Beijing unveils pilot FTZ focused on digital economy, service industry

Beijing held its pilot free trade zone unveiling ceremony on Thursday morning, three days after the State Council announced one of the three newly-established FTZs in the capital.

Unlike other FTZs in China, the one in Beijing will focus more on the digital economy and service industry, which are based on its advantages on science and technology development and a highly internationalized businesses climate, expert said.

"Beijing's digital economy has been developed well with its added value accounting for more than half of the city's GDP, which ranked at the top among all cities in China," said Liu Yang, research director at the Capital Institute of Science and Technology Development Strategy.

"Thus, Beijing has its capacity to build the digital currency zone and digital finance system."

According to the Beijing FTZ plan, the authority will support the People's Bank of China, the country's central bank, to establish a legal digital currency zone and digital finance system in Beijing. Meanwhile, the bank will form a block chain standardized system in the trade and finance sector.

"It will improve the city's finance service," Liu said. "It also will help to form a reliable credit system and reduce financial risks."

Yang Xiuling, head of the Beijing Bureau of Economy and Information Technology, said the capital plans to build a digital asset exchange that will provide service both domestically and overseas.

"Competition is intensifying among the different countries in the digital sector. We believe Beijing, as the nation's capital and science and technology center, should make its contribution on the matter," she said.

The FTZ also will focus on offering better policies in the service industry, especially in financial service.

In recent years, Beijing has rolled out a series of measures to further open up its financial market, thereby attracting an increasing number of foreign-invested companies. Since 2018, more than 30 well-known foreign financial institutions, including Visa, MasterCard and SWIFT, have opened branches in the city.

According to the government, Finance Street in Xicheng district and the Lize Financial Business District in Fengtai district will be the major demonstration zones for the services sector opening-up in the capital city. Efforts will be stepped up to support innovation in the fintech sector. The plan also includes setting up a national finance technology risk monitoring center.

According to the plan, the pilot FTZ in Beijing will cover an area of 119.68 square kilometers, including three areas for science and technology innovation, international business services and high-end industries.

The three areas will be in the Zhongguancun area, Beijing Central Business District and Beijing Economic and Technological Development Area.