Shanghai FTZ spearheads opening-up ideas

Pilot zone proves valuable in applying innovative policies

The China (Shanghai) Pilot Free Trade Zone, the first of its kind in the country and which celebrated its fifth anniversary in September, is sharing its practical experiences nationwide to support China's further opening-up and reform.

To date, 127 innovation and reform policies have been adopted across China, many of which were initially adopted in Shanghai, according to the authority. Its experiences have been replicated in the 11 other FTZs in China, of which Hainan is the newest receiving approval in October this year.

In the past five years, the Shanghai FTZ has created many Chinese firsts. It spearheaded the country's efforts to streamline business registration as well as speeding up customs clearance and corporate supervision. China's first negative list to widen market access for foreign investment was introduced in the FTZ in 2013.

The FTZ's efforts in testing innovative policies have brought opportunities for companies from many sectors, including cosmetics and pharmaceuticals.

For instance, a policy, unveiled in the Shanghai FTZ in March last year, cut approval times for imports of non-special use cosmetic products from three months to a few days. The policy has allowed many foreign cosmetic brands to bring their latest seasonal products to the Chinese market, enabling Chinese customers to buy the products at the same time as their global counterparts.

Tu Chunyi, vice-president for product safety, regulatory affairs and claims at L'Oreal Asia, has welcomed the changes.

"The creative alteration of the import process has saved at least three months for our companies, as imports and sales activities can be undertaken right after registration. In the meantime, all the administration requirements for product safety have not been lowered or changed," she said .

According to Tu, up to 200 kinds of cosmetic products under various L'Oreal brands have been imported via the new registration policy to China by the end of September.

Statistics from the Pudong market supervision bureau show that a total of 237 overseas companies from 32 countries and regions had imported their non-special use cosmetic products through the registration system as of the end of June.

The cross-border e-commerce platform Bauhinia Valley KJT, also known as Kuajingtong, adopted in the Shanghai FTZ and operated by International Merchandise Exchange& Exhibition, is also enjoying the benefits from the FTZ's innovation of its supervision model.

According to the company, goods imported through cross-border e-commerce platforms in the FTZ will enjoy lower import tax rates. In addition, a "filing for record" approach has been implemented to replace the previous examination and approval approach.

"The model innovation allows more import products to enter into Chinese market to serve people's varying demand," said Yan Jin, vice-president of Kuajingtong.

The platform, one of the first 25 businesses launched in the FTZ in 2013, offers nearly 100,000 types of imported products from more than 50 countries and regions.

The FTZ is also committed to developing a "one-stop processing" service model to provide more convenience to businesses.

Its international trade "single window" system, a streamlined administration system that allows export and import procedures to be performed on one electronic platform, has reported outstanding results.

"The platform was set up to facilitate smooth foreign trade and improve the business environment in terms of cargo clearance procedures," said Liu Hong, assistant president of E&P International, the developer of the platform. "It reduces documents needed from traders by using paperless customs declarations, examinations and tax payments."

Through the system, shipment declaration processing time has been shortened from 24 hours to just 30 minutes; the shipping declaration time has been reduced from two days to two hours, according to E&P.

The mechanism can be used for shipment importing and exporting, payment and settlement, data sharing and a dozen other processes.