China will continue to expand its construction of pilot free trade zones. On June 28, during the G20 summit in Osaka, Japan, China unveiled five major measures aimed at breaking new ground in opening-up. One of these measures was that the country will set up six new pilot zones for free trade and add a new area to the China (Shanghai) Pilot Free Trade Zone.

"Free trade zone" mentioned three times in one week

The 2019 negative lists for foreign investment market access were released June 30. The negative list for FTZs this year reduces the access restrictions on foreign investors from 45 fields to 37.

Pilot free trade zones will be supported in achieving wider opening-up and innovation-driven development in line with high-standard international economic and trade rules, a State Council executive meeting chaired by Premier Li Keqiang decided July 3.

On July 4, Ministry of Commerce spokesperson Gao Feng said the ministry is working to establish six new pilot free trade zones and open a new section of the Shanghai Pilot Free Trade Zone.

According to Gao, the new pilot free trade zones and the new section of the Shanghai Pilot FTZ are supposed to optimize the layout of FTZs in China, provide better services for the national strategy and conduct differentiated exploration, yielding more pilot results in both quantity and application areas.

When it comes to the 2019 negative lists for foreign investment market access, Gao said that as the negative list is shortened year by year, the overall business environment of the pilot FTZs is continuously promoted, and the market's innovation vitality and economic development momentum will be further stimulated.

He also said the State Council has put the establishment of relevant laws and regulations for the Foreign Investment Law in the 2019 plan. The main laws for foreign investment will be further specified.

China continues to expand its opening-up

Pilot FTZs have gathered a lot of good experience in the six years since their launch.

These actions on pilot FTZs show that China is preparing to break new ground in opening-up.

China had already set clear goals and directions on opening-up, but it is still looking for better methods. In addition, all-round opening-up will inevitably bring risks along with opportunities.

Pilot FTZs provide experiences and directions to expand opening-up. The restrictions on foreign investment in these zones have been reduced from over 190 in 2013 to 37 in 2019. More than 170 pilot experiences that can be replicated and promoted have been formed and promoted nationwide.

Official data shows more than 600,000 new enterprises have been established in pilot FTZs since 2013, including nearly 40,000 foreign-funded enterprises, which has effectively promoted the agglomeration and development of high-end industries. Though these FTZs cover only 20 percent of the country, they have provided 12 percent of the total revenue from foreign investment and imports and exports in China.

Moreover, pilot FTZs will be further developed in an effort to promote high-quality economic growth.

Provincial and municipal governments will be urged to delegate more provincial administrative authority to FTZs, especially in investment approval and market access. Reforms in decoupling business licenses and operation permits will be fully implemented in all pilot zones.

The government will step up the launching of measures to further widen market access in pilot FTZs, particularly in the service industry.

Bai Ming, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said these measures will further promote the business environment of FTZs and help to attract foreign investment.

Some experts said the new pilot FTZs will give more room to the established ones to grow and provide exporters with more convenient conditions to conduct their business.