A free trade zone (FTZ), also called foreign-trade zone is a specific class of special economic zone. It is an area which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities. Free-trade zones are organized around major seaports, international airports, and national frontiers-areas with many geographic advantages for trade. It is a region where a group of countries has agreed to reduce or eliminate trade barriers.
Free trade zones can be defined as labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products. China’s first free trade zone was opened in Shanghai in 2013 and was seen as a milestone in doing business in China. It replaced the previous “low-cost land policy” of the more traditional industrial zones and is used to try and explore policies for modernizing Chinese businesses. After that, several other free trade zones have been launch in April 2015, which include Tianjin, Guangdong and Fujian. Each of the locations was not chosen randomly, but serves a specific purpose.
Tianjin Free Trade Zone advantages
The free trade zone was established in the municipality of Tianjin and it is covers an area of approximately 119 square kilometers. The aim is to boost Tianjin in the China-Mongolia-Russia economic corridor. The main activities in the free trade zone include high-end manufacturing; R&D and technology transfer; financial leasing and international shipping and logistics. This free trade zone is aims to develop a high-level platform for development of the Beijing- Tianjin-Hebei region and opening up the region for institutional innovation throughout China.
Guangdong Free Trade Zone advantages
The zone is located in the coastal province of Guangdong and it will seek to further integrated mainland China with Macau and Hong Kong. Specific to the Guangdong FTZ is the focus on shipping. The zone is mainly focuses on the financial industry, customs clearance and opening up maritime trade routes to Europe and Africa. The Guangdong FTZ is comprised of three sections: Hengqin in Zhuhai (opposite Macau), Qianhai and Shekou in Shenzhen (opposite Hong Kong) and Nansha in Guangzhou. Part of each of these sections is a bonded zone. Bonded zones are treated as being outside of the Chinese Customs area.
Shanghai Free Trade Zone advantages
Shanghai is located in the Pudong New Area of Shanghai in August 2013, it was the first city to be given the opportunity to trial a free trade zone; with fewer restrictions it was hoped that it would bring more foreign investment into China and take the focus away from Hong Kong, where the government has less control. The zone is providing logistics services that include vast space for warehousing facilities, procurement and distribution and supply chain management. It incorporates four other sectors-specific areas namely Free Trade Zone bonded area; Lujiazui financial district, Jinqiao export processing zone and Zhangjiang high tech park.
Fujian Free Trade Zone advantages
Fujian Free Trade Zone was established in December 2014, it cover at least 118 square kilometers. Enjoying a geographical advantage, the zone is designed to strengthen the economic relationship between the mainland and Taiwan following the signing of the Economic Cooperation Framework Agreement (ECFA) in 2010. Fujian Free Trade Zone is focusing on advanced manufacturing; international shipping, tourism and financial innovation cooperation. Besides, Fujian’s rich land and labor resources have a great advantage to labor intensive industries.
Contact Us
If you have further enquire, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com.
Previous：Hong Kong Bank Account Opening Overview
Next：WFOE in China