Pingtan in southeast China’s Fujian province, one of China’s free trade zones (FTZs), is well set to attract more business, with new preferential policies announced on July 15.
The local customs office has put forward 22 new measures, including fast clearance for Taiwan merchants doing businesses in Pingtan, preferential clearance for perishable goods and online cargo registration.
The General Administration of Quality Supervision, Inspection and Quarantine also introduced 20 new measures, delegating more power over agricultural imports to its local branch.
Pingtan became a special customs zone of the Chinese mainland a year ago, featuring tax-free Taiwan products and special rules on importation of vehicles from the other side of Taiwan Straits.
“During the past year, 414 companies were registered in the Pingtan FTZ thanks to tax breaks, nearly quintupling the previous number of registered companies,” Zhou Yunguang, head of Pingtan customs, told Xinhua.
The preferential policies in the FTZ have helped companies save up to 510 million yuan ($ 83 million) in total taxes last year, said Zhou.
Pingtan is an island 126 kilometers from Taiwan, a bridgehead in cross-Strait cooperation and crucial to the Belt and Road initiative.
The Belt and Road initiative refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road and was proposed in 2013 with the goal of reviving ancient trade routes between Asia and Europe. The network passes through more than 60 countries and regions, with a total population of 4.4 billion. Those areas accounted for more than a quarter of China’s total exports and about a fifth of its outbound direct investment in the first five months of 2015, according to the Ministry of Commerce.
During the January-May period, Chinese companies signed contracts worth $25.1 billion for more than 1,000 projects in the Belt and Road region, a rise of 19.1 percent year-on-year.
Pingtan is part of the FTZ in Fujian -- with two others in Tianjin and Guangdong, respectively -- unveiled in April this year, 18 months after the first FTZ was launched in Shanghai.
Officials expect the three new FTZs will further boost economic reform, promote trade and facilitate investment in new areas, as the world’s second largest economy moves away from its unsustainable export-dependent model.
“Customs clearance in Pingtan is fast and efficient. The same procedure used to take me 30 percent more time,” said a man surnamed Bai, a businessman from Taiwan selling products for babies.
Different form the other FTZs, the Pingtan zone is focused on trade with Taiwan. However, all zones must adhere to the negative list approach, which details 122 prohibited or restricted areas for foreign investment, ranging from Internet news services, production of radio and television programs to non-ferrous metal mining. This number has been reduced from 139.
Foreign investors are subject to the same rules and regulations for new investment as domestic firms.
Zhang Shuyu, a finance researcher with the University of International Business and Economics, said the FTZs could be key “supporting points” for the Belt and Road initiative.
“More such zones and opening-up policies are needed in central and west regions,” Zhang said.
Wang Shouwen, assistant minister of commerce, has said that the new zone will not just copy the Shanghai version but will break fresh ground in areas such as investment administration, trade regulation and financial systems.
The FTZ fever has caught the attention of officials across the country, with many pushing for their regions to be included in the next batch of FTZs.
Dragged down by a housing downturn, softening domestic demand and unsteady exports, the once sizzling economy has entered a “new normal” of slower but efficient growth.
China’s second-quarter GDP expanded 7 percent year-on-year, unchanged from the first quarter, the National Bureau of Statistics announced on July 15.