24 April 2017
China (Henan) Pilot Free Trade Zone
Officially launched on 1 April 2017, the Henan Pilot Free Trade Zone (FTZ) forms part of the third batch of government-endorsed pilot FTZs. Covering an area of 119.77 sq kilometres, the zone is broken down into three sub-zones: Zhengzhou Area (73.17 sq kilometres, inclusive of the Henan Zhengzhou Export Processing Area A (0.89 sq kilometres) and the Henan Bonded Logistics Centre (0.41 sq kilometres)), Kaifeng Area (19.94 sq kilometres) and Luoyang Area (26.66 sq kilometres).
In line with the Overall Plan for the China (Henan) Pilot FTZ, as approved by the State Council, over the next three to five years, the Henan FTZ will set out to establish an institutional innovation system in accordance with international investment and trade practices, while also nurturing a legally-compliant and conducive international business environment. Every effort will also be made to develop the zone into a high-level free trade park, offering first rate investment and trade facilitation services. It will also look to create a cluster of high-end industries, while offering a premium level of accessibility in terms of transport and logistics, as well as efficient and convenient oversight. Additionally, it will set out to provide a model of good practice for the wider business community, while playing a leading role in the transformation and development of the inland economy and fully participating in the country’s renewed and enhanced opening up programme.
Foreign Investment Management
Under the terms of the Special Administrative Measures (Negative List) Relating to Foreign Investment Access, as promulgated by the State Council, a series of special management measures covering those businesses and industries deemed unsuitable for foreign investment are to be implemented across the 11 FTZs currently operating on the mainland. In the case of any sectors not specified on the negative list, the current practice of advance approval for foreign-invested projects, as well as the established process of examining and approving any foreign-invested enterprise’s contracts and articles of association, is to be replaced by filing requirements more in line with the system specified for domestic investors.
Any special administrative measures in place relating to national security, public order, public culture, financial prudence, government procurement, subsidies, special procedures and tax-related matters remain in force even if such sectors are not specified on the negative list. Furthermore, in the case of sectors related to national security, any foreign investment is also subject to scrutiny under the terms of the Tentative Measures for the National Security Review of Foreign Investment in Free Trade Zones.
Positioning of Sub-zones
The site will focus on the development of advanced manufacturing industries, including intelligent terminals, high-end equipment, automobile production and biomedicine. It will also look to facilitate a range of cutting-edge services, most notably logistics, international commerce, cross-border e-commerce, financial services, service outsourcing, design, trade conferences/exhibitions and support for the animation sector. By prioritising the integrated development of transport and logistics, as well as investment and trade facilitation, it will take a lead in creating new and innovative systems and mechanisms, while operating as a multi-modal international logistics centre and a transport hub in line with the emerging requirements of the Belt and Road Initiative.
This will have a primary focus on developing the service sector, including service outsourcing, medical tourism, design, cultural media facilities, cultural finance services, fine art trading and logistics. Every effort will also be made to enhance its equipment manufacturing resources, while it will be additionally established as a centre for international co-operation with regard to agricultural processing and related trade activities. Beyond this, it will also function as a centre for international cultural trade activities and co-operative cultural tourism ventures. This will see it act as a platform for the opening up of China’s cultural and creative industries to the wider world, while promoting the integrated development of a number of international cultural tourism initiatives.
This will focus on the development of high-end manufacturing industries, including equipment manufacturing, robotics and the use of innovative materials. In terms of its services remit, the emphasis will be on R&D, design, e-commerce, service outsourcing, international cultural tourism, the cultural and creative industries, cultural trade and cultural exhibitions. Furthermore, every effort will be made to enhance the site’s equipment manufacturing resources, while its role as a centre for international industrial co-operation will see it act as a platform for collaboration in the field of smart manufacturing. Beyond that, it will also provide a designated space dedicated to showcasing the finest examples of historic Chinese innovation and other heritage landmarks.
Policy and Regulatory Updates
For the latest information on the China (Henan) Pilot Free Trade Zone, please consult the following websites: