On Oct 16, 2018, China State Council issued an approval letter to establish China (Hainan) Pilot Free Trade Zone and released the Framework Plan which outlines the island's development roadmap going forward.
The implementation scope of the Free Trade Zone is the entire Hainan Island. The plan is to build Hainan into a pilot zone which:
- Comprehensively deepens reforms and opening up
- Makes it a national ecological pilot zone
- An international tourism consumption center
- A zone for realization of key national development strategies.
Relevant contents in the framework plan includes:
- Relax foreign market access and further facilitate establishment of foreign funded enterprises.
Fully carry out the pre-access national assessment and implement the negative list administration system for foreign capital investment. Streamline investment project entry procedures and enable "One-window processing" of the commercial filing and commercial registration of foreign-funded enterprises.
- Increase the level of trade facilitation
For goods entering and leaving Hainan Yangpu Bonded Port Area, except for those which are prohibited or restricted for import and export, and goods requiring inspection and quarantine a new entry and exit management system will be piloted.
In addition a new IT system will be used which will include a comprehensive information database of customs clearance and logistics status, which can facilitate enterprises to dynamically check the status of customs clearance and logistics in real time . The accreditation and use of third-party inspection institutions will also be expanded to facilitate generation of product/commodity testing results required during customs clearance.
- Promote trade transformation and upgrading
A negative list administration system of cross-border trade in services will be established. Designate Hainan as new comprehensive CBEC pilot zone in the future, support CBEC enterprises to build bonded warehouse and conduct retail and import activities under the mode of bonded online shopping in cross-border e-commerce in Hainan. Also, first-imported non-special use cosmetics filing management trial will be implemented in Hainan FTZ soon.
- Strengthen risk prevention and control system
Improve post-market surveillance and strengthen administration of entry and exit safety access.
The pilot policies of Hainan Free Trade Zone will also improve management of the free trade port which is expected to open in 2025.
Currently, China has approved the establishment of 12 free trade zones, which are Shanghai, Guangdong, Tianjin, Fujian, Shanxi, Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan, Hainan. The establishment of the 12 free trade zones aim to promote China's economic transformation and deepen reform and opening up.
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