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Qzone

China (Zhejiang) Pilot Free Trade Zone

Officially launched on 1 April 2017, the Zhejiang Pilot Free Trade Zone (FTZ) forms part of the third batch of government-endorsed pilot FTZs. All told, the zone covers an area of 119.95 sq kilometres, consisting of both on-shore facilities and off-shore mooring resources. The zone is broken down into three primary sub-zones: The Zhoushan Outlying Islands Area (78.98 sq kilometres inclusive of the Zhoushan Port Integrated Bonded Area 2 (3.02 sq kilometres)), the Northern Zhoushan Island Area (15.62 sq kilometres inclusive of the Zhoushan Port Integrated Bonded Area 1 (2.83 sq kilometres)), and the Southern Zhoushan Island Area (25.35 sq kilometres).

Development Goals

In line with the Overall Plan for the China (Zhejiang) Pilot FTZ (see Chinese version), as approved by the State Council, over the next three to five years, the Zhejiang FTZ will set out to maximise investment and trade facilitation, nurture the development of a cluster of high-end industries and maintain a well-regulated, legally-compliant environment. Furthermore, it will provide a high level of financial services and efficient and convenient supervision, while playing a leading role as a model for the wider business community. Additionally, it will strive to deliver significant improvements in the global allocation of bulk commodities, primarily with regard to oil and associated products. It will also play a key role in establishing a free trade port area, designed to meet international standards.

Within the FTZ, its special customs supervision area will focus on institutional innovation, with trade facilitation, international trade bonded processing, bonded logistics and bonded services also within its remit. Other areas will be dedicated to developing innovative systems and mechanisms, particularly with regard to investment procedures and financial services. Among the other activities undertaken within the zone will be the transshipment of commodities (particularly oil), trade processing, the provision of bonded fuel oil supply services, equipment manufacturing (particularly in the aeronautical sector),  and the management of international shipping services.

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

Zhoushan Outlying Islands Area

Work on the Yushan Island site will focus on developing a state-of-the-art world-class green petrochemical base, while activity on Shulanghu Island, Huangzeshan Island, Shuangzishan Island, Qushan Island, Xiaoqushan Island and Majishan Island will primarily be geared to developing storage, transshipment and commodity trading (particularly oil) facilities. The offshore mooring facilities, meanwhile, will be reserved for the provision of bonded fuel oil supply services.

Northern Zhoushan Island Area

This site will focus on commodity trading, primarily with regard to oil and related products. It will also provide bonded fuel oil supply facilities, as well as bonded logistics services, industrial storage and manufacturing capacity, including the production of a wide range of equipment for the petroleum and petrochemical industries.

Southern Zhoushan Island Area

This will focus on commodity trading, aeronautical manufacturing and spare parts logistics, as well as R&D and design work related to a number of ancillary industries. With a particular brief to secure the ongoing development of the Zhoushan Aviation Industry Park, the site will also facilitate trade in aquatic products, promote marine tourism and drive greater utilisation of oceanic resources, all the while providing an operational platform for companies in the commerce, financial services, shipping, information consultancy and high-tech sectors.

Policy and Regulatory Updates

For the latest information, please consult the following websites:

Department of Commerce of Zhejiang Province

Zhejiang International Investment Promotion Center

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

 

Please click here to view the latest articles of China Pilot Free Trade Zones.

Content provided by Picture: HKTDC Research
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