Political advisors see great potential and prospects for China's pilot free trade zones, but the zones are still in their early stages and questions remain.

In the year following the Guangdong pilot free trade zone's inauguration, Zhang Jiaji, a member of the 12th National Committee of the Chinese People's Political Consultative Conference (CPPCC), said Guangdong Province has been exploring new legislative and infrastructural possibilities.

"The Guangzhou government, as well as all members of society, are paying great attention to the zone and see it as a key sector for future development," he said.

Guangdong has three free trade zone areas - Nansha New Area in Guangzhou, Qianhai and Shekou Industrial Zones in Shenzhen, and Hengqin New Area in Zhuhai - and two other free trade zones were officially established last year in Tianjin and Fujian Province. China's first free trade zone was established in Shanghai in 2013.

Pollyanna Chu, CEO of Kingston Financial Group and a CPPCC member from Hong Kong, said to China.org.cn that she saw Guangdong free trade zone as a platform for her company's businesses to enter the mainland market. "We would love to do business through a free trade zone because the policies and regulations for taxes, investment and numerous other factors are clearer than elsewhere. We can also get into the Chinese mainland faster this way."

As the 2016 Government Work Report highlights the necessity of advancing opening-up to a higher level in order to expand win-win results, free trade zones are receiving more and more attention.

Zhou Wenzhong, secretary-general of the Boao Forum for Asia and CPPCC member, said the various preferential policies and enterprises inside the zones will benefit local development. They are trial zones designed for attracting investment, resolving employment issues, and testing things that other parts of China cannot do. "The steady development of free trade zones would contribute to the new round of high-level economic liberalization policy, " Zhou said.

Lim Ming Sum, President of Fuman (H.K.) Co. Ltd. and CPPCC member, said that the free trade zones' major functions are exporting and importing. "This may be what China needs in the future. In free trade zones, the policies are flexible, which can also make our market and our products flexible. "

But some political advisors have questions.

"China has several free trade zones now. Are all their policies the same? What will the execution of these policies result in? The government needs to further elaborate the details and goals to Hong Kong and Taiwan enterprises, as well as to overseas Chinese and foreign enterprises, " Lim told China.org.cn.

Eddy Li Sau-hung, a CPPCC member and Chairman of Campell Group (Holdings) Limited, as well as president of the Chinese Manufacturers' Association of Hong Kong, said that although Guangdong free zone was created to integrate with the development of Hong Kong and Macao, he has yet to see very many results that are helpful to Hong Kong.

"We have to look at two questions," Li said. "First, the free trade zone has a protective tariff for Hong Kong's small and medium-sized enterprises. The tax rate is lower than elsewhere. Tourists can buy foreign goods in the free trade zone without having to come to Hong Kong. This is a big blow to Hong Kong's retail businesses. Second, regarding preferential tax policies, if we already have companies established in Guangzhou or Shenzhen, we won't enter the free trade zone and the preferential policies mean nothing to us. But if we want to get in, are we going to have to register another company? "

Leung Chi Man, a businessman and CPPCC member, has made a proposal to China's top advisory body to establish an international professional services center, attracting high-end firms from Hong Kong, Macao, and overseas, which can provide legal, financial, accounting, and cultural services. "They can help foreign enterprises within the Chinese market while also helping Chinese enterprises abroad with professional advice and assistance."

"I'm very much looking forward to the free trade zones' performances," said Sun Yinhuan, Chairman of Yida Group, member of the standing committee of the CPPCC National Committee and vice president of the All-China Federation of Industry and Commerce. "The development of free trade zones is further connecting China to the international markets."

Other provinces in China are also hoping to get selected for the third round of free trade zones.

Zhou Chunlin, a CPPCC member and vice chairwoman of Heilongjiang Federation of Industry and Commerce, said Heilongjiang and Jilin provinces can have a joint free trade zone in northeast China, focused on deepening economic relations and trade with Russia and Mongolia.

But Zhang Jiaji warned, "We should not blindly chase something. Do we know enough about free trade zones' real contribution to the Chinese economy? The Western countries' economic models also have problems, which led to the financial and debt crisis. We shouldn't treat everything from them as a treasure; we have to do additional surveys and research," he said.

Go to Forum >>0 Comment(s)