CCTV:

China has spent a decade on building and improving its pilot free trade zones (FTZs). The 20th CPC National Congress proposed implementing a strategy to upgrade pilot FTZs. What will MOFCOM do next to constantly promote the country's FTZ construction, and how can we best play FTZs' role of testing ground for China's reform and opening up? Thank you.

Wang Wentao:

Thanks for your questions. The construction of pilot FTZs is a crucial strategic measure taken by the CPC Central Committee to deepen reform and opening up in the new era. It has been ten years since China established its first FTZ in Shanghai in September 2013. So far, we have established 21 pilot FTZs across the country, including the Hainan Free Trade Port, and basically shaped an innovative pattern of reform and opening up covering the east, west, north, south, and central regions. Over the past decade, we introduced a series of pioneer practices, continuously broke new ground, and had many institutional innovations on reform and opening up replicated in other places across the country, giving full play to the role of FTZs as testing grounds for China's reform and opening up. These are mainly demonstrated in the following aspects.

First, FTZs became a leading force for China's high-quality opening up. Many "firsts" occurred in FTZs. The first negative list for foreign investment access was rolled out at an FTZ, marking China's first step in adopting a foreign investment administration model of pre-establishment national treatment plus a negative list. After seven reductions, the number of items on the FTZ negative list for foreign investment have been reduced to 27 from 190, and the number of items regarding the manufacturing sector on the list has dropped to zero. The expansion of opening up in the service sector illustrates that the country's opening up is widening. In the Hainan Free Trade Port, we put in place the first negative list for cross-border service trade, achieving fundamental change in the management model of service trade.

Second, the FTZs became vanguards for China to deepen its reforms. In FTZs, we first implemented the reform separating operation permits from business licenses, first carried out reform on foreign investment access system, established the first Single Window system for international trade, and opened the first batch of free trade accounts. Many "firsts" have been practiced and explored in FTZs and then applied nationwide. At present, 278 institutional innovations have been applied across the country, involving investment facilitation, trade facilitation, financial openness and innovation, operational and post-operational supervision, and reform of state-owned enterprises, which continuously released reform dividends. 

Third, the FTZs became a lead for China's high-quality development. Relying on the advantages of China's super-large market and its own resources, FTZs have attracted global high-quality resource elements and seen more and more high-end industrial clusters taking shape. In 2022, the actual use of foreign capital in new and high-tech industries of the 21 pilot FTZs increased 53.2% year on year, far exceeding the national average. Their ability to attract investment and shape industrial clusters showed clearly. The FTZs have been building on their ability to support major national strategies, leveraging their strategic positions and advantageous situations.

The 20th CPC National Congress proposed accelerating the development of the Hainan Free Trade Port and implementing a strategy to upgrade pilot FTZs. To implement the strategy, we should focus on the word "upgrade." To upgrade pilot FTZs, we will try and align with high international standards to promote opening up through institutional guarantees and give full play to the role of FTZs as comprehensive testing platforms for China's reform and opening up so as to explore new paths to comprehensively deepen reform and expand opening up. Our efforts will mainly be made in three aspects:

First, we will align with international economic and trade rules that hold high standards. We will focus on key fields like trade and investment, government procurement, intellectual property rights, and the environment and formulate and issue pilot reform measures. We will carry out trials in the free trade port and in some qualified FTZs, and be the first to establish institutional systems and regulatory models that are in line with high-standard international economic and trade rules in order to make breakthroughs in deepening reforms in relevant areas at home.

Second, we will improve the market access management. We will enhance stress tests, an important function of the FTZs, in investment and service trade. Next, we will further shorten the negative list for foreign investment and expand opening-up in the modern service industry. In the service trade sector, we will introduce negative lists for cross-border trade in services, one for FTZs and one for other places across the country, and implement a new model for managing cross-border trade in services on a larger scale.

Third, we will promote integrated reforms and collaborative innovations. We will enhance trans-department, trans-sector, and trans-industry coordination and intensify systematization, integration, and collaboration of pioneer projects so as to adapt to the current situation of new industries, new models, and new forms of business. We will further improve liberalization and the facilitation of trade and investment, strengthen institutional and integrated innovation, and focus on a new generation of information technology and biomedicine. We will also explore institutional innovation to accelerate the building of a modern industrial system and maintain security and stability for the country's industrial and supply chains. Thank you.