The initial program of free trade port in Shanghai is in full swing with the three elements being the focus of free flow

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Four years after the development of the Shanghai Free Trade Zone, the construction program of Shanghai Free Trade Port is being brewed in full swing. China Securities Journal reporter was informed that the preliminary plan for Shanghai’s free trade area is expected to make breakthroughs in the free flow of the three major elements of goods, funds and personnel. It is expected to make breakthroughs in foreign exchange administration, tax incentives, the acquisition of China’s green card by foreigners and the settlement of foreign workers. In addition, Freeport will strive to achieve the overall regulatory strategy of “domestic clearance” in order to develop offshore trade and offshore finance. Programs are currently seeking guidance from various departments to improve.

Three elements of free flow into focus

According to the participants in the program discussion, China Securities Journal was informed that the free flow of the three elements of goods, funds and talents in the initial free trade port proposal submitted by the relevant departments in Shanghai will be the focus of concrete implementation.

In the free flow of goods, strive for first-line unconditional access, registration for the record, the region free exemption, import and export of goods in the free port does not require Customs and other departments to review, the relevant departments only sampling of key goods.

The free flow of funds, the main contents include improving foreign exchange management, tax incentives, improve the free trade area account system, speed up the development of RMB offshore business. With concrete details, Freeport will strive for the free flow of “incremental” foreign exchange. In addition, Freeport will strive to substantially reduce the income tax rate of registered enterprises in the port.

As for the free flow of talents, the foreign talents employed by the enterprises in Hong Kong will target the issuance of green cards in China, and there may be further preferential measures for setting up of foreign talents working in Hong Kong enterprises in Shanghai.

Chen Bo, a professor at Huazhong University of Science and Technology and executive director of the Free Trade Zone Research Center, said that the relevant policies on the circulation of people are more likely to make breakthroughs and the contents of foreign exchange administration still need to be confirmed.

As for the overall design of the program, the concept of “customs clearance inside and outside the territory” has become the top priority. Correspondingly, “letting go of the first line, safe and efficient control of the second line, and freedom in the area” are the two major areas. “Let it go” is to change from the conventional regulation to the simplified supervision. The “second-tier efficient control” is based on the platform function of “single window”, and the relevant regulatory authorities including customs, inspection and quarantine, foreign exchange and payment related to trade regulation are connected to the “single window” operating platform to achieve an intensive and one-stop Efficient management.

Offshore trade as the core starting point

The goal of a free trade port is not limited to the trade itself. The tentative plan for the free trade port is to trade-led industries and “leave a huge added value brought by tremendous trade volume.” Taking this as the goal, offshore trade and offshore finance will be the development direction of the free trade port policy.

Chen Bo told China Securities Journal reporter that the development of offshore trade is the core of the circulation of goods and the starting point for the construction of the entire free trade port.

The core of offshore trade lies in the regulation of “customs clearance inside and outside the territory”, the storage of goods is exempt from tax in the port of free trade and customs declaration is not required at the same time.

Chen Bo explained that in order to eliminate the cost of seaborne trade are often bulk shipping, bulk shipping caused by the mismatch of time, that is transported over time, do not know who their potential sellers, there may be other countries. If a port merely stores and needs tax declaration, it actually adds to the cost of the business, resulting in the demand for offshore trade.

Bai Ming, deputy director of the Institute of International Trade and Economic Cooperation under the Ministry of Commerce, believes that the difference between a free port and a free trade area is mainly reflected in allowing offshore trade and further opening up the high-end service industry based on offshore trade. Offshore finance and other related business.

Chen Bo believes that China has become one of the largest potential markets in the world. If offshore trade is allowed, a large amount of international goods and even entire East Asian international commodities will be put into Shanghai. According to international experience, with the development of offshore trade, there will be opportunities in areas such as transportation and storage of bulk raw materials, distribution centers and offshore finance.

“The first thing we bring to our shipments is an increase in the volume of shipping, which was followed by onshore trade and entrepot trade, which now adds a large bulk of offshore trade and attracts potential trade in other countries; secondly, there is a need A large number of warehousing, will lead the warehousing and logistics industry; the third is the distribution and transportation; the fourth is offshore financial services, offshore trade needs to be directly traded in the primary market, the need for trading platform, the need for futures, offshore trade as the basis , The development of financial services and the establishment of Shanghai Financial Service Center is appropriate. “Chen Bo said.

The development of these industries will bring business opportunities to the relevant listed companies. A listed company executives said the company optimistic about the opportunities brought by the bulk of raw materials transport. “Bulk raw materials have the characteristics of large volume and high value, and they are also less sensitive to the price of freight.” The company’s head of operations said that with the business development of bulk raw material transportation, along with warehousing and supply chain finance Derivatives and other derivatives business will also be rapidly expanding, in order to develop related businesses, the company plans to build a Yangshan Port about 200 acres of warehouse.

Another listed company executives interviewed by China Securities Journal introduced the company operating a foreign multinational distribution center in Yangshan Port, but is currently mainly responsible for the domestic market allocation, with the free port policy, the company has the opportunity to allocate Center for more business.

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