Seven more provinces will get FTZs with local characteristics
China is showing its resolve to pursue further opening-up and trade liberalization by giving the green light to seven more Free Trade Zones (FTZs) in inland provinces ahead of the 11th G20 Summit.
Minister of Commerce Gao Hucheng was quoted in an exclusive interview with the Xinhua News Agency as saying on Wednesday that provinces including Northeast China's Liaoning, East China's Zhejiang, Northwest China's Shaanxi and Central China's Henan will be added to China's FTZ club, taking the total number of zones to 11.
It is the first time that FTZs have been approved for inland regions.
The first FTZ opened in Shanghai in late 2013, followed by zones in South China's Guangdong Province, East China's Fujian Province and North China's Tianjin Municipality, which were approved in April 2015.
"The newly approved zones in the inland regions, which will serve larger areas, will not only further deepen reform and opening-up in China, but will also have their own characteristics to boost local economic development," Wang Danqing, a partner with Beijing-based consultancy ACG Management, told the Global Times Thursday.
According to Xinhua, the FTZ in Liaoning will focus on enhancing the competitiveness of Northeast China. That area is set to play a key role in advancing China's trade and economic cooperation with Russia, Japan and South Korea.
Data from the National Bureau of Statistics showed that GDP growth in the province was the nation's slowest in the first half of 2016, reaching -1 percent.
As for Shaanxi and Henan, the central government has positioned the two -provinces as major stops on the "One Belt, One Road" initiative network.
The FTZ in Shaanxi is expected to explore new ways of communication and economic cooperation with overseas countries and regions along the network, taking a leading role in the growth of Northwest China.
Xinhua did not unveil timetables for the establishment of the seven new zones.
Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said the announcement is "a clear signal" to countries and regions whose leaders are scheduled to participate the G20 Summit in Hangzhou, East China's Zhejiang Province, this weekend.
"China wants to show other countries' leaders ahead of the G20 event that it strongly supports trade liberalization and is determined to advance opening-up in the country," Bai told the Global Times on Thursday.
A survey of companies in the Shanghai FTZ conducted by the Development Research Center of the State Council found that 82 percent believe the business environment in the zone has greatly improved and 92 percent are optimistic about its prospects.
To further improve conditions for trade and investment, the State Council, China's cabinet, in July announced it would allow freer market access for foreign investment to sectors like car batteries, steelmaking and shipping.
The top priority for Chinese authorities is how to avoid potential internal competition among the zones while extending the success of the Shanghai FTZ, said Bai. For example, both Liaoning and Tianjin conduct trade with South Korea.
There are also some doubts among foreign businesses over whether the Chinese government can really meet promises involving liberalization in the zones, the South China Morning Post reported on Thursday.
In Shanghai, local companies are allowed to use their accounts in the zone to borrow money offshore, but the yuan is not fully convertible in any of the FTZs yet.
Not all the zones are ready for financial liberalization, and authorities need to be prudent to guard against hot money flows through the zones into China's financial system, said the analysts.
According to Xinhua, Gao said that risk control will remain a major task in the zones.