China will adopt measures to advance institutional opening-up of pilot free trade zones (FTZs) and free trade ports in accordance with high-level international standards, according to a notice issued by the central government. These steps will help foster a more enabling environment for both domestic and foreign businesses, broaden market access, promote trade facilitation and better catalyze foreign investment. Foreign financial institutions in the pilot free trade areas will be allowed to launch certain new financial services that their Chinese counterparts are permitted to launch. Financial regulatory authorities should decide on granting the application within 120 days, can only withhold permission for valid reasons, and must notify applicants in a timely manner. “These measures will further scale up the country’s trade in services, broaden the channels for foreign financial institutions and investors to participate and thus bring in more capital, technology and advanced experience,” said Dong Zhongyun, Chief Economist at China AVIC Securities.
By creating a level playing field for all market entities, the measures will bring more competition and inject greater vitality into the domestic market. Foreign financial institutions will provide higher-quality and more diverse financial services for Chinese consumers, which will help narrow the country’s gap with developed economies, Dong said. The notice stated that all authentic and compliant fee transfers related to foreign investment should be remitted without delay in the pilot areas. Such transfers include paid-in capital, profits, dividends, interest, capital gains, management fees, proceeds from the sale of investments, and compensation or indemnification received pursuant to law. For senior managers working for foreign enterprises who intend to set up branches or subsidiaries in the pilot areas, the validity of their temporary residence permits will be extended to two years, and their spouses and family members will be entitled to the same duration of stay.
Key industries in the pilot areas will be supported to import remanufactured products on a trial basis. Relevant departments and localities should strengthen supervision, management and inspection in relation to remanufactured products and strictly guard against the import of solid waste, the notice said. Tariffs will be exempted from aircraft, ships and their components that complete temporary outbound repair and are reshipped into the pilot areas. Tariffs will also be waived for goods that will be reshipped out of the country after finishing temporary repair within the pilot areas, the China Daily reports.
