2017 - Nov 13, 2017

Shanghai Free Trade Port Update

Shanghai, November 13th 2017

Shortly after the conclusion of the 19th Party Congress in late October, Gao Feng, spokesperson for Ministry of Commerce of PRC confirmed that the ministry is working closely with Shanghai to propose the action plan for the set-up of the Shanghai Free Trade Port. According to the approved framework by the State Council, the plan is due to conclude before the end of the year 2017.

The free trade port set-up comes 4 years after the launch of China (Shanghai) Pilot Free Trade Zone, the first of its kind in mainland China. Forming a key part of the Shanghai Pilot Free Trade Zone 3.0 strategy, the free trade port set-up plan promises to deepen reform and further upgrade administration and regulatory mechanisms to position the Shanghai port among world’s most advanced free trade ports.

The preliminary plan for the Shanghai Free Trade Port will focus on free flow of three key elements – commodities, capital and talent, while also aiming for breakthroughs in preferential taxation policies, the China Securities Journal reported on 8th November.

  • In the free flow of commodities, the free trade port aims to conduct sample checks on key goods by relevant authorities;
  • As for flow of capital, the plan aims for improvement in foreign exchange administration, adjustment of preferential taxation policies and enhancement of account systems in the free trade zones. The purpose is to achieve the free flow of new foreign exchange;
  • For the free flow of talent, the free trade port will issue Chinese green cards to foreign employees. Moreover, there will be preferential policies for non-local employees in terms of hukou (household registration) arrangements.

The inauguration of the new free trade port will benefit in particular the logistics, trading and financial services industries. Compared to the PFTZ, the free trade port is expected to make further advancement in border liberalization and will eliminate or minimize trade control measures for imported goods. It is foreseen that the free trade port will enable customs clearance exemption, tax exemption and unrestricted re-export trade. Additionally, the international financial leasing and offshoring industries are also expected to blossom in light of the free trade port policies.