China opens its door wider – Liaoning Free Trade Zone

The establishment of the Liaoning Free Trade Zone (FTZ) was approved in September 2017 and since then, Dalian’s goal is to create a sufficient and stable business environment. The new FTZ will involve three major cities of Liaoning province, including Dalian, Shenyang and Yingkou. Dalian is already part of the Jinpu New Area, which helped to increase its international and domestic trade levels, including international partnerships with South Korea, Japan and Russia.

Golden sky sunset at Dalian Harbour China

Sunset at Dalian Harbour

Jinpu New Area is a strategic region for regional co-operation of firms in Northeast Asia. It was formed in 2014 and became the 10th of China’s Big National Districts as part of the 13th Five-Year Plan. The main aim of the Dalian Jinpu New Area is to develop the opening-up and reform of China, as well as to expand the coastal economic relationships in Liaoning Province and to boost the economic growth in the North-Eastern part of the country. The Jinpu New Area was approved by the State Council, in the hope of making Dalian a pilot zone for innovation. Since the formation of the New Area, large number of functional zones have been set up within the district. Some of these functional zones, include tariff-free zone, bonded port areas, national tourist resorts and export processing zones. The New Area helped Dalian to become a global logistics and international shipping centre. The New Area has both economic and geographical advantages for businesses, operating in Dalian and its surroundings.

In 2017, the Chinese government approved the creation of the Liaoning Free Trade Zone. It is made up of three sectors, Dalian, Shenyang and Yingkou. The new Liaoning Free Trade Zone covers state-level high-tech zones, bonded harbour area, the Jinpu New District as well as numerous industrial parks. The regions that will have special customs supervision, will have a focus on the search for institutional innovation that can improve the accessibility of trade, logistics and the processing of bonded services. On the other hand, areas which are not under special customs supervision will focus on exploring potential reforms of the investment system, innovation of the finance sector, the promotion of transformation of the manufacturing industry as well as on the opening-up of the Chinese service industry.  The government made registration convenient for companies, which are located at the Dalian Area of China, Liaoning Free Trade Zone, by setting up a special registration service window for organisations based in the Jinpu New Area and by helping companies to adopt a virtual registration service. Reports of the registration shows that half of the firms used the virtual registration mode to settle down in Jinpu New Area. These organisations include firms in the finance, trade, biological science, equipment manufacturing and port and shipping logistics industries. According to reports, Dalian has copied and promoted around 102 innovative measures of the Shanghai FTZ, as well as of other pilot Free Trade Zones.

China's Free Trade Zones map showing the seven new FTZs

China’s Free Trade Zones

There are three main goals that the Chinese government tries to achieve by creating the Liaoning Free Trade Zone along with several new laws. The first, is to focus on speeding up the market-orientated institutional mechanism reforms. In order to do this, the Liaoning Free Trade Zone will mostly be based on the Shanghai Pilot Free Trade Zone and adapt new reforms and accomplish further institutional innovations, which are easily adaptable by the cities covered by the Liaoning Free Trade Zone. These changes should mainly focus on the function of the local government and expand the power of decentralization, improve services and to authorize supervision. These changes should help to improve the business environment and the restructuring and upgrading of industries in the involved areas.

The second, is to focus equally on the introduction, development and show a new image in team building of talents. Introduction of new talents is important and should be done efficiently and high-level talents should be brought from global and international perspective. The involved are should improve the training and education and overall quality of cadres as well as to work hard, overcome difficulties and try to create a dynamic situation of competing for development.

Lastly, the cities in the Liaoning Free Trade Zone should also open-up further to the outside world in order to help to build and achieve a new economic system. They should take part in the international competition and cooperate with other areas, but at the same time fully connect to the national “One Belt One Road” strategy. They should improve their trade systems, so that it meets common rules of international investment and trade, and look for new competitive advantages in foreign trade. Regions in the Liaoning Free Trade Zone can achieve development in its foreign trade system by enhance their technologies, investment attractions and intelligence attractions.

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