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China (Shanghai) Pilot Free Trade Zone: Review & Outlook

Business Regulation and Tax Newsflash

Issue 11 - 29 November 2013

The senior officials of the Shanghai government held a press conference on 28 November 2013 to provide a brief review of the operation of the China (Shanghai) Pilot Free Trade Zone ("Pilot FTZ") during the last two months since its official launch, as well as an outlook of the possible reform measures in the future.

Factsheet (as of 22 November 2013)

Newly established enterprises in the Pilot FTZ
Numbers  
   – foreign-invested 38
   – domestic-invested 1,396
Total registered capital  
   – foreign-invested USD 560M
   – domestic-invested CNY 34.7B
Industry distribution (%)  
   – Trading 69
   – Service 26
Establishment applications in early process                                                    
(i.e. name-checking stage)
around 6,000
 
Newly established financial institutions in the Pilot FTZ
Numbers  
   – Banking (foreign)          12
   – Banking (domestic)      9
   – Insurance 2
   – Securities and futures 5
   – Funds 7
   – Finance leasing 9
   – Trading platform 2
   – Payment service 1
   – Financial related service (e.g. investment companies, asset management, etc.) 285

 

Possible reforms in next steps

Financial reform: The highly anticipated financial reform measures, which were formulated by the People's Bank of China, will be announced and implemented after the completion of relevant preparatory work, in particular, the program design and testing for risk monitoring and control purposes.

Opening-up of service sectors: Among 23 measures to further open up service sectors to foreign investors, as set out in the State Council's Framework Plan for the Pilot FTZ, 12 measures have been implemented while remaining 11 measures are to be launched after the implementation rules are ready or the relevant regulatory obstacles are removed.

Legislation:

  • 20 more State Council regulations or circulars will be suspended for three years in the Pilot FTZ to facilitate foreign investment and further relax access to certain industries (e.g. manufacturing and selling of gaming consoles, value-added tele-communication services)
  • More supporting opinions from departments such as the People's Bank of China, the Ministry of Industry and Information Technology will be released in the near future.
  • The Shanghai government is in the process of collecting comments from various parties (e.g. industry associations) to improve the existing "Negative List (2013)", and produce a 2014 version.

 

Please follow the link for the full transcript of the press conference in Chinese. You may also access the relevant information and regulations about the Pilot FTZ via Deloitte's dedicated portal page.

 
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