BEIJING, Dec. 5, (Xinhua)--Since operated on April 1, 2017, China (Zhejiang) Pilot Free Trade Zone (Zhejiang FTZ) has planned to establish a free trade port zone, focusing on chain investment facilitation and trade liberalization of oil industry and meeting international standards.
Gathering oil trades and highlighting port advantage
Zhejiang FTZ focuses on three aspects, according to Huang Yisheng, Director of the General Service Center, Zhejiang FTZ Administrative Committee. Firstly, it focuses on implementing FTZ within the area of Zhoushan; secondly, it focuses on building itself into the pilot area of the free trade port zone; thirdly, it focuses on serving business in the whole oil industry chain.
Zhejiang FTZ has operated for more than half a year. It had supplied 1.35 million tons of bonded oil in the first 10 months of 2017, with and increase of 64.24 percent year on year. Following the breakthrough in the policy of oil supply across customs zones, Zhejiang FTZ's oil supplies continued to rise. By the end of October 2017, Zhejiang FTZ had supplied 549,000 tons of oil across customs zones, with an increase of 152.65 percent year on year.
Regarding the future development of Zhejiang FTZ, Zhejiang Province proposes to build "three bases and one center", namely an international oil storage and transport base focusing on oil reserve, an international petrochemical base focusing on Yushan Island Refining & Chemical Engineering Project, an international maritime service base highlighting bonded fuel oil supply and an international oil trade center highlighting oil trade. And it will achieve the goal of "three 100-million tons", namely oil reserves of 100 million tons, a refining capacity of 100 million tons and a trading capacity of 100 million tons.
Since the operation of Zhejiang FTZ, many international oil giants have negotiated with some local oil & gas enterprises on oil warehousing, oil & gas transfer and other issues.
Taking oil as the penetration point of currency internationalization
In recent years, China's role as a world oil buyer has become increasingly important. In 2016, China's oil consumption and imports increased by 150 percent and 550 percent compared to 2001. China's influence in the international oil & gas market is yet to be enhanced, said Liu Jian, General Manager of China National Offshore Oil Corporation (CNOOC).
Oil has a strong financial feature. According to Jin Xuejun, Executive Director of Public Policy Research Institute of Zhejiang University, since oil trade is a highly open field, settlement of U.S. dollar and internationalization of RMB are closely related to oil, which is a penetration point of currency internationalization. "The offshore advantage of Zhoushan is conducive to oil trade, warehousing and financial settlement. In terms of geographical conditions, and its function and orientation given by the country, Zhejiang FTZ focuses on oil trade which is highly global and open. I think it is necessary for Zhejiang FTZ to build a free trade port during its opening", added Jin.
Hangzhou Central Sub-branch of the People’s Bank of China (PBOC) released a document named the Guiding Opinions on Financial Support for the Construction of China (Zhejiang) Pilot Free Trade Zone on November 1st. The document, including 33 opinions and measures, focused on promoting trade, investment and financing facilitation, improving capital utilization efficiency and avoiding the risk of foreign exchange fluctuations, supporting the construction of the oil industry chain, advancing the strategy of RMB internationalization and preventing financial risk.
According to Chen Liang, Assistant Director of Policies and Regulations Bureau of Zhejiang FTZ, the document learns from experience of financial policies adopted by the previous two groups of pilot free trade zones, and provides corresponding financial support for bulk commodity trade and transaction, and oil industry chain construction.
(National Business Daily, edited by Tong Wei)
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