New measures to further promote Fujian FTZ's reform and innovation

The Fujian provincial government released 35 measures to further promote the reform and innovation in the China (Fujian) Pilot Free Trade Zone (FTZ) on Nov 30, 2018.

The FTZ, established in 2014, is a test bed for reform and innovation, and aims to boost cross-Straits links and promote economic ties between Fujian and the economies involved in the Belt and Road Initiative. It is composed of three areas: Pingtan, Xiamen and Fuzhou.

The concrete measures mainly cover seven aspects: make it easier to invest in the zone, promote innovation in the international trade supervisory system, cultivate new platforms and business types, boost financial innovation to serve the real economy, deepen cross-Straits cooperation, strengthen intellectual property rights protection and legal arbitration services, and spare no effort in the implementation of the measures.

Make it easier to invest in the zone

The FTZ will simplify the procedures for business scope registration. Standardized expressions for the business scope will be launched in the zone and then registrants can check the boxes associated with their business items independently.

It will accelerate the process for providing most of its government affairs services online by sharing data and information on all departments.

It will simplify the examination and approval procedures for industrial products production licenses, and establish a corresponding supervisory system.

The zone is going to boost innovation in the registration of real estate. Housing registration, transaction, and taxation will be done at the same time.

It will further open up its service sector. Requirements on the proportion of foreign technical personnel in foreign-invested enterprises when dealing with construction engineering and design projects will be abolished. Access conditions for foreign-invested companies will be eased, including reducing the total assets of foreign investors in the year before their applications to $100 million and the number of their companies established in China to three.

The zone will pilot a commitment system for enterprise investment projects, which will replace examination and approval with access criteria, and put more emphasis on supervision and service in the middle and late stages of a project.

The practice in Xiamen area that integrates several measurement tasks after project completion into one will be implemented around the FTZ.

The FTZ will pilot an architect responsibility system. Professionals will be responsible for the technical examination of constructional engineering projects; architects and their teams will respond to consultation, design services, project costs and quality control, and credit constraints throughout the project; relevant departments will be in charge of the standard establishment and supervision in the middle and late stages of a project.

Promote innovation in the international trade supervisory system

The zone is to accelerate the upgrading of its "single-window system" in international trade, in which cross-border traders need only submit regulatory documents at one location.

It will further enhance the efficiency and lower the costs for customs clearance. The kinds of papers needed to be checked will be reduced from 86 to 47 when entering or exiting the customs. It is expected that the time for customs clearance by the end of 2021 should be half of that in 2017.

The FTZ will improve customs inspection and release mechanisms to enhance the speed and promote the importers' independent inspection of overseas exporters and manufacturers.

It is suggested that a traceability system for export and import commodities to guarantee their quality by applying big data technologies be introduced.

Cultivate new platforms and business types

The zone is committed to developing new economic platforms, including international trade platforms and spot markets for energy sources, industrial raw materials, and bulk farm products. It will also introduce functional platforms, like enterprises' marketing, distribution and settlement centers.

It will speed up the development of cross-border e-commerce by optimizing the public service platforms in the "single-window system", increasing investment in infrastructure, and build logistics channels with high-efficiency for cross-border e-commerce. Cross-border e-commerce enterprises will report the balance and total volume of trade and detailed electronic data to the departments of foreign exchange on a monthly basis.

The plan says the zone will build a global one-stop aviation maintenance base. Aeronautical maintenance enterprises, which carry out the pilot bonded maintenance business in the FTZ's Xiamen area, will be eligible for the nation's export tax rebate policy, exempted from or have refunded their urban construction tax and additional fees. The customs duty rate for core aviation materials and parts will be reduced.

Intermediary and offshore trade will be explored and conducted in the FTZ.

Boost financial innovation to serve the real economy

The FTZ will expand the cross-border renminbi (RMB) business. It supports financial institutions in the zone lending short-term funds to Taiwan financial institutions. It also encourages financial institutions in Pingtan to carry out direct liquidation between RMB and Taiwan dollars on a trial basis, and allows the domestic foreign exchange accounts of overseas institutions to have time deposits.

It will boost the management facilitation of capital items. The capital item earnings of Taiwan-funded enterprises in the Fuzhou and Pingtan areas can be used for domestic equity investment and foreign exchange registration can be done in banks under the jurisdiction of the province's Administration of Foreign Exchange. The practice that foreign-invested enterprises with a high credit rating can settle foreign exchange inside the Xiamen area or pay directly on the basis of the enterprises' payment orders will be piloted in the area.

It will extend functions of non-resident accounts (NRA). Banks in the FTZ are trying to carry out business in money management, structural deposits, future foreign exchange settlement, and foreign exchange derivatives trading through NRA accounts.

Deepen cross-Straits cooperation

Taiwan-funded enterprises will enjoy treatment equal to that enjoyed by companies on the Chinese mainland involved in the medical treatment, tourism and biotechnology sectors. They can fairly participate in government procurement at all levels in Fujian province by using the Mainland Travel Permit for Taiwan Residents as proof of identity. Legal persons from Taiwan who want to set up enterprises in the FTZ in integrated circuits, high-end medical apparatus and instruments, precision machinery, cultural creativity or modern logistics will be eligible for support from the local government.

The FTZ plan encourages Taiwan compatriots to come to Fujian for employment and entrepreneurship. Taiwan professionals with practicing certificates in architecture, finance, medical treatment and tourism issued by appropriate Taiwan authorities can conduct corresponding business in the FTZ within the business scope of the certificates. It supports extending the range of application of tourist guide certificates for Taiwan compatriots from the FTZ to the whole province, and Taiwan residents to wholly fund and set up non-government and non-profit social service organizations in the FTZ.

It will pilot the introduction of medical-related technologies. Taiwan-funded medical institutions will be allowed to apply new and mature technologies which have been put into clinical use in Taiwan with remarkable curative effects in accordance with the Regulations on Clinical Application of Medical Technology.

Taiwan engineering construction modes will be piloted in the zone. The FTZ supports hiring Taiwan enterprises as major professional service organizations to carry out innovation in construction, fine decoration, electromechanical engineering, quantity surveying, contract consulting and property management.

It will make it more convenient for vehicles from Taiwan to enter Fujian.

A Fujian-Taiwan port cooperation mechanism will be explored in the FTZ, including information sharing and further promoting "self-help" customs clearance at Taiwan passenger inspection channels in Xiamen and Pingtan.

Financial institutions in the FTZ can carry out credit cards and individual credit business for Taiwan compatriots, depending on the province's Credit Report Enquiry System for Taiwan people and enterprises.

The FTZ will expand cross-Straits cooperation in the film and television industry. It encourages Taiwan film and TV industry-related associations to set up branches in Xiamen and Pingtan. A film and television cultural industry base will be established in Pingtan to provide services for cross-Straits and international film training and exhibitions. Preferential policies, including a lower corporate income tax rate (15 percent) for relevant enterprises that comply with the regulations, and a fixed assets investment subsidy, will be conducted in the zone.

Cross-Straits legal cooperation will be strengthened. The plan encourages law offices in the province to set up partnerships with Taiwan law offices. It supports Taiwan law offices establishing branches in the Pingtan area, and Taiwan compatriots who are permitted to practice in mainland law firms to carry out the work of lawyer mediation. It promotes Taiwan arbitral institutions to set up contact points in the FTZ to provide commercial arbitration service for the zone's enterprises.

Cooperation in intellectual property between Taiwan and Fujian will be deepened. Taiwan residents and enterprises will be able to apply for intellectual property patents on the mainland, and Taiwan patent agencies will be encouraged to set up branches in the FTZ and to found a fund for cross-Straits intellectual property operation to boost Taiwan's transformation of intellectual property rights on the mainland.

The FTZ will further take actions to facilitate customs clearance for goods from Taiwan and Southeast Asia via the railways between Fujian and Taiwan or Europe.

Strengthen intellectual property rights protection and legal arbitration services

The FTZ will strengthen intellectual property protection by setting up an intellectual property protection center in Xiamen and an overseas intellectual property information service platform. It will improve the resolution mechanisms for intellectual property rights disputes.

It will enhance legal arbitration services and encourage registered enterprises in the zone to settle their disputes through temporary arbitration in accordance with the "three specific rules": at specific locations on the mainland, following specific arbitration rules and arbitrated by specific personnel.

Spare no efforts to implement the measures

All departments at all levels should cooperate with each other to contribute to the implementation of these innovation measures.

The innovation measures, which have good effects and controllable risks, and benefit a wide range of enterprises, should be rapidly applied to the northeast and southwest parts of the province.

The plan also requires the constant improvement of the comprehensive quality of cadres in the FTZ.