Shanghai free trade zone, the first one in China, was set up in 2013. Photo: Xinmin Evening News

The Chinese government on Monday approved the establishment of three pilot free trade zones (FTZs), in Beijing and Hunan and Anhui provinces, bringing the number of such zones in the country to 21.

The decision will help the world’s second-largest economy facilitate its reform and opening-up process and achieve high-quality growth. It also shows China’s determination to further develop in the areas of digital economy, high-end manufacturing and regional integration, and to ensure the safety and stability of its industrial and supply chains.

China set up its first FTZ in Shanghai, the largest commercial city in the country, in 2013 in a bid to attract more foreign investment and promote trade and regional integration. Until last year, China had set up 18 FTZs, including those in the coastal provinces of Fujian and Guangdong and the inland provinces of Shaanxi and Sichuan.

Authorities also decided to expand the Zhejiang FTZ by setting up three new pilot zones there, according to the State Council plan released on Monday.

Currently, all coastal provinces and all four municipalities have set up FTZs.

The latest move to set up new FTZs and expand the Zhejiang one showed China’s efforts to further open up its economy despite the Covid-19 pandemic and rising unilateralism in the world, said Wei Jianguo, vice-chairman of the China Center for International Economic Exchanges.

The country will continue to strengthen its global ties to boost its strong domestic market, Wei said. The FTZs would play an essential role in it.

Special mission of Beijing FTZ

According to the development plan, the newly added FTZ in Beijing will occupy 119.68 square kilometers, including a science and technology innovation area, an international business service area and a high-end industrial area. Its special mission is to become “a pioneering zone for expanding and opening up the service industry and a digital economy pilot zone.”

Local media reported that Beijing FTZ will also help build a high-level opening-up platform for the coordinated development of Beijing, Tianjin and Hebei.

Yang Jinbai, vice-mayor of Beijing, said on Monday that the capital will encourage technology transfer by offering tax benefits and encourage leading digital enterprises and industrial alliances to set up development funds to attract local and foreign digital companies to move to Beijing.

Yang said Beijing will push forward the securitization of intellectual property assets including patents, trademarks and copyrights, lower the financing costs for technology firms, promote the applications of new technologies in the city and attract talent by improving its housing and education policies.

One industry, one park and one corridor

The Hunan FTZ will occupy 119.76 square kilometers in Changsha, Yueyang and Chenzhou. It targets to achieve its “one industry, one park and one corridor” strategies.

The “one industry” strategy refers to the building of a world-class advanced manufacturing cluster.

The “one park” strategy refers to the establishment of a pioneering zone for deep economic and trade cooperation between China and Africa. The zone will set up a center to distribute and process natural resource products from Africa, a public service platform for China-Africa economic and trade cooperation and a pilot project to upgrade its financial services for African customers. This “Hunan model” will demonstrate how a Chinese province can push forward economic and trade co-operation with Africa.

The “one corridor” strategy refers to the formation of an international investment and trade corridor connecting the Yangtze River Economic Belt and Guangdong-Hong Kong-Macao Greater Bay Area.

The Anhui FTZ will occupy 119.86 square kilometers in Hefei, Wuhu and Bengbu. It will fully dock the Shanghai-Jiangsu-Zhejiang Pilot FTZ, speed up the construction of customs clearance facilities and explore synergic developments with the Yangtze River Delta Pilot FTZ.

The expanded Zhejiang FTZ will measure at 119.5 square kilometers in Ningbo, Hangzhou and Jinyi.

Valuable experiences

During the first seven months of this year, more than 90 billion yuan (US$13.18 billion) of foreign capital was utilised in 18 pilot FTZs with their import and export volume reaching a total of 2.7 trillion yuan. More than 3,300 foreign-funded enterprises were set up during the period.

“The combined area of 18 FTZs is less than 0.4% of China’s territory but these FTZs handled 16.8% of foreign investment and 13.5% of foreign trade of the country,” Deputy Commerce Minister Wang Shouwen said. FTZs have helped stabilize China’s foreign trade and investment, Wang added.

Over the past seven years, the 18 FTZs have accumulated a lot of valuable experiences, 260 of them can be replicated and promoted in other places, Wang said. These experiences included the relaxation of trade and investment rules, the use of financial resources in real economy and the change of government functions.

They would help transform governance concepts, improve the business environment and stimulate the vitality of the markets in China.

The story was first published at It was translated by Nadeem Xu.

Xu Yuenai

Xu Yuenai is a Beijing-based columnist specializing in international relations.