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State Council introduces new measures to promote innovative models in foreign trade

Zhang Yue
Updated: Jul 3,2019 11:30 PM

The Chinese government will support the pilot free trade zones in undertaking more experiments with reform and opening-up, and refine policy incentives for cross-border e-commerce to facilitate more innovative models in foreign trade, the State Council’s executive meeting chaired by Premier Li Keqiang decided on July 3.

The Chinese government puts great emphasis on developing the pilot free trade zones. General Secretary Xi Jinping underlined the importance of allowing the zones more autonomy in making reform-related decisions. The goal is to promote their development at a higher level, gain more replicable experience in institutional innovation, and develop the zones into pioneers for reform and opening-up in the new era. Premier Li Keqiang laid down a clear requirement for the pilot zones to play an exemplary role as pace-setters in the country’s reform and opening-up.

“These pilot free trade zones have accumulated much good experience in the six years since their launch. In particular, they have set an example in deepening the reform of government functions and expanding opening-up,” Premier Li said. “There must be a stronger unity of purpose, supported by intensified efforts in this respect.”

At the meeting, attendees called for a speedy launch of new measures to support the pilot zones in achieving wider opening-up and innovation-driven development in line with high-standard international economic and trade rules.

Related provincial and municipal governments will be urged to delegate more provincial administrative authority to the pilot free trade zones, especially in investment approval and market access. The reform of separating business licenses and operation permits will be fully implemented in all pilot zones.

The meeting urged supporting local governments and departments in proposing deeper reforms under their portfolio of responsibilities, trying the reforms out in the pilot zones, and working to see that all reforms and innovations become part of a systematic whole.

The 2019 edition of the negative list for foreign investment applicable to the pilot free trade zones must be fully implemented, and related laws and regulations should be adjusted accordingly.

Concrete measures were proposed at the meeting for innovation in trade facilitation. Pilot programs in competition policy will be launched in the zones as part of efforts to level the playing field. The government will step up exploration of measures to widen market access, especially in opening the service sector, in the zones, with a view to gaining experience for businesses to participate in global competition and for opening-up at a higher level.

At the same time, reform and innovation in pilot zones will be better leveraged to facilitate the development of their host cities and the surrounding regions.

“Nowadays, globalization, free trade and multilateralism have experienced some disruptions. Yet China’s commitment to opening-up as the general direction remains unchanged, and steps for wider opening will be better delivered,” Premier Li said. “We have made arduous efforts to this end in the past 40 years, and going forward, we will be as steadfast in pursuing opening-up. What has happened shows that China’s opening-up has benefited the world, and boosted its own development.”

The meeting also studied support measures for cross-border e-commerce.

The past few years have seen robust growth in cross-border e-commerce, which has become a prominent highlight in foreign trade.

“Cross-border e-commerce is an innovation responding to the new industrial revolution. As our economy transforms and upgrades, innovations in business models become an imperative. Cross-border e-commerce may take up a very small share in our overall foreign trade now, yet with its fast growth, it has catalyzed domestic industrial upgrading, spurred consumer spending, boosted domestic logistics such as express delivery, encouraged innovation and business start-ups, and created massive jobs.”

It was decided on July 3 that on top of the 35 existing zones, such zones will be launched in more cities in light of local needs. Retail goods that are exported from these pilot zones will see their value-added tax exempted in the absence of a valid purchase certificate. Simpler methods for verifying and collecting corporate income tax will be introduced.

The meeting urged building more service platforms for developing cross-border e-commerce. The development of overseas warehouses in more places will be encouraged. Related e-commerce platforms will be guided in stepping up services for intellectual property protection.

Educational institutions will be supported in launching majors of cross-border e-commerce to promote both industrial and academic development, and produce more professionals for cross-border e-commerce.

The meeting also urged efforts to improve a prudent and accommodating regulatory approach and boost international cooperation, including active participation in the making of international rules on cross-border e-commerce.