Hainan FTZ to ease restrictions on foreign firms
Print Edition
CHINA unveiled a detailed plan yesterday to establish the southern province of Hainan as a free trade zone, in its latest move to open up the economy.
The plan, issued by the State Council, China’s Cabinet, mapped out the target and scope for the FTZ development while identifying key industries that will see fewer foreign investment restrictions.
“The development of the Hainan FTZ is a key measure for making new ground in pursuing opening up on all fronts. The move shows China’s resolution and confidence to open wider to the world,” Vice Minister of Commerce Wang Shouwen told a press conference.
The release of the plan followed the announcement of the decision in April to develop Hainan into an FTZ, the country’s 12th and largest.
By 2020, the plan aims to build Hainan into a high-quality FTZ that promotes trade and investment facilitation, provides an excellent legal environment, thorough financial services, efficient regulation, a favorable ecological environment, and boosts the development of surrounding areas.
Fewer restrictions
Foreign investors will have wider access in a number of key areas including tourism, education, and telecommunications, according to the plan.
A negative list approach, which outlines economic areas restricted for foreign investment, will be adopted in the Hainan FTZ.
As part of its opening-up policies, China unveiled a new negative list in June for foreign investment in FTZs, with the number of items down to 45 from 95 in the previous version. Foreign investment caps in areas including the breeding of new vegetable varieties and their seed production as well as international maritime transport businesses will be lifted, according to the plan.
The plan also gives Hainan more autonomy in granting foreign investment access. International businesses providing value-added telecommunication services will no longer need to go through central authorities to enter the market, according to the plan.
To promote international trade, data-based systems will be put into use to improve customs efficiency while multinationals and trade companies are encouraged to treat Hainan as the center of their global or regional trade network.
In addition to the measures detailed in the plan, the provincial government of Hainan has drafted an action plan to create a better business environment, which is vital for attracting foreign investment, said Shen Danyang, vice governor of Hainan.
“One of the key agendas for the FTZ development is the innovation of mechanisms. We have to establish innovative mechanisms for a fair and efficient market environment,” Shen said.
Amy Cai, board director of PwC Advisory Services (Hainan) Co Ltd, said the demand to create a better business environment provided opportunities for professional service agencies such as PwC. “We look forward to more detailed measures. We hope Hainan will further improve investment transparency and attract more foreign investment,” Cai said.
One of the key features of the Hainan FTZ development plan was that it took into consideration Hainan’s distinct characteristics, Wang said.
Known for its sandy beaches and resort-lined coast, Hainan is already a global tourist hotspot. Some 67 million people visited the island in 2017.
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