Since five tasks in the framework plan of China (Shanghai) Pilot Free Trade Zone (FTZ) 2013 has been implemented, Shanghai FTZ has made great progress in market opening and reform deepening, a Chinese expert has said.

Guilong Shen, assistant director of the Institute of Economics of Shanghai Academy of Social Science, made the remarks at a seminar held by the School of Contemporary Chinese Studies at the University of Nottingham.

Reform dividends of Shanghai FTZ are further released and competition between domestic and foreign players had been improved, he said.

The research professor said that Shanghai FTZ is a pilot test of China's deepening reform and upgrading opening-up.

Shanghai FTZ aims to innovate system, not to implement preferential policies, he added. The zone practices a policy of "inside the territory while outside the customs," replacing the policy of "within the territory of customs" in general special areas supervised by customs.

Shen mentioned the framework plan of Shanghai FTZ 2013 lists five tasks, which included accelerating the transformation of government functions, opening up of investment sectors, promoting the transformation of trade development approach, deepening innovation and opening up of financial services, improving regulatory supporting systems.

Govement functions transformation

Shanghai FTZ could accelerate the transformation of government functions by innovating commercial registration system and establishing integrated supervision system.

Before the "one-stop processing" service model was brought in, it took 29 days for enterprises to get relevant licenses and certificates. However, it takes only 4 days after the model was implemented, Shen said.

"There were 18,828 companies registered at Shanghai FTZ in June 2014, among which 10,445 were registered after the establishment of Shanghai FTZ," he added.

Besides, the integrated supervision system shifted from prior approval to in-process and ex-post supervision.

Six aspects of work was promoted, which included security review and anti-monopoly review system, construction of business integrity and public trust system, implementation of joint supervision and enforcement system, adoption of comprehensive evaluation mechanism, social participation in market supervision and platform of information sharing.

Open investment sectors

The reform of investment management system and expansion of service industry openness would be accelerated.

Shen said the reform of investment management system contains pre-establishment national treatment, negative list mechanism and record-filing system.

"The initial version of the (negative) list contained 190 items. In late June of 2014, the government trimmed 51 items from the list," he mentioned.

"Administrative measures for outbound investment were also streamlined. Substantive approval was replaced by filing requirement. Companies in Shanghai FTZ no longer need to get approvals from National Development and Reform Commission," or China's top economic planner, he added.

In terms of service industry openness, Shanghai FTZ opened up six major areas involving 23 specific industries: financial, shipping, commercial, professional, cultural and social services.

Trade development approach

Trade function and trade efficiency would be improved during the transformation of trade development approach, Shen noted.

Multinational companies are encouraged to set up Asia-Pacific regional headquarters and operation centers. Besides, international commodity trading and resource configuration platform are explored.

"In the end of September 2014, first 20 Asia-Pacific group headquarters were set up. Cross-border e-commerce enterprise named Kuajingtong owned 29 online merchants," he said.

Besides, average custom clearance time of imported goods has been shortened from two to three days to just half a working day. In terms of exported goods, custom clearance time decreased 36.8 percent comparing outside the Shanghai FTZ, Shen said.

Deepening innovation

The financial service functions will be greatly strengthened. Qualified foreign banks and private capital groups are allowed to set up their wholly-owned bank subsidiaries and joint venture banks in Shanghai FTZ. Platforms of international transactions are permitted to establish. Oversea companies are allowed to engage in commodity futures trading.

Shen illustrated some new institutions. "Shanghai United Assets and Equity Exchange has established trade service platform in Shanghai FTZ. China Financial Futures Exchange, China Foreign Exchange Trading Center, Shanghai equity trading center and Shanghai Clearing House rolled out trading venues in Shanghai FTZ," he said.

(from Xinhua)