BEIJING, Nov. 20 (Xinhua) -- Shanghai has submitted its plan on building a free port to authorities, reported the Xinhua-run Economic Information Daily quoting frontline builders and experts. The free port is expected to relax control upon the border trade, which may involve removing or minimizing control over commodities’ entry, doing away with customs declaration or duty payments, and lifting restrictions on entrepot trade. At the same time, some offshore industries, such as international financial leasing, are expected to become a highlight of Shanghai’s free port.
No customs declaration or duty payment, no restrictions on entreport trade:
“Shanghai has submitted its plan on building a free port with authorities for comments. Next step Pudong will work with relevant departments on preparation work such as encircling the port area and developing a regulatory platform for the actual implementation,” said Hang Yingwei, head of Pudong New Area and executive deputy director of the Shanghai Pilot Free Trade Zone (Shanghai FTZ) Management Committee.
Shanghai would establish a free port within the special customs control zones, such as Yangshan Bonded Port Area and Shanghai Pudong Airport Bonded Area, according to the Plan for Further Deepening Reform and Opening-Up of China (Shanghai) Pilot Free Trade Zone issued in March this year.
A free port is set up within a country or a region’s borders but outside the domain of the Customs Department, according to Chinese Vice Premier Wang Yang in an article published on the People’s Daily on November 10. “It allows the free flow of commodities, capital and talents, while most of the commodities are exempt of customs duties. Free port has been so far the most open-up special economic function zones all over the world,” said Wang in his article.
There are world-famous free ports located in China’s Hong Kong Special Administrative Region, Singapore, Rotterdam, Dubai and other areas. For example, the free port in Singapore uses an e-system to complete the processing of 99 percent of trade declarations within 10 minutes, thus saving a trade cost of more than one billion U.S. dollars each year.
“In short, a free port is free trade zone within free trade zone,” explained Gu Hongmei, chief of Yangshan customs district, who took part in the development of FTZ. “Compared to FTZs, free ports achieve higher liberalization of frontline management. With IT-based supervision in place, free port will remove or minimize trade controls over commodities entry and simplify border declaration procedures to a greater extent, thereby facilitating the trade,” said Gu.
Opportunities for international financial leasing and other offshore Industries
In the free port, it is also convenient to implement management policies of finance, foreign exchange, investment and entry & exit, which are in line with international practices, so as to create an offshore environment but "within borders”, according to experts. “Many industries with offshore characteristics, such as international financial leasing, international ship registration and international transit, are poised to embrace new development opportunities,” said Gu Hongmei.
“Finance could play an important role in the development of free port by facilitating capital flow, optimizing integrated cross-border capital services featuring local and foreign currencies, innovating in cross-border RMB products and allowing financial institutions to support the free port by innovative overseas financing means,” said Zheng Yang, director general of the Shanghai Municipal Government’s Office of Financial Services.
It is noteworthy that the free port being built in Shanghai, similar to the FTZ, will not serve Shanghai alone but also the overall opening-up strategy of China. It shall have a new mission of joining the construction of the Belt and Road and Yangtze River Economic Belt.
Accelerated development of free ports around the nation:
Moreover, the submission of Shanghai free port plan will be soon followed. So far, Shanghai, Zhejiang, Fujian and Guangdong, among many other places, are reportedly activating or exploring the possibilities of developing free ports.
Addressing a press conference on November 10, Liu Xin, head of Sichuan Provincial Department of Commerce, said that his province would study the possibility of developing an inland free port and making efforts to build an opening-up "highland" in western inland areas, so as to boost the development of a “beautiful, prosperous and harmonious Sichuan”.
Meanwhile, Li Renjun, deputy director of Economic Commission under Hainan Committe of Chinese People's Political Consultative Conference, recently disclosed that Hainan was learning from the free port policies of Hong Kong and Singapore. Li added that they were planning to build a free port to connect with Southeast Asian countries for transport and transit, under the new opening-up framework and that of building Hainan into an international tourism island.
Moreover, Chen Bo, executive director of the FTZ Research Center affiliated with Huazhong University of Science and Technology, has pointed out that free ports could be built in Shenzhen and Nansha, Guangzhou in the future. There was also a possibility of the same in Wuhan, an inland city, Chen added. (Edited by Niu Huizhe,niuhuizhe@xinhua.org)
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