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Caution urged with new free trade zones

2013-09-04 08:34 Global Times Web Editor: qindexing

China should be cautious in approving plans to set up more free trade zones in order to avoid repeating potential mistakes, analysts urged Tuesday amid reports that a number of regions are hoping to join Shanghai by opening their own free trade zones.

"The government should stagger the time for approving free trade zones in different regions in order to avoid any mistakes that the existing free trade zone might make," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, told the Global Times Tuesday.

North China's Tianjin is working to get approval from the authorities to set up a free trade port zone in the city's Dongjiang Free Trade Port Zone (DFTP). xinhuanet.com, the official website of the Xinhua News Agency, reported Tuesday.

The DFTP's pilot reforms for goods transportation, capital flows and business operation have proceeded smoothly, but reform of the international ship registration system and offshore duty-free tax policy have encountered difficulties, Zhang Ai'guo, director of the DFTP Administrative Commission, was quoted by the report as saying.

"We urgently hope to set up a free trade port zone in Dongjiang. It is an extension of the central government's policy and will also help push ahead the pilot reform," Zhang told xinhuanet.com.

The report also said Tianjin municipal government has made "transforming the DFTP into a free trade port zone" a key task for this year.

A member of staff at the DFTP Administrative Commission declined to comment when reached by the Global Times Tuesday, saying they will release the information when it is ready.

As well as Tianjin, other regions are also reportedly applying to set up free trade zones, the xinhuanet.com report said, including Shenzhen in South China's Guangdong Province, Southwest China's Chongqing, and Qingdao in East China's Shandong Province.

The 21st Century Business Herald reported Tuesday that Guangdong has drafted a preliminary plan to set up a free trade zone in the province and is awaiting an evaluation by the Ministry of Commerce before the plan is submitted to the State Council for approval, citing an anonymous source.

Inquiries sent to the Ministry of Commerce for comment were not responded to by press time Tuesday.

"The local governments are keen to set up a free trade zone in their jurisdiction because they want to benefit from more favorable policies from the central government," Yu Fugong, director of the Economics Research Department at the Party School of the Communist Party of China Guangdong Provincial Committee, told the Global Times Tuesday.

Free trade zones could also offer a breakthrough for deeper reforms, Yu noted.

However, "regions should not simply follow in the footsteps of the Shanghai free trade zone, but rather cultivate their own advantages to maximize the benefits they could get if they are approved," Yu said.

In August, the State Council, the country's cabinet, approved the establishment of a pilot free trade zone in Shanghai in order to advance financial reform and raise the level of opening-up in the market.

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