At a bi-monthly meeting on December 28, the Standing Committee of the National People’s Congress mapped out the specific locations of three new Free Trade Zones (FTZs.) The Committee also announced the expansion of the Shanghai FTZ, as well as the simplification of a number of investment procedures in these four zones.
The Guangdong FTZ, in southern China bordering Hong Kong, will include the Nansha New Area in Guangzhou, Shenzhen Qianhai and Zhuhai Hengqin New Area, covering a total of 116.2 square kilometers.
The Tianjin FTZ, close to Beijing and with a total area of 119.9 square kilometers, will comprise Tianjin Port, Tianjin Airport and the Binhai New Area industrial park.
Lastly, the 118.04-square-meter Fujian FTZ in the southeast, which is close to Taiwan, will include industrial areas in the provincial capital of Fuzhou, the whole of Xiamen, and Pingtan, a new industrial park targeting investment from Taiwan.
China has also dramatically expanded the Shanghai Free Trade Zone to include the Lujiazui financial district, Jinqiao development zone and Zhangjiang hi-tech park. The added areas are all in the Pudong district of Shanghai. Enterprises established in these areas will be able to take advantage of all the preferential polices implemented in the Shanghai FTZ.
Lujiazui is the city’s financial district and home to the regional headquarters of numerous multinational and Chinese companies, especially Chinese banks. With the inclusion of Lujiazui financial district, the FTZ plans to further open up service industries and spur financial liberalization. Originally, the Shanghai FTZ consisted only four bonded zones, namely the Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and the Pudong Airport Comprehensive Free Trade Zone.
The expansion will increases the area of the Shanghai zone to 120.27 square kilometers, making it larger than any of the new FTZs. The expansion will allow Shanghai to give full play to the advantages of the Pudong New Area and to test foreign investment reform on a larger scale, said officials.
Additionally, the State Council said it plans to remove 12 administrative approvals for foreign companies, Sino-foreign joint ventures (JV) and Taiwanese investors in the country’s FTZs. Foreign companies seeking to set up a company in one of the zones will only need to report to the relevant authorities for record-filing, rather than obtain pre-approval, as previously.
Administrative approval will no longer be needed for foreign companies wishing to merge or otherwise change their operating period. Joint ventures in the zones will be exempt from administrative approval for establishment, extension of their cooperating period and major changes of contracts or Articles of Association. These preferential policies shall take effect on March 1, 2015, with a three-year trial period.