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China (Shandong) Pilot Free Trade Zone

The China (Shandong) Pilot Free Trade Zone (SDFTZ) is one of six such pilot zones designated by the State Council in its Circular on Issuing the Overall Plan for the Six New Pilot Free Trade Zones (See Chinese version) in August 2019. The SDFTZ consists of three areas totalling 119.98 sq km: the Jinan Area (37.99 sq km), the Qingdao Area (52 sq km, including the 9.12-sq km Qingdao Qianwan bonded port area and the 2.01-sq km Qingdao west-coast comprehensive bonded zone) and the Yantai Area (29.99 sq km, including the 2.26-sq km Yantai bonded port area 2).

Development Goals

The SDFTZ is geared towards fostering institutional innovation and the accumulation of replicable and scalable experience. It will help to achieve the central government’s goals of strengthening innovation in the region’s economic and social development, transforming the economic growth model and building a strong maritime sector. Steps will be taken to expedite the replacement of old growth drivers with new ones, boost the maritime economy and establish the zone as a new focus for opening-up.

Over the next three to five years, the SDFTZ will embark on institutional innovations in line with advanced international standards, in a bid to boost quality, efficiency and competitiveness in its economic development.  Resources will be put into creating a world-class free trade zone that facilitates trade and investment, maintains a comprehensive financial services sector, demonstrates safe and efficient oversight, and wields significant influence on neighbouring areas.

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

Jinan Area

Covering an area of 37.99 sq km, this site will be dedicated to developing sectors including artificial intelligence, industrial financing, healthcare and wellness, culture and information technology. A pilot programme to establish a new, open-economy system will also be launched. The site aims to become a major regional economic centre, a logistics hub as well as a technological innovation centre.

Qingdao Area

This sub-zone covers an area of 52 sq km, and its development priorities include sectors such as modern maritime, international trade, shipping and logistics, modern finance and advanced manufacturing. It is intended that the area establish itself as an international shipping hub for Northeast Asia, a key innovation centre along the eastern coast and a demonstration zone for the maritime economy, with the aim of turning Qingdao into a pillar city on the Chinese coast.

Yantai Area

With an area of 29.99 sq km, this site will be focused on fostering industries ranging from high-end equipment manufacturing, new materials and new-generation information technology, to energy conservation and environmental protection, biomedicine and producer services. It will be developed into a pilot zone for China-Korea trade and investment co-operation, a maritime intelligent manufacturing base and a demonstration zone for the nation’s technological achievements and international technology transfers.

 

Latest Policies and Regulations

Please refer to the official websites of:

People’s Government of Shandong Province (Chinese only)

Department of Commerce of Shandong Province

China (Shandong) Pilot Free Trade Zone (Chinese only)

 

Please click here to view more articles on the China Pilot Free Trade Zones.

Content provided by Picture: HKTDC Research
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