On April 1st, the China (Sichuan) Pilot Free Trade Zone has turned two years old. What has been achieved over the two years? The data and cases can come as an answer: over 95% of the 159 reform and trial tasks assigned by the central government has been implemented, and more than 400 practical cases have been formed, including some ground-breaking reforms like the “Unimpeded Access with the First Certificate” reform for administrative examination and approval, “One Bill-of-Lading System” for multimodal transportation. To see the overall picture of this “test field”, we need to take a deeper and multi-dimensional perspective – what’s the current position of the achievements made by the test field? What impact have these achievements brought? What are the areas possible for further exploration?
The reporter interviewed experts and workers at the frontline inside and outside the province, and took stock of the achievements of Sichuan Pilot Free Trade Zone from four dimensions for the past two years to get a picture of its footprint in the process of comprehensive reform deepening and opening-up expansion in Sichuan and beyond.
Chengdu Tianfu New Area
Districts under Direct Management of Tianfu New Area
Data
From April 1st of 2017 to the end of February 2019, the number of enterprises has totaled 6,125, including 6,096 domestic-funded ones and 29 foreign-funded ones; the registered capital of domestic enterprises was 168.591 billion yuan, and 57 institutional innovation cases were formed in two years.
Highlights
● “Unimpeded Access with the First Certificate” reform for administrative examination and approval
● "7+1" mode, promotion of standard publicity among grassroots governments from multi-fields
High-tech Zone
Data
As of February 28th, 2019, a total of 38,669 enterprises of various types were registered, with a registered capital (amount) of 388.56 billion yuan. Chengdu High-tech Comprehensive Bonded Zone has secured a total import and export volume of 311.5 billion yuan, leapfrogging to the first place in the national comprehensive bonded Zones.
Highlights
● "Winpower" technology financial service platform
● The first "corporation bond of innovation and enterprise" for inter-bank market in the country
Shuangliu District
Data
From April 1st, 2017 to the end of February 2019, 1,554 enterprises have been approved for registration, including 1519 domestic-fund ones and 35 foreign-funded ones. The registered capital of domestic-fund enterprises was 47.84 billion yuan.
Highlights
●A total of 56 innovative cases were formed, including the “transformation of imported non-exclusive approval and examination for filing” and aviation bonded leases, both of which achieved the first in the province.
●It has taken the lead in piloting collaborative management of low-altitude airspace across the country, and in introducing the new mode of "visual autonomous flight".
Chengdu Qingbaijiang Railway Port Area
Data
The area has seen more than 4,300 newly registered companies and around 4,000 international trains since April 1st, 2017. Bonded Logistics Center (Type B) has processed 18,000 import and export businesses, with a value of 6.5 billion yuan, and handled more than 100,000 cross-border e-commerce deals, of which over 3,500 finished vehicles have been sent abroad and brought in.
Highlights
●"One Bill-of-Lading" reform for the multi-modal transportation of China Railway Express
●Introduction of the new mode of "containerized and concentrated transportation" of China Railway Express
●The country's first sea-rail intermodal transportation for vehicle importation
South Sichuan Port Area
Data
139 out of 141 trial tasks laid out in the “Overall Plan” have been implemented; 215 innovation achievements (104 in 2018) and 27 national initiatives have been formed, of which 10 has been promoted in the province. 6,158 enterprises have been newly established with a registered capital of 62.6 billion yuan
Highlights
●Hour List for Enterprise Registration
●Advanced export tax rebate for manufacturing enterprises
Take a horizontal view of the whole country
According to the innovation index of pilot free trade zones issued by a third party, Chengdu area topped the list among the third batch of free trade pilot zones, and South Sichuan Port Area ranked 9th.
Up to now, there are a total of 12 pilot free trade zones across the country. Overall speaking, what’s the ranking of the Sichuan Pilot Free Trade Zone?
The official meetings offer a special perspective. Last year, the Ministry of Commerce held the first National Exchange Meeting for Pilot Reforms in PFTZs in Chengdu; this year Sichuan acted as the only representative of the 12 PFTZs in China to exchange experience at the national foreign investment conference... "Sichuan’s repeated exposure has shown indirectly that its exploration was very fruitful in the country.” Ge Shunqi, Deputy Director of the Research Center of (China) Pilot Free Trade Zone of Nankai University remarked.
Third-party agencies outside Sichuan conducted more systematic researches. The Institute of Free Trade Zone of Sun Yat-sen University has recently issued the “2017-2018 China Pilot Free Trade Zone Institutional Innovation Index”. Shi Xin, one of the main researchers of the project, and Assistant Director of the Institute of Free Trade Zone of Sun Yat-sen University, told the reporter that among the third batch of PFTZs (15 areas) established in sync, Chengdu ranked the first and South Sichuan Port Area ranked the 9th. “Overall speaking, the Sichuan Pilot Free Trade Zone has led other FTZs of the country with its unique features.”
What exactly has the Zone achieved? Shi Xin said that the Chengdu region was out in front in the third batch of PFTZs in terms of “investment facilitation” and “financial management and service innovation”, and secured the third place in “trade facilitation” and “government function transformation”. “The Chengdu region has explored a lot of institutional innovations in the reform and improvement of investment system and environment, and has made many breakthroughs especially in terms of market access and commercial registration; innovation of financial service has also reported remarkable results.”
Take a vertical view on development
In the past two years, it has made many pioneering efforts in the collaborative opening-up between the inland and areas along the coasts, borders and rivers.
On examining the progress of the Sichuan Pilot Free Trade Zone, experts suggested “inland opening-up” as the entry point. The reason is very simple: the starting point and the end of the Pilot Free Trade Zone are to open wider to the outside world. The implementation of collaborative opening-up between the inland and areas along the coasts, borders and rivers represents the biggest trait of the Sichuan Pilot Free Trade Zone. "This alone has set the tone for Sichuan to explore a differentiated path for inland opening-up in the country", said Li Jian, a researcher at the International Trade and Economic Cooperation Research Institute of the Ministry of Commerce.
Ge Shunqi believed that Sichuan has done a lot of initiative explorations around collaborative opening-up between the inland and areas along the coasts, borders and rivers.
Sichuan has achieved something out of nothing in the construction of the passages. Last year, the China Railway Express (Chengdu) put into operation 2000 trains for the first time in history, ranking the first in the country compared with other stations of China Railway Express; Luzhou opened the sea-rail intermodal train to Guangzhou, Guangdong, and Qinzhou, Guangxi in succession. Experts pointed out that this attempt of Sichuan indicates its endeavor to connect itself with the land and maritime silk roads, and to open up new routes to Southeast Asia and to Europe for inland and maritime trades, which would fundamentally eradicate its inferior inland location.
Sichuan has also achieved something out of nothing in the establishment of the "new rules." On the one hand, it has benchmark itself against these new rules. Luo Ling, Dean of the Sichuan Institute of Industrial Economic Development, believed that in the past two years, the Sichuan Pilot Free Trade Zone has done a lot of “alignment” work, and carried out drastic moves to remove obstacles that restrict the flow of production factors and touched upon the “insufficient marketization of inland areas compared with the coastal areas”. It has arrived at fruits such as the administrative examination and approval reform of the “once-for-all errand” and “Unimpeded Access with the First Certificate”. On the other hand, it has created new rules, such as its first attempt to launch the "one bill-of-lading" reform of multimodal transportation, which was regarded as a typical representative of the new rules of international land trade.
Foreign-invested enterprises are the barometer when it comes to the achievement of opening-up. According to the relevant person in charge of the Provincial Free Trade Office, more than 300 foreign-invested enterprises were newly established in Sichuan Pilot Free Trade Zone upon its one-year anniversary of establishment, and that figure moved up to more than 600 upon its two-year anniversary, thus a steady growth has been maintained.
Take a retrospective view at the fruits
Most of the 400 empirical cases or more are formed with low risks and tremendous effects from a small starting point, which has laid the foundation for subsequent reforms.
The Sichuan Pilot Free Trade Zone has formed more than 400 practical cases over the past two years. Deng Fuhua, Assistant Dean of the Comprehensive Research Institute of China (Sichuan) Pilot Free Trade Zone of Southwestern University of Finance and Economics, found through comprehensive organization that most of these cases are generated with low risks and tremendous effects from a small starting point.
How to understand "low risks and tremendous effects from a small starting point"? "Simply speaking, it involves some amendments or breakthroughs based on the existing institutional framework. It is often not a systematic reform encompassing a wide range of issues, nor will it encounter risks by overthrowing the current regulations, but its effect is immediate." Deng Fuhua said.
A typical example is the transformation of government functions represented by “streamlining administration, delegating powers and improving services”. Many experts said that Sichuan has made significant advances in “improving services”, represented mostly by “consolidation and optimization of relatively simple processes”; while it still lagged behind in “streamlining administration and delegating powers”.
Many experts believed that is a normal phenomenon. "The pilot reforms always advance step by step from surface to deep levels. Under the premise of strict risk control, it approached from a relatively safe field which is conducive to laying the foundation for subsequent reforms, and helping the public to maintain a good expectation at the same time", said Shi Xinxiang.
Take a forward-looking perspective into the future
The trial initiatives of Pilot Free Trade Zone have come to the juncture. How to cope with the situation? Experts have suggested 3 "plans".
Many experts also mentioned that the trial initiatives of Pilot Free Trade Zone have come to the juncture. “The apples within reach have been picked almost over.” A person in charge of the Chengdu Management Committee of the Sichuan Pilot Free Trade Zone said that the establishment of a credit-based corporate governance system requires cross-regional, cross-sectoral, and cross-level integrated Innovation, some trials would even violate the current regulations. This has put forward new challenges for the work of the Sichuan Pilot Free Trade Zone.
How to cope with the situation? The interviewed experts have suggested 3 "plans".
On making courageous moves, the establishment of a scientific fault-tolerant mechanism is recommended. When these trials arrived at the juncture, how to address "fear of responsibility, lack of courage to move on"? Many experts mentioned the importance of a framework for the protection of the rule of law. In March of this year, the China (Sichuan) Pilot Free Trade Zone Regulations (Draft) was submitted to the Standing Committee of the Provincial People's Congress for the second deliberation, in which articles were laid out for fault-tolerance and correction. "At present, Zhejiang is the only province in the third batch of PFTZs to issue relevant regulations. Sichuan can step up its efforts and provide operational details to relax frontline personnel." The person in charge said.
On the ability of taking such initiatives, applying for national differentiation policies and increasing the delegation of powers are recommended. “Sichuan’s grassroots experiment demonstrates high motivation, but unbalanced distribution of powers and responsibilities should be guarded against.” Shi Xinxiang said that at present, 142 provincial-level administrative authorities have been decentralized in Sichuan, which is lower than the third batch of PFTZs. It should intensify efforts in this regard. As for application submitted to superior organs, an industrial insider mentioned that the some zone of the third batch of PFTZs has obtained the first-hand pilot authorization. "Taking the nation as a whole, reform fruits emerged continuously last year in transportation, which had something to do with the previous decentralization of powers."
On smooth implementation of these reforms, we should strengthen the coordination among administrative regions and departments in the Sichuan Pilot Free Trade Zone and establish a new integrated mechanism for the remove of obstacles.
