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Commodity trade gets fillip
Last Updated: 2017-05-03 17:26 | China Daily
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Liberalization, systemic reforms seen transforming lives of people

The newly launched free trade zone, also known as FTZ, in East China's Zhejiang province is expected to further liberalize trade in bulk commodities.

The China (Zhejiang) Pilot FTZ started operations on April 1. It is one of the seven FTZs built this year.

The coastal Zhejiang province, with a population of more than 55 million, tops all seven new FTZs on the GDP Index, exceeding 4.6 trillion yuan ?($676 billion) in 2016.

"With the launch of the FTZ and three years' development, Zhejiang is trying to explore the commodity investment facilitation, and liberalization of trade, striving to become an important open port demonstration area, an international commodity trade liberalization pilot area and a resource allocation base with international influence in the eastern coastal region," said Liang Liming, vice-governor of the province, at the news conference after the launch.

The 119.95-square-kilometer FTZ zone, located in the island city of Zhoushan and made up of both inland and anchorage areas, is a key part of the country's Belt and Road Initiative and the Yangtze River Economic Belt.

Zhoushan city, formed by 1,390 islands, is the only archipelago city in China. It stands on the most developed area of the Yangtze River Delta and has a rare deep-water shoreline resources, while Ningbo-Zhoushan port has constructed the largest wharf in China.

The FTZ covers three sub-areas.

The Zhoushan offshore sub-area covering 78.98 sq km and the Zhoushan Island north sub-area of 15.62 sq km focus on the oil industry chain-related businesses, while the Zhoushan Island south sub-area of 25.35 sq km focuses on aviation, fishing and marine tourism industries.

Zhoushan had been depending on the "port economy" and the "crossing economy". With the start of the FTZ, it is expected to transfer storage and transportation to value-added processing trade.

"More breakthrough of FTZ policies are underway," Ying Zhongmin, deputy director of the Zhoushan Municipal Development and Reform Commission, told reporters.

The provincial government has identified five major tasks to be accomplished with regard to the FTZ:

1) Bring about a more efficient administration system and reform government functions.

2) Build a fairer market access mechanism and make full use of foreign investment by setting unified standards and enhancing the regulatory system.

3) Focus on oil refueling by scaling up storage capacity, increasing the openness of oil processing industries and boosting trade in oil products.

4) Attract more investment by developing the ore transfer and aviation industries. An international ore transfer base will be established in the area, and Zhoushan's aviation-focused industrial park will hold a Boeing completion and delivery center and supporting industries like aircraft manufacturing and repair.

5) Explore financial innovation, to make it more open to foreign investment and have fewer restrictions on capital flow. Cross-border use of the Chinese currency, and financial services for international cargo ships will be boosted.

Additionally, customs procedures will be eased in the zone in safe and convenient ways to assist foreigners and promote the region's functional integration.

Zhejiang's long-term plan for the FTZ shows the province's determination to make the FTZ an excellent pilot area within the next three years. It will likely benefit trade and investment with a cluster of high-end industries, a good legal environment, all-round financial services, efficient regulations and a strong positive effect on surrounding regions.

The first batch of 12 enterprises announced start of their businesses in the FTZ at the FTZ launch. They comprise oil industry chain-related businesses, aviation, commodity trade and financial companies.

Three weeks later, the State-owned Assets Supervision and Administration Commission of Zhejiang province signed a comprehensive cooperation framework agreement with the Zhoushan municipal government.

Some 21 projects were signed by provincial SOEs and financial institutions to cooperate with the city by investing 31.39 billion yuan.

"Free trade zones reflect China's policy of opening-up and the benefits will mainly lie in the liberalization and facilitation of trade and investment," said Huang Xianhai, vice-dean of the School of Economics at Zhejiang University.

It is expected that the lives of Zhejiang citizens will be positively affected by the FTZ in many ways, according to Huang.

"Cross-border online shopping will be easier and faster. People will have access to cheaper foreign products after the establishment of the zone. And it is foreseeable that more foreign banks will establish themselves in the FTZ, enabling people to manage their money in diversified ways," he said.

For those seeking business opportunities, the expected simplification of administrative procedures and preferential financial policies in the China (Zhejiang) FTZ will attract foreign companies and investors, leading to increased business and job opportunities.

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