All sectors expect the Shanghai Pilot Free Trade Zone to continue expanding its opening up, and China's opening up will bring dividends to the world
In the past decade, the Shanghai Pilot Free Trade Zone has achieved remarkable results in relaxing market access and creating an open development environment for the free flow of talents, capital and other factors. A number of national pioneering projects have been implemented in 60 open fields, including automobile manufacturing, financial services, medical services, tourism services, value-added telecommunications, testing and certification, and credit rating. Looking towards the future, how will the Shanghai Pilot Free Trade Zone practice a higher level and greater degree of opening-up to the outside world? How will it represent China and better participate in global competition?
At the theme forum and open theme sub forum for the 10th anniversary of the construction of the China Pilot Free Trade Zone held on September 20th, attending experts and business representatives discussed the 10-year opening practice of the Shanghai Pilot Free Trade Zone and put forward constructive suggestions for promoting institutional opening.
The negative list is getting shorter and shorter, and companies are enjoying the dividend of openness
In 2013, the Shanghai Pilot Free Trade Zone formulated and issued the first negative list for foreign investment access. After 7 rounds of reduction, the number of special management measures items was reduced from the initial 190 to the current 27, achieving zero manufacturing items, continuous expansion and opening up of the service industry, and continuous improvement of investment liberalization level.
In the view of Zhou Hanmin, a member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference, former Vice Chairman of the Central Committee of the Democratic Party of China, and former Vice Chairman of the Shanghai Municipal Committee of the Chinese People's Political Consultative Conference, one of the most remarkable achievements of the Shanghai Pilot Free Trade Zone in response to major international regulatory challenges in the past 10 years is the introduction of a negative list management system. "Negative list management refers to the access management measures for foreign-invested enterprises. China has only selected 190 prohibitions or restrictions from the 1069 categories of the national economy, indicating to the world that China's reform has only moved forward and has not regressed. The seven reductions in the next 10 years are a world precedent."
What changes will the negative list bring to foreign investment? Zhou Hanmin said that when China first joined the WTO in 2001, there were restrictions on equity ratios for investment in the financial sector, and now the negative list has been lifted. In January of this year, Schroder Fund Management Co., Ltd. was approved by the China Securities Regulatory Commission for establishment, becoming the fourth newly established foreign-owned public fund management company in the country. At present, all four foreign-owned public fund management companies approved for establishment nationwide have settled in the Lujiazui Financial City, which has become the most concentrated area for well-known overseas asset management institutions to establish wholly-owned subsidiaries in China. In addition, the first foreign-funded wholly-owned securities company and the first foreign-funded insurance holding company in China have also settled in the Shanghai Pilot Free Trade Zone.
Meiankang Quality Testing Technology Co., Ltd. was established in July 2015. Thanks to the revised negative list in 2014, the Shanghai Pilot Free Trade Zone added 31 measures to expand its opening-up to the outside world, including lifting restrictions on foreign-invested import and export commodity certification companies and qualification requirements for investors. The company settled in Jinqiao, Pudong in just half a month, becoming the first foreign-funded certification institution after the expansion of the Shanghai Pilot Free Trade Zone.
The reporter learned that in the 10 years since the construction of the Shanghai Pilot Free Trade Zone, a total of 4669 enterprises have expanded and opened up projects, accounting for one-third of the total number of newly established foreign-funded projects. In the service industry, more than a thousand projects have been implemented in fields such as financing leasing, online retail, and engineering design, attracting a group of leading enterprises in medical services, value-added telecommunications, international ship management, and vocational skills training. In terms of manufacturing, a number of leading projects such as Tesla and Fincantini have been introduced in advanced manufacturing fields such as new energy vehicles, aircraft manufacturing, and yacht design.
Is it possible to further compress the negative list and promote the opening up of more fields in the next step? Zhou Hanmin said that this is completely hopeful. For example, in the field of biomedicine, where everyone is very concerned, companies hope to further shorten the approval time and simplify the approval process. In addition, the requirements for open development in the seed industry also need to be reflected in the negative list.
Breaking through institutional openness will boost the confidence of foreign enterprises in investing in China
Over the past 10 years, China's open economy, represented by the Shanghai Pilot Free Trade Zone, has made significant progress in the fields of goods trade and modern service trade. How can we move towards a higher level and greater degree of openness to the outside world? In June of this year, the State Council deployed pilot projects in free trade pilot zones and free trade ports with conditions to connect with international high standards and promote institutional openness. "This is because our opening up has encountered institutional bottlenecks, and insufficient opening up can lead to sluggish reforms, hindering the full potential of China's development. Therefore, we urgently need to find a breakthrough," said Yi Xiaozhun, former Deputy Minister of Commerce and former Deputy Director General of the World Trade Organization.
He pointed out that in the current economic situation, adhering to promoting institutional openness will boost the confidence of multinational corporations in investing in China, which is a strategic measure to improve the external economic environment. The Volvo pilot "remanufacturing" is a typical example.
In September of this year, the first "pilot import of remanufactured products from key industries" in China successfully cleared customs. This is a remanufactured engine imported by Volvo Construction Equipment Co., Ltd. for articulated off-road dump trucks. Prior to this, China managed imported remanufactured products according to old mechanical and electrical products at the policy level. After the State Council issued the "Several Measures for Pilot Connection with International High Standards and Promoting Institutional Opening in Conditional Free Trade Pilot Zones and Free Trade Ports", and with the guidance and assistance of government departments such as the Pudong New Area Commerce Commission and Shanghai Customs, Volvo Construction Equipment took the lead in completing the pilot filing, becoming the first enterprise in the country to successfully carry out the pilot business of remanufacturing product import in key industries.
"The smooth import of remanufactured parts can not only help fill the product gap in the domestic market, increase sales and market share, but also steadily enhance the business development scale of our Volvo China remanufacturing center, reduce costs, expand the market, and increase sales. After the initial agreement was reached, production costs further decreased, and market competitiveness significantly improved." said Guo Tengze, President of Volvo Construction Equipment Asia.
Yi Xiaozhun further suggests that the administrative authorities should grant greater reform autonomy to the pilot free trade zone, allowing breakthrough pilot projects in terms of rules, systems, standards, and other aspects against high standard economic and trade agreements such as CPTPP and DEPA. "The next step for the Shanghai Pilot Free Trade Zone is to focus on key and difficult areas such as state-owned enterprises, government procurement, digital trade environment, and labor clauses, identify weaknesses and boldly try and make independent improvements. Institutional opening up is a process of crossing the river by feeling the stones. As long as the overall direction is well grasped, even if there are some small errors in the exploration process, the risks are controllable and it is not difficult to correct them."
Zhou Hanmin also stated that institutional openness is an important task for the pilot free trade zone to take the lead. At present, the Shanghai Pilot Free Trade Zone needs to benchmark against high standard economic and trade agreements such as CPTPP, and mature opening measures should be implemented as soon as possible; Efforts should be made to advance the achievements that can be picked with just one jump; What needs further preparation, we need to plan ahead and have a schedule, and we cannot delay for too long. "When China 'joined the WTO' back then, there was a debate: whether it was dancing with wolves or a major opportunity? History fully demonstrates that joining the WTO has brought China huge development opportunities. Currently, we also need to do a good job in interpreting and promoting high standard economic and trade agreements, so that the country can walk more steadily on the path of benchmarking accession."
China's opening-up brings global benefits, and cooperation is conducive to sustainable development
On February 16th of this year, Hanling Capital announced the official start of operation of its Shanghai office, which is its sixth office in the Asia Pacific region after Hong Kong, Seoul, Singapore, Sydney, and Japan, highlighting the company's determination to develop its business in the Asia Pacific region.
Xia Mingchen, General Manager of Hanling Investment Management Co., Ltd., stated at the forum that China, as the world's second largest economy and also the largest private equity market in Asia. "We maintain long-term confidence in the development of capital markets and investment opportunities in the Asia Pacific region, and the establishment of our Shanghai office will fully utilize the institutional innovation advantages of the Shanghai Pilot Free Trade Zone to further promote the development of Hanling Capital's business in China and maintain our leading position in the industry."
For the past 10 years, the Shanghai Pilot Free Trade Zone has represented China in global competition and brought opportunities and benefits to global market entities. According to Xie Fengcai, President of Raffles Medical China, in 2021, Shanghai Raffles Hospital located on the front beach of the World Expo obtained a Medical Institution Practice License and officially began operation. When it opened, it became the largest comprehensive foreign-funded medical project in the Shanghai Pilot Free Trade Zone. "Settling in Qiantan is not only to serve foreigners in Shanghai, but also to better integrate into the community and provide international medical services for Shanghai residents living in the Qiantan area. At the same time, it also lays the foundation for Raffles Medical Group to serve the Yangtze River Delta and expand new markets in the future."
Currently, globalization is facing new challenges. The most prominent feature is that developing countries receive far less benefits from openness than developed countries that have mastered cutting-edge technologies such as digital technology and artificial intelligence, leading to increasing inequality. Bai Ruiqian, Executive Vice President and Chief Operating Officer of the International Exhibition and Projects Association, calls for fair and free trade practices. Christopher Pisarides, winner of the 2010 Nobel Prize in Economics, also pointed out at the forum that China has stood at the center of global growth, and science and technology have also achieved leapfrog development. Therefore, China has the ability and responsibility to participate in rule making as a strong negotiator and negotiator in the process of promoting the reconstruction of globalization, allowing globalization to be evenly distributed and reducing the new risks of globalization at present.
Dilma Rousseff, President of the New Development Bank of the BRICS countries, stated that current protectionism is resurgent, and some policies are hindering the economic and technological development of developing countries, affecting the overall well-being of people. The paradigm of global cooperation and dependence is shifting towards conflict and protectionism, bringing restraint to the development of southern countries worldwide. "However, the practice of the Shanghai Pilot Free Trade Zone has shown that the most promising way for southern countries around the world is through cooperation. Everyone should work together to pursue healthy interdependence, inclusive and sustainable development."
