The report of the 19th National Congress of the Communist Party of China (CPC) has required to accelerate efforts to improve the socialist market economy, deepen institutional reform in the financial sector, make it better serve the real economy, increase the proportion of direct financ-ing, and promote the healthy development of a multilevel capital market; make new ground in pursuing opening up on all fronts, grant more powers to pilot free trade zones to conduct reform, and explore the opening of free trade ports.
On Mar. 31 this year, the State Council released the "Plan for Comprehensively Deepening the Reform and Opening-up of China (Shanghai) Pilot Free Trade Area" (hereinafter referred to as "plan for comprehensively deepening the reform"). This is the version 3.0 of the China (Shang-hai)Free Trade Area (FTA) after the "overall plan" in 2013 and the "plan for deepening reform" in 2015. The plan for comprehensively deepening the reform has clearly stated to establish the "free trade ports.”
Based on the version 3.0 plan for comprehensively deepening the reform, the financial reform and development in Shanghai FTA must be "down-to-earth while aiming high": "Aiming high" means that the reform and innovation of free trade finance must refer to the highest international standard and level to lead the overall development; "down-to-earth " means that the innovation system of free trade finance should be implemented in the pilot FTA and all kinds of market players to produce practical outcomes.
Constructing beams and columns of laws and policies for building Shanghai free trade ports
The plan for comprehensively deepening the reform and the report of the 19th CPC National Congress have both made clear that Shanghai FTA will build free trade ports in the next step. We believe that we should construct "four beams and eight columns” of laws and policies for the free trade ports by systematic and rigorous top-level design and institutional innovation according to the reality of the Chinese mainland and the experience drawn from the Hong Kong Special Ad-ministrative Region.
The "four beams" mean that the institutional innovation should start from four aspects: 1. to ef-fectively transform the functions of the government, and streamline administration, delegate powers and improve regulation and services as soon as possible; 2. to implement free trade poli-cies within the ports and expand the free trade space outside; 3. to deepen reform to facilitate trade and promote institutional innovation in trade regulation; 4. to deepen reform and innova-tion of the financial system and form a cross-border green financial market mechanism.
The "four beams and eight columns” of laws and policies for the free trade ports is the key for the Shanghai FTA to perform key functions, like finance and trade, advanced manufacturing, science and technology innovation, to radiate and lead other areas by deepening reform comprehensively, and they are also the basis of realizing the overall goal to build the most open FTA with convenient investment and trade, free currency exchange, convenient and efficient regulation, and standard legal environment.