Chinese authorities have recently decided to set up 7 new free trade zones (FTZs) across the country, including one in Hubei, to replicate the success of previous trials in Shanghai, Tianjin, Fujian and Guangdong. This article will give a brief introduction to free trade zone and an overview of Hubei free trade zone.
Definition of free trade zone
A free-trade zone (FTZ) is a specific class of special economic zone. They are a geographic area where goods may be landed, handled, manufactured or reconfigured, and reexported without the intervention of the customs authorities. Only when the goods are moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties.
Free-trade zones are organized around major seaports, international airports, and national frontiers-areas with many geographic advantages for trade. It is a region where a group of countries has agreed to reduce or eliminate trade barriers. Free-trade zones can also be defined as labor-intensive manufacturing centers that involve the import of raw materials or components and the export of factory products.
Hubei Free Trade Zone
Hubei Free Trade Zone covers an area of 127.7 sq. km. It consists of three parts, namely, Wuhan zone (70 sq. km), Xiangyang zone (28 sq. km) and Yichang zone (29.7 sq.km).
(1) Wuhan Zone
Wuhan zone consists of several parts, namely the Wuhan East Lake Hi-tech Development Zone, Wuhan Economic & Technological Development Zone, Dongxihu District, Wuhan Tianhe Airport, Yangluo Port. Among them, there are Wuhan Eastlake Free Trade Zone (5.41 sq.km), Wuhan Export Processing Zone (2.7 sq.km) and Dongxihu Bonded Commodity Center (0.493 sq.km).
Key industries:
Modern service industries such as international commerce and trade, financial services, modern logistics, R&D deisgn, etc., an emerging industries including ptoelectronics information, advanced manufacturing, biomedicine, etc.
(2) Yichang Zone
Yichang zone consists of 3 parts: Maoping zone, Pinghu area and the high-tech zone.
Last year, Yichang was approved by national authorities to construct the Three Gorges bonded logistics center. This is the third bonded logistics center in Hubei, following that in Dongxihu District in Wuhan and Qipanzhou port in Huangshi. The logistics center will significantly improve the logistic environment in Yichang and contribute to the city’s export-oriented economy.
Key industries:
Cultural tourism, shipping logistics, equipment manufacturing, high-tech industry, etc.
(3) Xiangyang Zone
Xiangyang zone consists of three parts: the high-technology development zone, the airport area and Dongjin New District.
Xiangyang zone focuses on the construction of four platforms: airport, harbor road, rail port and free zone.
Key industries:
Manufacture of high-end equipment, modern logistics park, integrated logistics, trade, product exhibition, e-commerce, modern services, etc.
First two groups of FTZs in China
China (Shanghai) Pilot Free Trade Zone
At present, China already has four free trade zones. In 2013, China’s first FTZ was launched in Shanghai to test a broad range of economic reforms, including more openness to foreign investment and fewer restrictions on capital flows. In late 2014, Tianjin, Fujian and Guangdong were approved to be the second group of FTZs.
1. China (Shanghai) Pilot Free Trade Zone
China (Shanghai) Pilot Free Trade Zone was established on September 29, 2013 as the first of its kind in China. In 2014, the State Council approved the expansion of Shanghai FTZ by incorporating Lujiazui Financial Area, Jinqiao Export Processing Zone, and Zhangjiang High Tech Park, enlarging the FTZ from 28.78 square kilometers to 120.72 square kilometers to provide more space for reform trials.
2. China (Guangdong) Pilot Free Trade Zone
China (Guangdong) Pilot Free Trade Zone (GDFTZ) was formally approved by the State Council and established on 31 December, 2014. The scope of implementation for GDFTZ is set at 116.2 sq.km and covers three areas: Nansha Area of Guangzhou, a 60 sq.km district (incorporates 7.06 sq.km of Guangzhou’s Nansha Bonded Port Area); Qianhai & Shekou Area of Shenzhen, a 28.2 sq.km district (incorporates 3.71 sq.km of Shenzhen’s Qianhai Bay Bonded Port Area), and Hengqin Area of Zhuhai, a 28 sq.km district.
3. China (Fujian) Pilot Free Trade Zone
China (Fujian) Pilot Free Trade Zone (GDFTZ) was formally approved by the State Council and established on 31 December, 2014. With a total area of 119.9 sq.km, it consists of three areas: the 43-km? Pingtan Area, the 43.78-sq.km Xiamen Area and the 31.26-sq.km Fuzhou Area.
4. China (Tianjin) Pilot Free Trade Zone
The China (Tianjin) Pilot Free Trade Zone (TJFTZ) is established in the Tianjin Municipality with the approval of the State Council of China. It is the first of its kind in northern China and among the second group of regional pilot free trade zones following the China (Shanghai) Pilot Free Trade Zone. TJFTZ, with a total area of 119.9 sq.km, consists of three areas: the 30-sq.km Tianjin Port Dongjiang Area, the 43.1-sq.km Tianjin Airport Area and the 46.8-sq.km Binhai CBD Area.
Related: China adds 7 new free trade zones
(hubei.gov.cn by Mao Huifang)
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