Promulgation of the Regulation on the China (Guangdong) Pilot free Trade Zone

The Regulation on the China (Guangdong) Pilot Free Trade Zone, effective from 1 July, sets out comprehensive requirements on the establishment and development of the Guangdong Pilot Free Trade Zone in terms of its coverage, management mechanism, investment liberalisation and trade facilitation, promotion of high-end industries, innovation in finance industry and risk monitoring, co-operation between Guangdong, Hong Kong and Macao and the development of the “Belt and Road” initiative, overall management and services, as well as the rule of law.

Compared with the other three similar regulations on the pilot free trade zones, the Regulation on the China (Guangdong) Pilot Free Trade Zone (the Regulation) has made a breakthrough in establishing a fault-tolerant mechanism, enabling it to become a viable legal provision providing practical and effective legal protection for the implementation of innovative measures in the Guangdong Pilot Free Trade Zones According to Clause 4 under the General Principles of the Regulation, “in the case where innovative measure implemented in the pilot free trade zones failed to reach its objectives, but is in line with the national reforms, and that the decision-making processes comply with the law and legal requirements and do not involve the pursue of private interest or any malicious collusion violating public interests, then the relating department and individuals are not liable to any negative judgement and will be exempted from relevant responsibilities.”

The Regulation has a designated chapter for high-end industries, and explicitly stated the industry orientation and featured industries for priority development in the respective free trade zone area under the framework of the Overall Plan, as well as setting out various important aspects and principles for development, such as encouraging the development of headquarters economy in the pilot free trade zones, supporting the development of new forms of trade such as elements trading platform, cross-boundary E-commerce, product showcase in bonded areas, nance leasing, promoting the clustering and innovative development of nance industry, encouraging interactive development of international maritime transport and logistics industry.

The Guangdong Pilot Free Trade Zone takes up the special role of being the demonstration area of enhanced co-operation between Guangdong, Hong Kong and Macao, and an important hub along the 21st Century Marine Silk Road. To highlight Guangdong- Hong Kong-Macao co-operation and to be in line with the regional characteristics of the development of the “Belt and Road” initiative, the Regulations has specially set out relevant provisions in relations to Guangdong- Hong Kong-Macao co-operation and the “Belt and Road” initiative. The contents cover the promotion of the networking and exchanges of professional personnel, supporting youth entrepreneurship in the three regions, deepening the liberalisation of service industry in Hong Kong and Macao, introducing innovative measure in customs clearance in the borders of the three regions, simplifying the examination and quarantine procedures for general commodities with Hong Kong and Macao as the place of origin, exploring the feasibility of the inspection information exchanges, mutual recognition of monitoring and regulation as well as mutual aid in law enforcement between the three regions, strengthening co-operation with the free trade zones in countries along the Belt and the Road, establishing outbound investment comprehensive service platforms in response to the “Belt and Road” initiative, developing tourism routes and products with Silk Road characteristics and developing the co-operation and cultural exchanges.

The Regulation also introduced an innovative af liated company evaluation mechanism, requiring the management authorities of the free trade zone to organise af liated company evaluation organisations or market entities to evaluate on the support and co-ordination provided by the government and related departments, which will be included as part of the annual evaluation of the department. The mechanism helps in promoting strengthened support in the reforms and innovations of the free trade zones from various levels of government departments, bene ting to the overall development of the free trade zones.

Regulation on the China (Guangdong) Pilot Free Trade Zone