25 Sept 2019
China (Guangdong) Pilot Free Trade Zone
The State Council approved the establishment of the China (Guangdong) Pilot Free Trade Zone (GDFTZ or Guangdong FTZ) at an executive meeting held on 12 December 2014. Officially launched on 21 April 2015, the Guangdong FTZ covers three areas totalling 116.2 sq km: Nansha Area of Guangzhou (60 sq km, including the 7.06-sq km Guangzhou Nansha Bonded Port Area), Qianhai-Shekou Area of Shenzhen (28.2 sq km, including the 3.71-sq km Shenzhen Qianhai Bay Bonded Port Area), and Hengqin Area of Zhuhai (28 sq km).
According to the Overall Plan for the China (Guangdong) Pilot Free Trade Zone (see Chinese version) approved by the State Council, the Guangdong FTZ is to embrace Hong Kong and Macau to serve the mainland and open up to the world. Efforts will be made to build the FTZ into a Guangdong-Hong Kong-Macau in-depth cooperation demonstration zone, an important hub of the 21st Century Maritime Silk Road, and a pilot zone of China’s latest round of reform and opening-up. The development goals of the FTZ are: to create an international, market-oriented and regulated business environment based on pilot reforms implemented over a period of three to five years; establish a new and open economic system; deepen Guangdong-Hong Kong-Macau cooperation; create new advantages in international economic coopetition; and set up a free trade park with a regulated environment meeting high international standards, and offering investment and trade facilitation, outstanding leader functions, and safe and highly efficient supervision.
Foreign Investment Management
The Special Administrative Measures (Negative List) on Foreign Investment Access (See Chinese version), issued by the National Development and Reform Commission, set out unified special management measures governing issues such as equity ratios and senior management personnel of businesses operating in FTZs in China. For industry sectors falling outside the scope of the negative list, the principle of foreign and domestic investors receiving the same treatment will apply.
Special administrative measures relating to national security, public order, public culture, financial prudence, government procurement, subsidies, special procedures and tax-related matters not on the negative list remain subject to existing provisions. Foreign investment concerning national security is subject to review in accordance with the Tentative Measures for the National Security Review of Foreign Investment in Free Trade Zones (See Chinese version).
Positioning of Sub-zones
Nansha Area of Guangzhou
Nansha New Area, or GDFTZ (Nansha), is blessed with the policy advantages of being a state-level new area, state-level economic and technological development zone, bonded port area, and new and high-tech development zone. With a sound industrial foundation, Nansha New Area is one of the country’s three shipbuilding bases, a national auto and spare parts manufacturing and export base, as well as a nuclear power equipment manufacturing base in the Pearl River Delta region. Where scientific research is concerned, the research base of the Guangzhou Institute of Industry Technology under the Chinese Academy of Sciences located in Nansha has built a technology innovation platform for numerical-control equipment technology research and development, and modern logistics industry planning services; and it has been rated as a state-level technology transfer demonstration base. Moreover, the Hong Kong University of Science and Technology and Fok Ying Tung Foundation have jointly established a facility for promoting the internationalisation of traditional Chinese medicine in Nansha New Area.
GDFTZ (Nansha) will devote great efforts to creating a regulated international business environment in line with new international practice. It aims to take the lead in implementing free trade in services with Hong Kong and Macau, building an international shipping and logistics centre with comprehensive international trade functions and strong financial innovation ability, as well as developing into a demonstration base for technology innovation cooperation between countries and regions along the 21st Century Maritime Silk Road.
GDFTZ (Nansha) comprises seven functional sub-sections:
Section1. An international shipping development and cooperation zone, with focus on developing services including shipping logistics, bonded warehousing, international transshipment, international trade, bulk commodity transaction, and auto logistics. The zone will serve as a test bed for the pilot implementation of reform in international shipping services and customs clearance.
Section 2. A financial and commercial development experimental zone, with emphasis on developing the headquarters economy, financial services and commercial services. Efforts will be made to promote Guangdong-Hong Kong-Macau cooperation in financial services, as well as explore ways to experiment with renminbi convertibility under the capital account.
Section 3. A Guangdong-Hong Kong-Macau integrated development experimental zone, with emphasis on developing information technology, financial back-office services, commercialisation of technological achievements, and professional services. Action will be taken to build a Guangdong-Hong Kong-Macau producer services development base, and to explore new mechanisms for promoting social management innovations as well as economic integration between the mainland, Hong Kong and Macau.
Section 4. An international education and medical cooperation experimental zone, with focus on developing such sectors as education, training, health care and medical care. The zone will also take the lead in experimenting in-depth opening up of the education and medical sectors to Hong Kong, Macau and international players.
Section 5. A Guangdong-Hong Kong-Macau scientific and technological innovation and cooperation zone, with emphasis on developing technological innovation, cultural and creative industries, service outsourcing, and the yachting and cruise liner economy. Efforts will be made to create new modes of cooperation in scientific and technological R&D between Guangdong, Hong Kong and Macau, set up a Guangdong-Hong Kong-Macau innovative achievements commercialisation base and an international scientific and technological innovation service centre.
Section 6. A comprehensive outbound investment service zone, with emphasis on developing the business services sector, fostering new formats of foreign trade, and attracting clusters of small and medium-sized enterprise (SME) headquarters. Steps will be taken to assist Hong Kong and Macau SMEs in tapping the mainland market as well as give support to mainland SMEs in developing the international market.
Section 7. A processing trade transformation and upgrade service zone, with focus on developing producer services such as processing and manufacturing activities, R&D and incubation, data services, e-commerce, and testing and certification services. Efforts will be made to build public service platforms to facilitate the transformation and upgrade of processing trade enterprises, covering technology R&D, industrial design, intellectual property and other issues.
Qianhai-Shekou Area of Shenzhen
Qianhai and Shekou are just across the sea from Hong Kong. Leveraging on the close cooperation in modern services between Shenzhen and Hong Kong, and taking advantage of Hong Kong’s rule of law and level of internationalisation as well as its advanced port development, GDFTZ (Qianhai-Shekou) will give emphasis to developing new strategic services such as finance, modern logistics, information, and technology services. It aims to build itself into a pilot demonstration base for China’s financial sector opening up to the outside world, an important base for trade in services worldwide and an international hub port of China.
Hengqin Area of Zhuhai
The Hengqin New Area, or GDFTZ (Hengqin), linked to Macau via the Lianhua Bridge, implements an innovative supervision mode of round-the-island real-time monitoring. Capitalising on the cooperation with higher education institutes such as the University of Macau and the development of the Chimelong Ocean Kingdom in Zhuhai, GDFTZ (Hengqin) will give emphasis to developing such industries as tourism, leisure and health; commercial and financial services; culture, science and education; and new and high technology. Action will be taken to set up a pilot zone for the opening-up of cultural and education services and an international commercial services and leisure tourism base, as well as create a new carrier for the diversified development of Macau’s economy.
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