Can the negative list still be reduced? How to benchmark against "highest"? Zhou Hanmin's Suggestions for the Next Development of Shanghai Free Trade Zone
At the 10th anniversary theme forum of the construction of the China Pilot Free Trade Zone held on the morning of September 20th, Jiefang Daily's Shangguan News reporter interviewed 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 People's Republic of China, and former Vice Chairman of the Shanghai Municipal Committee of the Chinese People's Political Consultative Conference.
Can the negative list be further reduced from 190 to 27?
Zhou Hanmin: On September 29, 2013, the Shanghai Free Trade Zone emerged as an effort to address major international regulatory challenges. The most commendable one among them is the introduction of negative list management.
Negative list management is a common term that refers to the admission management measures for foreign-invested enterprises. The negative list mainly consists of two words: prohibition and restriction. Our negative list includes 190 prohibitions or restrictions selected from the 1069 items in the national economic classification. Therefore, we demonstrate to the world that China's reform can only move forward and has not regressed by prohibiting restrictions on 17.6% of the national economy subcategories.
In the past 10 years, a total of eight versions of the negative list have been released, reducing from 190 items to 27 items today. There is no precedent in the world for this, we must fully affirm it. For example, the eighth edition of the negative list in 2021, which introduces two key areas. When China joined the WTO in 2001, the opening up of the financial sector also restricted the proportion of equity, and the negative list was lifted in 2021.
Can the negative list still be reduced? Of course you can. For example, people are now very concerned about the biomedical field. In the past two years, I have conducted research on hundreds of companies, many of which are biopharmaceutical companies. They hope for greater openness in order to save lives, shorten approval time, and simplify the approval process.
For example, in the field of seed industry, we can also further open up. China is one of the world's most important agricultural powers, and we also attach great importance to the modernization of the seed industry. Therefore, the opening up of the seed industry also needs to have new achievements in the negative list.
After 10 years of construction in the free trade zone, it can be condensed into 6 words: trial system and innovative path. Today, the Shanghai Free Trade Zone is further implementing a national trial system, which aims to fully adapt the rules of CPTPP in the Shanghai Free Trade Zone, also known as stress testing. But what is more important is the path of innovation. For free trade zones, it means improving the business environment. The rule of law is the best business environment, so we must continue to move forward on the rule of law.
The highest benchmark is not "dancing with wolves", but can bring huge opportunities to China
Zhou Hanmin: Institutional openness is an important task for the pilot free trade zone to take the lead in experimentation. At present, the Shanghai 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.
This requires us to comply with the system requirements of CPTPP and DEPA. For example, CPTPP emphasizes competitive neutrality and non discriminatory treatment, and we must first implement the principle of national treatment. Secondly, the CPTPP proposes the principle of non commercial assistance, which means that the government should maintain a neutral attitude towards different types of enterprises and not provide biased subsidies, tax refunds, rewards and other assistance measures to a certain type of enterprise. In this regard, our enterprise reform should adhere to three principles - corporatization, marketization, and legalization. Thirdly, the CPTPP emphasizes the principle of transparency, which is also one of the most fundamental principles followed by China during its accession to the WTO. But the current principle of transparency includes data flow issues, so there is a need for new understanding and implementation. Fourthly, in simple terms, it is the principle of equal opportunity. For example, for a project, as long as the bidding documents are released, those that meet the conditions can be shortlisted for competition without the need for additional pre-approval or screening.
As long as we can adhere to the principle, these four requirements are not difficult to achieve. When China joined the WTO, there was a debate about whether it was "dancing with wolves" or a major opportunity? History fully demonstrates that joining the WTO has brought enormous development opportunities to China. Therefore, it is necessary to do a good job in interpreting and promoting high standard economic and trade agreements such as CPTPP, so that the country can walk more steadily on the road of benchmarking and joining.
China's accession to the CPTPP is no less difficult than joining the WTO
Zhou Hanmin: This year marks the 22nd anniversary of China's accession to the World Trade Organization (WTO). China's tremendous achievements since joining the WTO today are due to its adherence to international rules, adherence to international conventions, and close adherence to world development trends. Personally speaking, joining the CPTPP is very difficult, even more so, compared to China's accession to the WTO.
I have three suggestions for this: firstly, coordinate development and security, and establish cross-border data flow rules that are conducive to the high-quality development of digital trade. One is to define the scope of important data, implement a negative list management system, and establish a list directory of national sensitive data. The second is to strengthen international cooperation with CPTPP and DEPA member countries in digital technology research and development, data security, and gradually establish a whitelist system for cross-border data flow, laying the foundation for China to carry out mutual recognition of cross-border data flow rules globally. The third is to focus on the special needs of some special application scenarios, such as digital trade services with two ends outside, and to establish a special international data circulation functional zone in the Lingang New Area pilot based on the international data port.
My second suggestion is to deepen the openness and innovation in the financial sector. For example, financial services that are not provided in our country but are provided within the territory of other countries, as well as financial services that have not been provided in any market, our financial regulatory authorities can pilot the implementation of a consistent internal and external regulatory model for new financial services based on the principles of consistent application conditions, consistent business areas, and consistent management methods.
The free trade account is a major innovation in the Shanghai Pilot Free Trade Zone. I also suggest further optimizing and enhancing the functions of the free trade account to better serve offshore RMB transactions, including simplifying account opening procedures and encouraging eligible economic entities to engage in cross-border investment and financing business.
My final suggestion is to focus on market entities and establish a market-oriented, legal, and international business environment. We need to benchmark against the new evaluation system for the business environment just launched by the World Bank this year, and pay attention to creating a unified, open, competitive, and transparent market environment. Especially in terms of market access, business registration, enterprise operation, and social aspects, we will respect international practices more and focus on introducing a new round of measures around prominent issues in the business environment that foreign enterprises are concerned about.
