Business
Steady economic growth has become the priority for next year’s major economic tasks, according to the just completed Central Economic Work Conference.
Under the new norm of China’s economic development, the steady growth is not a strong stimulation, but is more related to reform and innovation. Reforming by opening up and making reform the driving force are becoming the major measures to support the steady development of China.
One year after the establishment of the Shanghai Pilot Free Trade Zone, China has decided to build three new free trade zones in South China’s Guangdong province, North China’s Tianjin city, and South China’s Fujian province.
The expansion of free trade zones shows that China is experiencing a new round of high quality openings up and broader reform pilots, which will further improve the standard of China’s economic development and will provide powerful support for continuous and steady economic development. “The proposal of Tianjin Free Trade Zone has been under discussion for more than a dozen times and has still been perfected and while steadily improving. Based on the experience from the Shanghai Free Trade Zone, Tianjin will take the city’s and especially the Binhai New Area’s regional development and opening up features into consideration,” said Liu Enzhuan, a member of the Tianjin Free Trade Zone proposal drafting team and the executive head of the Tianjin Free Trade Research Institution.
Months ago, although the Tianjin Free Trade Zone project had not yet been approved by then, departments had already improved their efficiency to meet the requirement of free trade zones.
Continuously establishing regions for investment and service trades will become Tianjin’s major attack areas after the approval.
According to the executive meeting of the State Council, relying on the existing new areas and free trade zones, three such zones will be launched in Guangdong, Tianjin, and Fujian, whose main body will refer to the Shanghai Pilot Free Trade Zone and will also integrate regional features and implement new piloting contents.
“With the expansion of free trade zones and innovative areas, residents from the regions will enjoy more diversified advantages directly or indirectly,” said Xiao Yaofei, a professor at Guangdong University of Foreign Studies.
The new free trade zones will have different focuses on enforcing financial reform, servicing industrial reform, and investment and trade reform. In time, the free trade zones will interact with trades, skilled people, and visitors in nearby regions and will also represent and highlight regional features.
According to analysts, the advantages from this mechanism will bring about great economic stimulation effects. Relying on the premium geographical advantages and the ability to align with traditional industries, rapid developments will not only be found in foreign trade in provinces along the coast, but also in industries such as education, medication, and old-age care.
“The new monitoring model of the free trade zones is beneficial to cutting the cost of distribution, sales, and operation of enterprises. Extending from a dot to a full surface, the free trade zone is expanding from Shanghai to more regions, serving as a great driving force for foreign trade,” said Zhang Qi, vice director of the overseas economic research department of the Development Research Center of the State Council.
Zhang added that driving foreign trade is helpful to realize the goal of China’s steady growth. Li Zhijian, the president of the Asia-Pacific Innovation Economic Research Institute of Guangdong, said that driven by free trade zones, many undeveloped social service industries, such as education, medication, and social security, will get opportunities to develop rapidly.
Take old-age care for example: although under a preferential framework called the Closer Economic Partnership Arrangement (CEPA), the old-age care industry had been limited by the influential and advanced old-age care system and mechanism of Hong Kong.
Therefore, old-age care development had not been implemented completely and comprehensively in Guangdong province. Thanks to the establishment of Guangdong’s Free Trade Zone, the limited situation will be changed.
"People can choose businesses that are launched in the free trade zones to enjoy more premium and convenient old-age care. This is a predictable outlook and also a stimulation and driving force for an existing industrial structure," said Li.
The expansion of free trade zones will also bring more career opportunities for high-end talents. Some professionals from enterprises and some experts thought that compared with the Shanghai Pilot Free Trade Zone’s developing exploration in attracting, communicating, and cooperating with high-end talents, the three newly established free trade zones have greater advantages in this industry.
Take Guangdong Free Trade Zone as an example, being geographically and culturally close to Hong Kong, Macau, and Taiwan, Guangdong Free Trade Zone is more attractive in the eyes of high-end professionals from its neighborhood.
"After the expansion of free trade zones, different places start to explore in different industries according to their own advantages. The exploration in different industries and regions is beneficial to realize a higher standard of opening up and will provide a stronger drive force for reform," said Zhang.
Zhang expects the reform to be driven by opening up and the transition of government functions, ideas, and related systems in a high standard opening up process.
Mei Xinyu, a researcher of International Trade and Economic Cooperation in the Ministry of Commerce, explained that the expansion of free trade zones is an important reflection of China’s deep reforms and opening up standards and contents of a continuously improving economy.
Although the cost of production and payment is improving, and the cost of distribution and sales is declining, China can still maintain – and even improve – its competency through simplifying government administration, giving more power to local governments, and improving service efficiency.
Mei also considered the free trade zones to be a comprehensive trial in the global economic competition. On the one hand, free trade zone reforms will improve public services, motivate the innovative energy, and maintain the driving force of sustainable development, which will prove that China has the ability to go through the challenges of high standard economic competition.
On the other hand, China can rely on the most advanced and innovative opening-up economy –the Shanghai Pilot Free Trade Zone to actively be involved in the formulation of international trade regulations, which will push forward China’s transformation from mere bystanders and followers to participants and leaders.
