2021 marks the 2nd anniversary of the China (Guangxi) Pilot Free Trade Zone (FTZ). Since its inception in August 2019, the FTZ has benchmarked against advanced international rules and created a new highland of reform that integrates openness and innovation.

With great emphasis placed on international investment, foreign trade, financial opening-up, the maritime shipping economy, modern service industry and the New International Land-Sea Trade Corridor, the region has led the nation in high-quality FTZ development.

Institutional innovation

Targeting ASEAN countries, boosting opening-up along the border, carrying out differentiation exploration and characteristic system innovation, and promoting integrated development of the FTZ together with the New International Land-Sea Trade Corridor provided a blueprint for Guangxi’s leap forward under great changes.

Vigorous reform has led to steady progress in the region. To date, 95 percent of the 120 tasks listed in the overall plan of the Guangxi pilot FTZ have been implemented.

The first 44 autonomous regional-level institutional innovations, such as the cross-border financial reform of the China-Malaysia Qinzhou Industrial Park, the market procurement trade pilot in Pingxiang, and the pilot reform of foreign exchange receipts and payment facilitation were generalized in Guangxi, and 13 of them are national initiative achievements.

Guangxi has also achieved notable results in institutional innovation. Its reform and innovation on the cross-border usage of RMB in border areas was selected among the fourth group of the FTZ’s best practical cases by the Office of the State Council’s Inter-Ministerial Joint Conference on Pilot Free Trade Zones. 

A total of five institutional innovation initiatives in the region have been filed by the General Administration of Customs, ranking second among the 21 pilot FTZs in China.

Such characteristic innovations have injected new vitality into the joint development of the FTZ and the New Western Land-Sea Corridor, resulting in full use of resources in both markets and integrating the FTZ into the new development pattern. 

Industrial development

With its geographical advantages, the FTZ has become a multi-regional opening-up and cooperation platform along the border, accelerated the construction of a cross-border industrial chain targeting the Association of Southeast Asian Nations (ASEAN)countries, guided cross-regional synergetic development in an all-round way, and promoted market expansion, information exchange, resource sharing and industrial coordinated development with its surrounding areas.

In order to further agglomerate leading industries and expand the open economy, the FTZ accelerated the integrated development of advanced manufacturing together with multiple modern service industries in each area, and expedited the construction of ASEAN-oriented industry chains in the fields of cross-border automobiles, electronic information, new chemical materials, specialties from ASEAN countries and traditional Chinese medicine processing, as well as a service chain of finance, logistics and digital economic cooperation.

As of July 31, nearly 40,000 enterprises had settled in the region. The figure has more than decupled since the establishment of the FTZ.

The electronic information industry and technology incubation bases of the region have formed industry clusters such as the China-ASEAN Digital Scientific Innovation Park and the Yunchuang Valley in the Inspur ASEAN Operating Headquarters.

The China-ASEAN Business Center was put into operation and the China-ASEAN Bulk Commodity Trading Platform was promoted. With the investment and completion of several major industrial projects, including the 300,000-ton crude oil terminal in the Qinzhou Port Area and the CNGR project phase I, the construction of a cross-border industrial chain, a service chain and a value chain targeting ASEAN countries and developing Regional Comprehensive Economic Partnership(RCEP) members as well as countries along the Belt and Road has progressed.

In terms of foreign trade and foreign investment, the FTZ has introduced industrial projects such as the bird’s nest peptide extract powder project of Glyken Singapore.

In the first seven months of 2021, the total imports and exports of the FTZ reached 113.6 billion yuan ($17.58 billion), a year-on-year increase of 25 percent, and the actual use of foreign capital saw a 330 percent growth to $260 million.

Business environment optimization 

Guided by the Overall Plan, Guangxi has issued an implementation plan and guidelines for construction of its FTZ. Seventy-odd supporting policies were introduced to improve a social governance pattern and simplify the service flow.

The issuance of Regulations on the China (Guangxi) Pilot Free Trade Zone on Sept 22, 2020, made Guangxi a pioneer among the first six pilot FTZs in policy formulation.

Following the release of the Special Administrative Measures for the Access of Foreign Investment (Negative List, 2020 version), the FTZ has reduced its list from 37 to 30. 

More than 95 percent of projects utilizing foreign investment have submitted their information to relevant departments for record-keeping.

Restrictions on market access of the air transportation sales agency and ship management industry were relaxed, attracting Lanmei Airlines to invest and settle in the region.

One hundred and sixty-two administrative proceedings at the autonomous regional level were delegated in two groups, and 117 power and responsibility proceedings were included in the negative list for decentralization. 

Five hundred and forty-five reform tasks pertaining to issuance of operation permits and separate treatment of business licenses were fully implemented. 

The registration authorities of foreign enterprises, the administrative privileges of free import and export technology contracts, and 14 administrative examination and approval rights in other foreign investment fields which were originally attributed to the Development and Reform Commission were also devolved, resulting in an effective cost reduction in institutional transactions.
The service center and mediation center of the China Council for the Promotion of International Trade (CCPIT), as well as regional offices of the China International Economic and Trade Arbitration Commission (CIETAC) and the China Maritime Arbitration Commission (CMAC) were launched in the FTZ.

Three areas of the FTZ have set up courts, inspection offices, foreign-related legal aid work stations, intellectual property rights aid center branches and intellectual property transaction centers to improve their governance in accordance with laws and regulations.
Rules convergence, institutional innovation and decentralization have upgraded the flows of talents, commodities and capital to a further reciprocal recognition of technologies, standards and rules between the FTZ and ASEAN countries. 

Such practices have also contributed to the construction of a new system for a higher-level open economy and the exploration and implementation of a comprehensive opening-up over a wider range.　

Collaborative guidance

The FTZ strengthened its top-level design and created a flat organizational structure which integrates the leading group, the construction headquarters, the construction headquarters office and management organizations of each area.

More than 100 major issues were implemented through the construction commander working conference.

The FTZ also established a working mechanism combining functions of statistical monitoring, matrix supervision, special inspection, performance assessment and third-party evaluation for greater efficiency. 

The system of working together as one office while keeping separate identities was applied in the region. Investment promotion companies administered by management committees of the Nanning Area and the Wuxiang New District were set up. 

An aerial photo shows the container terminal of Qinzhou Port in South China’s Guangxi Zhuang autonomous region. [Photo provided to chinadaily.com.cn]

The Qinzhou Port Area, together with the China-Malaysia Industrial Park, the bonded port area and the economic and technological development zone in the region adopted a co-working mode, and a more flexible employment and salary mechanism was implemented that affects about 700 employees. 

The Chongzuo Area and the Pingxiang Integrated Free Trade Zone established a joint investment attraction working group with the Friendship Gate Customs and Xiangfa Investment Group.
By administrative streamlining and resource integration, the construction of the FTZ and all-round opening-up has entered a new stage.

Over the past two years, the construction headquarters office has taken the lead in holding more than 50 online marketing, investment introduction, signing ceremonies and China-ASEAN Expo promotional events.

The office has also guided each area of the FTZ to build professional teams for implementing attractive investment opportunities in leading industries. Over 100 activities were launched in the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta region, and the Beijing-Tianjin-Hebei region. Foreign enterprises such as GDF Suez, Vopak, Praxair and SinarMas Group have set up subsidiaries in the Zone.

The China (Guangxi) Pilot FTZ will keep institutional innovation as its central task and focus on the construction of five zones and one port in the region to become a high-standard free trade park that takes the lead in opening-up and cooperation between China and ASEAN counties while facilitating mutual reinforcement of domestic and international economic activity.