Pilot FTZs advancing reform, opening-up

New mission

About 40 years ago, China established special economic zones, which served as windows and testing grounds when the authorities decided to open the domestic market and modernize the country's economy.

Foreign investment flowed in, new regulations were issued and new technologies were tested first in these areas－later spreading to other parts of the country, contributing to the fast growth of China's economy over the years.

Observers see the establishment of pilot FTZs as a new move for China to push ahead reform and opening-up in a new domestic and external environment.

Compared with special economic zones, pilot FTZs aim to achieve mutual benefit and enable the country to participate in global economic cooperation and competition at a higher level, Luo Qinghe, a professor with Shenzhen University, wrote in a research paper.

A raft of measures have been taken for pilot FTZs to create a more investor-friendly business environment in support of fair competition.

The negative list for foreign investment, for instance, has been shortened in pilot FTZs to broaden market access. Over the past five years, the negative list has been shortened from 190 to 45 items in the Shanghai Pilot FTZ.

The Liaoning Pilot FTZ, the only pilot FTZ in Northeast China, upgraded the processes for examination and approval in the port of Dalian to facilitate the circulation of goods, with the cost for customs clearance slashed by 10 percent.

"After introducing pilot FTZs, the competition between local governments has gradually shifted from GDP growth to reforms," said Yin Chen, a researcher at Fudan University in Shanghai.

So far, around 123 measures first tested in pilot FTZs have been gradually promoted and adopted nationwide, and more new reform measures will be made, according to the Ministry of Commerce.