Chinese authorities to launch three new FTZs

Monday 29 December 2014 10:27 CET | News

Chinese Premier Li Keqiang announced on December 12 that three more Free Trade Zones (FTZ) will be established in China in the near future, reports.

The three new FTZs will be set up in Tianjin, Guangdong and Fujian provinces and are designed according to the Shanghai FTZ, launched in September 2013. Designed as a testing ground for further reforms and policies, the Shanghai FTZ features lower thresholds for corporate establishment, liberalised foreign exchange and levies no tax in the first ten years after a business is established. The zone also offers special benefits to certain industries, such as ecommerce, legal services and logistics, and adopts a “negative list” approach to foreign investment.

As southern China’s economic center, Guangdong has topped the GDP ranking of all provinces for nearly two decades. The province is proximate to Hong Kong and Macau and contains three of China’s five original Special Economic Zones (Shenzhen, Zhuhai and Shantou). Guangdong has been working towards further integration with Hong Kong and is home to 22 state-level economic development zones, which have attracted large amounts of foreign investment.

It is an industrial province of China through nine main industries, namely electronics, electrical appliances and machinery, petrochemicals, garments and textiles, food and beverage, construction material, paper making, pharmaceuticals, and automotive. Guangdong holds the largest share of China’s electronics industry, which comprises over 41% of the province’s total industrial output.

Fujian is one of the wealthiest regions in the country and was chosen as the first province to engage in economic exchange with Taiwan. Today, the economies of Fujian and Taiwan are closely related and complimentary, surrounding industries such as electronics, petrochemicals and mechanics. It is expected that, by the end of 2015, Fujian’s coastal ports will be capable of handling 500 million tons of cargo and the length of its roads and expressways will exceed 5,000 kilometers.

Tianjin is one of four directly controlled municipalities in China, meaning the city ranks as a province and is managed directly under the central government. It is a major port city located between Beijing and the Pacific Ocean. Tianjin contains several development zones, two of the most important being the Binhai New Area and Tianjin Economic-Technological Development Area (TEDA). Tianjin is also close to major oil and gas deposits and petrochemicals is a major industry. In 2010, Sinopec opened a large petrochemical facility in the city.

The refinery, a joint venture between Sinopec and Saudi Basic Industries, mainly processes crude oil from Saudi Arabia at the moment. Other major industries include automotive, pharmaceuticals and metallurgy. Other major sectors include the manufacturing of mobile phones and aerospace assembly and production.

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Keywords: China, authorities, FTZ, Tianjin, Fujian, Guangdong, free trade, area, investment
Categories: Payments & Commerce
Countries: World
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