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One Belt One Road, FTZ plans go hand in hand

2015-02-26 13:08 Global Times Web Editor: Qin Dexing

Authorities deploying resources to foster trade promotion, investment goals

The One Belt One Road initiative - an investment and trade promotion scheme intended to deepen economic connections between China and the rest of the world - has become a cornerstone of the central government's policy agenda since first being put forward by Chinese President Xi Jinping in 2013.

In November, the Central Leading Group on Financial and Economic Affairs - an inner group of the Central Committee of the Communist Party of China and the core division of China's economic policymaking - proposed top-level designs for the One Belt One Road plan in order to accelerate the construction of its two constituent initiatives: the Silk Road economic belt and the 21st century maritime Silk Road.

Later, on February 1, the central government-level group held a conference in Beijing intended to promote the One Belt One Road strategy by outlining a series of major issues and follow-up points.

According to media reports, the central government is possible to begin specific planning concerning the strategy soon after this year's National People's Congress and Chinese People's Political Consultative Conference, which are to be held in March. This planning will reportedly cover a number of areas, including infrastructure, trade and industry shifts.

With top-level blueprints now complete, the central government's next step will be to put the policy resources in place to foster the initiative.

Specifically, the development and promotion of free trade zones (FTZs) is expected to serve the government's goals. Assistant minister of commerce Wang Shouwen said earlier that the central government will promote a tie-in between the FTZ strategy and One Belt One Road plans. Wang also disclosed that the central government has been studying the FTZ strategy's potential application in 65 countries covered by the One Belt One Road initiative.

FTZs can remove impediments to commerce and facilitate currency circulation. Such functions are consistent with the main objectives of the One Belt One Road strategy, which after all is to cement trade and economic links between countries. The importance of such connections has been stressed by President Xi on several occasions. Since September 2013, when President Xi first publicly discussed the Silk Road economic belt concept during a visit to Kazakhstan, Xi has proposed greater interconnectivity between national policies, commercial interests, currency circulation and the aspirations of the common people.

In November, President Xi stressed at the Asia-Pacific Economic Cooperation (APEC) CEO Summit that China is willing to cooperate with all countries in the Asia-Pacific to promote the One Belt One Road strategy and boost the development and prosperity of the region.

On a practical level, the central government has issued a series of policy documents to support its vision. For example, the State Council said in a document issued in early February that all regions should strengthen customs cooperations with countries involved in the One Belt One Road strategy. This measure can accelerate reforms of customs clearance procedures, which in turn will support the development of FTZs.

The State Council also said in a document issued in the same time that all regions should pursue service trade cooperation agreements with countries affiliated with the transnational scheme. Such agreements can facilitate the construction of FTZs by accelerating the opening up and development of the cross-border services trade.

In the meantime, local governments have accelerated the construction of their own FTZs so as to support the central government's grand strategy. The Xinjiang Uyghur Autonomous Region, the Guangxi Zhuang Autonomous Region, Gansu and Shaanxi provinces have all announced that in 2015 they will apply with central authorities to establish their own FTZs.

Previously, plans for such zones have come mainly from China's coastal areas, including Shanghai, Tianjin as well as Fujian and Guangdong provinces. It is very likely that China's next batch of FTZs will be born in the country's interior, providing new platforms and opportunities for these areas to connect with the larger world.

Aside from the construction of FTZs, it can be expected that in the future more policy resources will be deployed to support the One Belt One Road strategy, such as the Silk Road Fund and the Asian Infrastructure Investment Bank.

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