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INVESTMENT: Special Economic Zones Increasingly Open For Foreign Investors
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Special Economic Zones Increasingly Open For Foreign Investors
By Morgan Brady

shanghai1

Shanghai Free Trade Zone

早在2016年,我国在G20杭州峰会前决定在辽宁、浙江、河南、湖北、重庆、四川、陕西新设立7个自由贸易试验区,以 “中国行动”回应世界关切。在接受采访时,商务部国际贸易经济合作研究院副院长李光辉说:“这体现了中国继续推进改革开放的信心和决心。中国通过创新发展方式、建设开放型经济、完善全球治理等来阐述‘中国主张’,为世界经济发展做出贡献。”

作为我国新一轮改革开放的试验田,自贸试验区以制度创新为核心,全面对标国际通行规则,检验综合监管能力,提升治理能力,彻底改变行政理念,大幅度提高行政效率。那么自贸区对 海外投资者有什么样的影响和作用呢?

我国境内目前已有和在建的特别贸易区共11个,对于国内企业主而言,自贸区有其政策和地理位置的多方面优势。“自贸区”,关键当然在贸易自由,货物在海外及自贸区之间进出、存储自由,免征收入关税,海关免检,可发展海外代购等业务,这大大减轻了企业压力,给了企业更大的发展空间。在自贸区,设立企业只需4天,投资者在自贸区内办理营业执照的时间将大大缩短。工商部门还出台了一系列配套政策:准备好所有材料,交给工商局注册大厅,就可“一口受理”。另外,自贸区设立企业无需验资,大大方便了企业的入驻,缓解了一定的资金问题。

我国一直在推行贸易自由化政策,以吸引更多外资入驻,这无论对国家还是金融市场都是极为有利的。尽管外国公司仍然需要向商务部申请并接受国家安全审查,但各类优惠政策已构成吸引外来投资的必要条件,自贸区的发展一定会给中外企业贸易发展带来更多新机遇。

BT 201804 Investment 05 zhejiang

Zhejiang Free Trade Zone

Free trade zones in China offer a win-win solution for both Chinese and foreign investors. There are currently 11 free trade zones in China, and each has its own specialization and focus. These zones are successful in attracting foreign investment although this is not the only motive behind establishing them. The Chinese government was motivated by putting a limit on smuggling of products into China without paying due taxes, in addition to attracting foreign capital. Furthermore, the Chinese government would like to organize the process of entering the increasing quantities of products being imported into the country, and the free trade zones are one of the ways to do this.

Investment 01Benefits For Businesses

Although the term is “free”, investing and doing business in the free trade zones is not entirely tax free. The tax rate is 16.5%, but still, it is almost half the tax rate for limited companies in Hong Kong (30%). In general, Companies in free zones are subject to a less strict regulatory framework than the one located in China. Other perks include uncensored Internet and social media access, and duty free warehousing, which enables businesses to import products to Free zones, and then the products can be listed for sale in China to customers directly, enabling businesses to transfer the tax burden to the consumer.
 

In 2016, the number of free trade zones was four, and in the first half of 2016, around 4923 companies with foreign funding were founded in those zones, and a total investment figure reached 87.96 billion RMB. With the addition of another seven zones in April 2017, mostly in underdeveloped areas in China, number of foreign-funded companies in those areas is expected to be higher.
 

The new seven areas are built to support the one belt, one road strategy and to stimulate regional development. Most areas are focused on industries specifically designed to promote development in underdeveloped regions, such as high-end industries like cloud computing and biological medicine, medical tourism and international cultural trade, the finance and IT industry, and equipment manufacturing including automotive and aerospace. The only free zone area located in an economically developed area among the seven is the Zhejiang free trade zone. And this area is more focused on reinforcing existing economic activity, with emphasis on liberalization of international commodities trading, including oil associated products as the main priority. The area also engages in building a strong logistical infrastructure in terms of transport, warehousing, trading and supply industries, to advance its objectives.

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Tianjin Free Trade Zone

Gradual Removal Of Restrictions On Free Trade Zones

Last February, the state council, China’s Cabinet, announced that many restrictions on foreign companies operating in the 11 zones have been eased. Loosening of regulations encompassed 16 industries, namely shipping, printing, civil aviation, certification and accreditation, entertainment venues, education, travel agencies, direct sales, gas stations, maritime transportation, retail and wholesale, aircraft, urban rail, Internet cafés, banking, and performance brokerage.
 

Although many new relaxations introduced were temporary, many other relaxations allowed foreign companies to operate in previously prohibited industries, such as Internet cafés, aircrafts, and printing. Also, many relaxations aimed to attract innovation to the country through free zones.
 

Back in 2017, China had removed a total of 27 restrictions on foreign companies who wanted to operate in the free zones. The negative list has been reduced for foreign companies, particularly companies working in railroad transport equipment and civilian satellites. Also, companies were able to operate in areas such as providing Internet access service, building theme parks, and providing credit-rating services.

BT 201804 Investment 03

Guangdong Free Trade Zone

Special Economic Zones Are Proving To Be A Successful Experience

A report by the World Bank has pointed out that China’s experience in establishing special economic zones has been a successful one. Particularly, it can be used as a lesson for the development of Africa. Critical success factors to the success of this experience were long-term commitment and dedication of the government, an environment that is supportive to businesses, good and strategic choice of locations to establish the zones, technological upgrading and skills training, and strong connections with the local economy. But despite the success, the report points out that China should give more concern to environmental degradation as well as social issues with fast industrial expansion.
 

Conclusion

China has been implementing a policy of liberalization to attract foreign capital to its land, which would be positive for the country and its financial markets. It has been incrementally expanding the space available for foreign companies to operate, whether by removing requirements to form partnerships with Chinese companies, or procure materials from China, among other measures. But despite the gradual loosening of regulation, foreign companies are still required to apply to the ministry of commerce and be subject to national security review.
 

The benefits, however, outweigh the costs, since businesses will have access to the rapidly growing markets of the country.

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