Article Prepared By: Wang Yi, Mainland China Business Advisory Service Consultant of IPIM (Guangdong)

The Ministry of Commerce Promulgates 26 Provisions in Support of the Innovations of the Free Trade Zones

The Ministry of Commerce of the People’s Republic of China recently issued the “Opinions on Suppor ting the Innovations and Developments of Pilot Free Trade Zones” (the Opinions). It comprises of 26 provisions, detailing policies for further innovation and development of the free trade zones in Fujian, Guangdong, Shanghai and Tianjin, covering fiver major areas including co-ordinating the implementation of projects, promoting the transformation and upgrade of foreign trade, lowering the threshold for investment, improving the competition environment, as well as evaluating the operation of the pilot free trade zones. It also covers the priority implementation of the Hangzhou cross-border E-commerce policy in the FTZ, model city of service outsourcing to be extended to FTZ, and the rst-time suggestion of allowing wholly foreign-owned pawn shops and petrol stations to be established.

Support for Transformation and Upgrade of Foreign Trade To suppor t the development of cross- border E-commerce business in the pilot FTZ, and based on the evaluation of the China (Hangzhou) Cross-Border E-Commerce Comprehensive Pilot Zone, to duplicate and implement in the FTZ the policies on customs monitoring, inspection and quarantine, import and export taxation, settlement and sales in foreign exchange.

Actively develop the service outsourcing industry, and study how the supporting policies for the service outsourcing model city can be extended to the FTZ. According to the “Opinions on Promoting Accelerating Development of Service Outsourcing Industry” promulgated by the State Council, strengthened policies and measures will be implemented in the service outsourcing industry model city, such as the introduction of zero value-added tax for international service outsourcing and a tax-free policy.

Support Shanghai Pilot FTZ to implement the Asia-Paci c Model E-port Network to strengthen international trade liaisons.

Support Tianjin Pilot FTZ to set up a green supply chain management system and encourage the development of green trade.

Support Fujian Pilot FTZ to promote the administration of the development of Taiwanese petty trade.

Lowering Threshold for Investment Access

Allow wholly foreign-owned pawning enterprises and petrol stations to be established, eliminate the requirements on the year for foreign businesses to apply for permission for direct sales.

Study on supporting the Guangdong Pilot FTZ to abolish or further liberalise the access requirement for the eligibility, share-holding proportions and scope of business of Hong Kong and Macao service suppliers.

Improving the Competition Environment

Support pilot FTZ to have parallel imports of automobiles, establish multi-channel and diverse marketing models. Pilot enterprises may apply to the Ministry of Commerce for the Automatic Import Licence for Vehicular Products.

Instruct FTZ to establish a sophisticated authority for handling complaints, innovation involving a complaint and dispute reconciliation mechanism, and constantly enhancing the protection for foreign investors investing in China.

Support Pilot FTZ to establish an out- reaching comprehensive information service platform to provide an integrated service for enterprises in the region for going global.

Website on “Opinions on Supporting the Innovations and Developments of Pilot Free Trade Zones”