The role of Free Trade Zones in the Chinese economy

Published: 02.07.2019 Related countries:  China China

Free Trade Zones are special areas where China has pushed the implementation of a number of economic and social reforms, promoting free trade, investments, and new models of opening-up towards foreign economies.

 

Free Trade Zones are special areas where China has pushed the implementation of a number of economic and social reforms, promoting free trade, investments, and new models of opening-up towards foreign economies.

 

According to the last report jointly issued by China Ministry of Commerce and Chinese Academy of International Trade and Economic Development during the first China Free Trade Zone Development Forum held in Wuhan in June 2019, by the end of 2018 more than 610,000 enterprises have been established in the FTZs of China since the establishment of the first one in Shanghai. Among these enterprises, around 34,000 are foreign-invested companies.

 

The report furtherly highlights the relevance of the FTZ in the country’s economy, reporting that the 11 FTZs (excluding Hainan FTZ) have attracted 12% of the total foreign direct investment and has generated 12% of the country’ international trade during 2018.

 

The report also shows that the China FTZs promotes cooperation with other regions and countries along the “Belt and Road” thanks to infrastructures that connect the central areas of Sichuan, Hubei, Henan, and Shanxi with Asian and European countries.

 

 

 

China Free Trade Zones

 

 

 

2013

 

China (Shanghai) Pilot Free Trade Zone: is the first free trade zone established in 2013, expanding over 120.7 square kilometers. China Shanghai Pilot Free Trade Zone focuses on the free trade, foreign direct investment, logistics and financial services and comprises the bonded areas of Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area, Pudong Airport Comprehensive Free Trade Zone, Jinqiao Development Zone, Lujiazui Financial Zone and Zhangjiang High Tech Park.

 

 

 

2015

 

China (Fujian) Pilot Free Trade Zone has been established in 2015 over 118.1 square kilometers in Fujian Province, for the development of the ambitious project Maritime Silk Road and the trade and investments with Taiwan. Fujian FTZ includes Fuzhou, Pingtan, and Xiamen areas.

 

China (Guangdong) Pilot Free Trade Zone has been established in 2015 over 116.2 square kilometers in Guangdong Province, with a focus on the Pearl River Delta area and to promote cooperation between Guangdong and the special administrative regions of Macao and Hong Kong. Guangdong FTZ includes the Nansha New District in Guangzhou City, Qianhai and Shekou area in Shenzhen City and Hengqin New District in Zhuhai City.

 

China (Tianjin) Pilot Free Trade Zone has been established in 2015 over 119.9 square kilometers in the municipality of Tianjin and aims to expand manufacturing and logistics services and promote the synergies between Tianjin, Beijing and Hebei Province. Tianjin FTZ includes Tianjin Airport area, Binhai Centre Business Development area, and Dongjiang Port area.

 

 

 

2017

 

China (Zhejiang) Pilot Free Trade Zone has been established in Zhejiang Province in 2017. The total area is 119.9 square kilometers and includes the Zhoushan Islands area, Zhoushan North area, and Zhoushan South area. Zhejiang FTZ has the scope to develop foreign trade in bulk commodities and to promote maritime logistics and industries.

 

China (Sichuan) Pilot Free Trade Zone is the free trade zone established in Sichuan Province in 2017 for promoting the Western areas of China through developing foreign trade, manufacturing, and advanced services. Sichuan FTZ comprises of Chengdu Qingbaijiang Railway Port area, Chengdu Tianfu area and South Sichuan Port area over 120 square kilometers.

 

China (Henan) Pilot Free Trade Zone, established in 2017 over 119.8 square kilometers in Henan Province, aims to develop and promote the Belt and Road Initiative and to create the logistics system and the required infrastructures for the Central regions of China. Henan FTZ includes Luoyang area, Zhengzhou area, and Kaifeng area.

 

China (Hubei) Pilot Free Trade Zone is the FTZ established in 2017 in Hubei Province, to promote the Yangtze River Economic Belt and to support the development of Central regions of China. Hubei FTZ includes Yichang area, Xiangyang area, and Wuhan area. The total area is 119.9 square kilometers.

 

China (Liaoning) Pilot Free Trade Zone has been established in 2017 in the northern Province of Liaoning, for promoting the economic expansion in the North-east of China. Liaoning FTZ covers over 119.9 square kilometers and includes Shenyang area, Yingkou area, and Dalian area.

 

China (Shaanxi) Pilot Free Trade Zone has been established in 2017 in the central Province of Shaanxi for developing the development of the Western and Central regions of China and to support the Belt and Road Initiative. Shaanxi FTZ covers over 119.9 square kilometers and includes Yangling area, the Central area, and Xi’an International Trade and Logistics Park.

 

China (Chongqing) Pilot Free Trade Zone has been established in Chongqing municipality in 2017 as an important hub for the Belt and Road Initiative, with the purpose to promote the Yangtze River Economic Belt and the Western regions of China. Chongqing FTZ extends over 119.9 square kilometers and comprises the area of Xiyong, Liangjiang, and Guoyuangang.

 

 

 

Future planned Free Trade Zones

 

China (Hainan) Pilot Free Trade Zone will be the 12th FTZ in China, and its project was unveiled on October 16, 2018. Hainan FTZ will cover the entire island (over 35,000 square kilometers) and will focus on the development of the island as a key gateway to the Pacific and Indian oceans and South East Asia, the promotion of the tourism and a pilot zone for comprehensively deepening reform and opening.

 

Hainan FTZ is expected to be established by 2020.