Reception section of the China (Shanghai) Pilot Free Trade Zone. The FTZ will focus on constructing a high-tech and innovative center.[Photo by Chen Mengze/For China Daily]
Shanghai can become the economic heart of the Yangtze River Delta by offering a global-standard business environment to more privately owned enterprises.
The further expansion of the China (Shanghai) Pilot Free Trade Zone recently is all part of the “Belt and Road Initiative” and paves the way for growth in the region.
The Shanghai FTZ will now include the Lujiazui Finance and Trade Zone, Zhangjiang High-Tech Park and Jinqiao Export Processing Zone. This in turn will increase the area of the FTZ by more than four-fold to 120.27 square kilometers.
“The Shanghai FTZ will focus on constructing a high-tech, innovative center,” said Sun Jiwei, governor of Pudong New Area, the business center of Shanghai.
“This will tightly follow the ‘Belt and Road Initative’ and Yangtze River Economic Belt strategy.”
A key impact of expanding the Shanghai FTZ will be the single-window policy, which will help the city’s trading companies. This means customs clearance costs will be reduced at the border ports of Zhejiang and Jiangsu provinces to speed up the process.
“The shortened customs clearance process will enable those trading companies out of Shanghai to share the same privileges with local enterprises,” said Chen Bo, secretary-general in the free trade zone research institution of the Shanghai University of Finance and Economics.
Chen pointed out that Shanghai is now ideally positioned to become the economic engine of the Yangtze River Delta as part of the “Belt and Road Initiative”. At the same time, this will boost the domestic economy and expand international trading routes.
As one of the new FTZ areas, Zhangjiang hopes to become the “incubator” of small and medium-sized businesses by offering fledgling companies the chance to locate to Shanghai.
“We are keen to transform Zhangjiang into a high-tech innovative incubator for SMEs to develop the products and industries there,” Ma Limin, deputy director of Science & Technology Management Section of the Science & Technology Commission in the Pudong district, said.
The district government of Pudong brought in detailed regulations in 2014 to help open up the financing of SMEs in their early development. “We have comprehensive platforms to provide resources and advice for those newly emerged enterprises,” Ma said. “This will help them learn from each other through cooperation and communication.”
Companies from the Yangzte River Delta are also hoping to cash in on the expanding Shanghai FTZ.
“I am planning to open a small office in the Shanghai FTZ in the near future,” Ai Shengming, who runs Zhejiang Moon Jewelry Co in Yiwu, Zhejiang province, said. “By doing that, I will be able to learn from high-level research and design teams.”
In the past few years, Ai has shifted the focus of his Moon Jewelry business into designing products to boost his client base. “I hope the move from Yiwu to Shanghai will give my company the edge in quality and style of products,” Ai said.
For companies manufacturing and exporting products to overseas clients, setting up an office within the FTZ will prove beneficial and pave the way toward global expansion.
“Having an office in Shanghai is just the first step on the world stage,” Xia Guangyao, chairman of Wenzhou Jialunte Textile & Finery Co Ltd from Zhejiang province, said. “This will help me work with high-end brands in the industry.”
Two years ago, Xia failed to set up a Shanghai branch of his company because he only had a small factory in Jinqiao. But now his business lies at the heart of the expanded Shanghai FTZ. “I am quite lucky to experience and benefit from the reform,” Xia said.
“It seems to have attracted more businesses out of the city. That is good news.”
Xia’s optimism is shared by other business people who will benefit from the expanded FTZ.
“I have used the opportunity to get into the Shanghai market by finding out what customers there want,” said Li Jianfeng, senior sales manager of Jiangsu Xinshen Group Co Ltd, a manufacture of linen fabric in Suzhou, a neighboring city of Shanghai. “I have participated in trading exhibitions, fashion shows and business forums.”
Li also hired design talent from Shanghai for the Jiangsu Xinshen Group. They helped with new ideas and styling products. “The regional effects from the expansion of the Shanghai FTZ will shorten the distance between other cities in the Yangtze River Delta and Shanghai by sharing resources of people,” Li said.