the so-called "freedom" in a free trade zone refers more to the freedom of trade, logistics and tariffs in a specific region, the core of which is to speed up the entry and exit of goods, personnel exchanges, capital flows and information transmission through deregulation. Compared with "domestic customs clearance", this kind of "domestic customs clearance" can undoubtedly reduce trade costs and promote trade and exchanges to the greatest extent.
Shanghai Free Trade Zone shoulders four major missions.
1. Liberalization of trade: goods are freely imported, manufactured and re-exported without customs supervision, prohibition and tariff intervention. The purpose of Shanghai is not to be the port with the largest container throughput, but to do entrepot trade and offshore trade. There are two core components, one is to attract the headquarters of multinational companies, and the other is to build a commodity trading platform. The core of offshore trade is to solve the problem of capital control of multinational companies. Enterprises in the free trade zone are allowed to set up an international fund pool and a domestic fund pool, in which interconnected pipelines are designed. This kind of trade means that the order and capital link are completed in Shanghai, and the goods may not pass through the port of Shanghai.
The FTZ will not be used as a container yard, and we will explore dislocation competition and cooperation with the surrounding areas of the Yangtze River Delta. More importantly, promote the development of service trade related to free trade in goods, especially supporting international commodity trading platforms and shipping financial trading platforms, and allow domestic and foreign enterprises to participate in commodity futures and shipping forward transactions. In the FTZ, overseas futures exchanges will be allowed to designate or set up delivery warehouses for commodity futures. Once completed, they will replace some functions of LME warehouses in Busan, South Korea and Singapore. These designs will not only promote the development of related service trade and service outsourcing industries (including financial leasing, inspection and maintenance, auditing and accounting, etc.), but also reduce the threshold and cost of global resource allocation and commodity price risk management for multinational enterprises, which will help the prosperity of free trade ports.
2. Liberalization of investment: full implementation of pre-entry national treatment and negative list management. If you are not forbidden, you can do anything except what the negative list stipulates cannot be done. This is especially aimed at the service industry: financial services, shipping services, business services, professional services, social services and cultural services, and all six areas are open. Practice has proved that both manufacturing and service industries will develop well and become more competitive in all fields that are relatively thorough in opening to the outside world and actively participate in global resource competition and cooperation. Therefore, most of the investment associations in the free trade zone will implement the filing system, and many restrictions such as the proportion of foreign ownership or business scope will be abolished. It is expected to take the lead in reforming investment project management, establishment and change management of foreign-invested enterprises and industrial and commercial registration within the experimental area. Many modern production and life service industries, such as shipping, credit investigation, financial leasing, inspection and maintenance, performance brokerage, entertainment and culture, education and training, medical care, etc., will implement fair access standards for domestic and foreign capital, and welcome domestic private capital and overseas direct investment.
In fact, this should also be a preview of the ongoing BIT negotiations between China and the United States. China agrees to hold substantive consultations with the United States on the basis of pre-entry national treatment and negative list. For the first time, the "national treatment" for foreign investment will be extended to "pre-entry", and it will no longer rely on the current "foreign investment industry guidance catalogue" for administrative control, in exchange for the equivalent and more transparent foreign investment access review process in the United States. This is also meaningful for the institutional reform of China government, aiming at eliminating the approval power of existing government departments and the corresponding capacity of rent-setting and rent-seeking. In addition, investment is also two-way, and China capital is encouraged to invest directly overseas from the FTZ. Perhaps in the future, in the free trade zone, foreign investment only needs to be filed. Encourage the establishment of foreign equity investment funds, and provide corresponding intermediary services, so that the free trade zone can become a platform for China's capital to go global, and vigorously promote the "going global" strategy.
third, the internationalization of finance: its ultimate purpose is to promote the internationalization of RMB. One hurdle that must be passed is the liberalization of capital account control. It is expected that in the free trade zone, investment and trade-related funds can be freely exchanged, and interest rates and exchange rates are determined by the market. We will actively explore international-oriented foreign exchange management reform pilots and establish a foreign exchange management system suitable for the free trade zone. At the same time, qualified foreign-funded financial institutions are allowed to set up foreign banks, and private capital and foreign-funded financial institutions are allowed to set up Sino-foreign joint venture banks (which may have limited licenses). Encourage them to establish a comprehensive trading platform and fully liberalize product innovation. Financial institutions in FTZs are also allowed to issue bonds overseas, and they can lend money to enterprises in FTZs after they get the money back, thus breaking through the existing restrictions in loan-to-deposit ratio. At the same time, we will change the management mode of foreign debts of enterprises in the free trade zone, and strive to realize the centralized operation of foreign exchange funds in order to establish a global fund management center for multinational enterprises.
The financial development vision of the FTZ in the future is great. Firstly, the functions of free trade and offshore finance in Hong Kong, Singapore, Macau, Switzerland, Cayman and Virgin Islands will be initially realized, and qualified Chinese banks in the FTZ will be allowed to engage in offshore business. At the same time, it is considered to cultivate an onshore and offshore financial center (international board) with the help of the design similar to the International Banking Facility (IBF) in new york and JOM in Tokyo, and then partially open up the offshore and onshore markets by establishing appropriate channels and pipelines (which can be quotas, regions, account types, transaction types, etc.), so as to realize limited interconnection, allow funds to penetrate each other within a certain range or limit, and establish a separation and penetration type (first one-way and then two-way) On the premise of risk control and efficiency improvement, it will eventually form a truly global financial center similar to London, with all-round penetration and internal and external integration.
iv. administrative simplification: the free trade zone will implement a new innovative regulatory service model of "the first line is completely liberalized, the second line is safely and efficiently managed, and goods flow freely in the zone". "The first line" refers to the national border, and "thoroughness" is constantly emphasized. Therefore, one of the most important tasks in the construction of free trade zone is to simplify the complex and reduce the administrative cost in the existing opening pilot, and to provide an effective way to integrate the existing special customs supervision zones. It can be predicted that in the free trade zone in the future, all the market administrative functions such as quality inspection, industry and commerce will be integrated into one institution, and the financial supervision scattered in one line and three meetings may be combined with only one HKMA, so the real reform of the large-scale system can be completely realized in the experimental area. Its ultimate goal is to establish a centralized and unified market supervision system, transform government functions, improve administrative transparency, conduct local legislative experiments and perform the function of protecting investors' rights and interests. This is a brand-new ruling concept of "small government" and the latest attempt to clarify the optimal boundary between the market and the government.