China's inland provinces consider feasibility of building free trade ports after Hainan plan

The island of Hainan Photo: Xinhua

Since the Chinese government announced in April plans to build a free trade port in the southern island province of Hainan by 2025, the country's inland provinces have sought opportunities to be a testing ground for the free trade port system, which is described as a new type of economic zone featuring a higher degree of openness in market access, trade, investment and personnel exchange.

Different from Hainan, which has advantages in geographic feature, seaport infrastructure and preferential tax policy in its efforts to become the location of the free trade port, inland provinces including Sichuan and Shaanxi have made in-depth researches on the feasibility of building free trade ports by virtual of their superiority in aviation, rail and road infrastructure.

The Sichuan Provincial Office of the Pilot Free Trade Zone announced in a statement in May that it is exploring ways to build a world-class inland free trade port, which is based on its huge infrastructure network of airport, railway and waterway. Meanwhile, the construction of a 2.0 version of the Sichuan Pilot Free Trade Zone is also in the pipeline, which the Office said will spearhead the country's opening up initiative, according to the statement.

The announcement came months after the Chengdu Shuangliu Pilot Free Trade Zone organized a seminar, where experts affiliated to the government agencies and academicians exchanged views about the possibility of creating a free trade port in Chengdu, the capital city of Sichuan province.

Earlier this year, the Airport New City of Xixian New Area, which is located in Xianyang in central China's Shaanxi province, also held a similar seminar which was attended by leaders of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce and experts from Shaanxi's universities. The attendees gave constructive suggestions on the Airport New City's plans to build a free trade port.

Experts analyze that the geographic advantage of getting closer to Europe and the mature air and ground transportation system could help these inland provinces strengthen trade and economic ties with European countries, as China is touting the Belt and Road Initiative globally.

The attempts of building free trade ports in the inland provinces would offer an opportunity for them to catch up with the developed coastal parts, said Huo Weidong, a free trade zone expert from Southwestern University of Finance and Economics, during an interview with yicai.com, a business news website in China.

On the global perspective, a free trade port simplifies the import procedures by adopting the offshore trade mode, under which goods enter the free trade port do not need customs clearance.

The enthusiasm of creating free trade ports among the inland provinces is largely inspired by a report that Xi Jinping delivered to the 19th National Congress of the Communist Party of China which was held in Beijing in October 2017. In the report, Xi, general secretary of the Party, said that the pilot free trade zones will be given bigger rights to conduct reforms and to explore ways to building free trade ports.

Currently, China has 11 pilot free trade zones respectively in the cities of Shanghai, Tianjin and Chongqing and the provinces of Liaoning, Zhejiang, Fujian, Guangdong, Shaanxi, Henan, Hubei and Sichuan.

At the present time, the central government has an overall arrangement about the creation of free trade ports in other parts of the country.

Beijing's April decision of establishing its first free trade port in Hainan actually dealt a blow to Shanghai, which was picked as an experimental field for free trade port in a scheme released in March 2017. Some experts say that the selection of Hainan as the free trade port location is in line with China's maritime strategy and reflects the island's role in realizing the blueprint for the 21st Century Maritime Silk Road.


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