The Beijing municipal authorities are accelerating development of the city’s “two zones”, introducing a series of business-friendly policies and continuing the city’s opening-up to the outside world. The “two zones” refer to the pilot free trade zone (FTZ) and the national comprehensive demonstration zone for expanding opening-up in the services sector. In 2015, Beijing became the only pilot city in the country to open the services sector wider, and in 2020, the central government offered support for the capital to become a national comprehensive demonstration zone for the opening up of the services sector. The China (Beijing) Pilot Free Trade Zone was officially unveiled in September. Against this background, many policies have been formulated to encourage innovation and entrepreneurship, advocate financial opening-up and attract talented individuals to the zone. Among the 251 policies for developing the “two zones”, 140 policies had been implemented by the end of March, including 12 pilot policies.
Among local enterprises benefiting from such policies is Aircraft Maintenance and Engineering Corp (AMECO) at Beijing Capital International Airport, which makes good use of the city’s new facility for one-day Customs clearance in comprehensive bonded zones. Some airline companies outsource their engine maintenance. But maintenance enterprises on the Chinese mainland have to send engines to Hong Kong and then import them back again to claim tax exemptions or refunds – a process which is time-consuming and involves risks during transport. To tackle this issue, the tax department and local government put forward a Customs-clearance policy for tax exemption, offsets or refunds in comprehensive bonded zones, and it has already been implemented in the Tianzhu comprehensive bonded zone in Beijing’s Shunyi district. Han Keping, Deputy General Manager of the Finance Department at AMECO, said: “Since the policy was launched, AMECO has saved about CNY8 million in engine maintenance freight rates, and the maintenance cycle has been shortened by over 400 days.”
Favorable policies are also implemented in other sectors. In the financial sector, an RMB international investment-and-loan fund has been approved in Beijing. In the medical sector, the first eight pilot hospitals in Beijing providing medical services for foreigners are offering real-time settlements with international insurance companies. Foreign employees also benefit from simplified procedures to apply for Chinese work visas. Set up in July 2020, the Chaoyang district-based one-stop platform was one of the landmark features of the “two zones” policies, integrating 120 services of 19 functional departments, with applications for foreigners’ work and residence permits handled in one place.
Zhuang Rui, Professor at the University of International Business and Economics, said the experiences in the pilot free trade zone could be shared with the whole country. The policies have drawn many multinational companies to Beijing, including UBS Securities – the first foreign-funded securities institution in China – as well as a wholly-owned subsidiary of Fitch Ratings of the United States and a wholly-owned entertainment unit of Japan’s Avex Group.
According to the Beijing Municipal Commerce Bureau, the city got off to a flying start in utilizing foreign capital in the first quarter. A total of 379 new foreign-funded enterprises were established, representing a year-on-year growth of 36.3%. Contracted foreign investment reached USD9.63 billion, up 1.3 times year-on-year. The actual utilization of foreign capital was USD4.94 billion, up 32.7% year-on-year. The 2021 China International Fair for Trade in Services will be held in September in Beijing, local authorities said. The ongoing Covid-19 pandemic has not hindered the pace of China’s further opening-up to the outside world, the China Daily reports.
The Standing Committee of the National People's Congress (NPC) last week also enacted a law to make Hainan province a world-class free trade port. Hainan is China's largest free trade area and the only one that has a law specially written for it. A free trade port system focusing on trade and investment liberalization and facilitation will be “basically established” in Hainan by 2025 and become “more mature” by 2035, according to the master plan. According to Hainan’s Department of Commerce, during the first four months, 592 foreign-invested enterprises were newly established in the province, a 443% year-on-year growth. Actual utilized foreign capital reached USD674 million, up 433% year-on-year.
