Shanghai pilot for service sector's opening-up

A panoramic view of the Pudong New Area, where China (Shanghai) Pilot Free Trade Zone is located. [Photo/CHINA DAILY]

The State Council has approved a general plan for advancing the institutional opening-up of the China (Shanghai) Pilot Free Trade Zone in alignment with high-standard international economic and trade rules, according to a circular issued last week.

This is the latest move of the Chinese government to promote the high-standard opening-up of the country.

The opening-up measures the Shanghai FTZ is encouraged to pilot this time cover almost all bottleneck issues related to the service trade, including data transfer and cross-border capital management, which are crucial to the high-quality growth of the Chinese economy and the country's further integration into the global system.

Under the framework of a national security management system for cross-border data transfer, financial institutions in the zone will be allowed to transfer data necessary for daily operations overseas.

The zone is required to build data sharing mechanisms to encourage businesses to share data, promoting the innovative application of big data. The zone will also promote cooperation between overseas and domestic institutions, in order to build a digital economy exchange platform for small and medium-sized enterprises.

The zone is expected to refine policies for multinational companies to operate and manage cross-border capital, and support the companies to set up capital management centers. The free trade account system will be improved to ensure the free flow of capital between the Shanghai FTZ and overseas regions.

Notably, the circular stresses that relevant overseas parties can participate on an equal footing in the revision process for the laws and regulations in the Shanghai FTZ.

These measures to open China's service industry represent an important step to align its domestic rules with global conventions by calibrating regulations, management and standards. If these measures can realize their intended effects, they will help effectively strengthen the connection between China and the world market in a move to counter some developed countries' "decoupling" practices targeting China.

The circular provides the Shanghai FTZ with broad space to explore new paths and accumulate new experience for comprehensively deepening reform and expanding opening-up nationwide. The zone is expected to make full use of it to fulfill its duties and hence further consolidate its status as a major growth engine and a trailblazer on the path of high-quality development.