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China / Society

China to ease investment rules in free trade zones

(Xinhua) Updated: 2014-12-28 22:07

BEIJING - The Chinese government has been authorized to ease investment rules in three new free trade zones (FTZs) after top legislature gave the go ahead during a bi-monthly meeting on Sunday.

The new zones will be located in south China's Guangdong Province, southeast China's Fujian Province and north China's Tianjin Municipality. The only FTZ currently operating is in Shanghai.

The resolution on temporary adjustment of regulations for administrative approvals in the new FTZs was passed through a vote at the bi-monthly session of the National People's Congress (NPC) Standing Committee.

According to the resolution, foreign companies will not need government approvals to set up ventures in these FTZs, shut down and merge ventures or change their business purpose. Instead, they will only need to report business plans to the authorities.

These preferential policies conflict with 12 articles out of four laws on foreign companies, Sino-foreign joint ventures and Taiwan investors so the legislature authorized the State Council to adjust the implementation in the FTZs.

The temporary adjustment will begin in March next year and will last for three years, according to the resolution.

After three years, the State Council will run an assessment on the adjustment and decide whether to propose a law revision or return to the original regulations.

Earlier this month, the State Council announce that China will establish three new FTZs and expand the Shanghai FTZ, in an attempt to reform the administrative system and improve the market environment.

Since the launch of the Shanghai FTZ in September 2013, the government has used it to test a number of new policies including negative list management on foreign investment, preferential trade and financial policies, and opening up more industries to foreign investors.

"The practice [in Shanghai FTZ] can be copied and applied elsewhere," said Commerce Minister Gao Hucheng, when explaining the draft resolution on behalf of the State Council to lawmakers on Friday.

Through the expansion of the Shanghai FTZ and the addition of new zones, reform policies can be tested in a larger geographic area and on a bigger scale, he said.

According to the resolution, the Guangdong FTZ, with a total area of 116.2 square km, will include zones in the cities of Guangzhou, Shenzhen and Zhuhai.

The Tianjin FTZ, with a total area of 119.9 square km, will consist of three sections around the Tianjin Port, Tianjin Airport and the Binhai New Area industrial park.

The Fujian FTZ, with a total area of 118.04 square km, will include industrial areas in the provincial capital of Fuzhou, the city of Xiamen, and Pingtan, a new industrial park targeting Taiwan investment.

An area of 91.94 square km will also be added to the Shanghai FTZ.

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