24 April 2017
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).
In line with the Overall Plan for the China (Zhejiang) Pilot FTZ, 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
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
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 on the China (Zhejiang) Pilot Free Trade Zone, please consult the following websites: