Paid-in foreign capitals totaled $25 billion, and settlements of over 2,200 outbound investment projects have been completed.