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China to relax rules for foreign companies in FTZs
December 26, 2014, 5:22 am

China will create three new free trade zones modelled on one established a year ago in Shanghai [Xinhua]

China will create three new free trade zones modelled on one established a year ago in Shanghai [Xinhua]

In a bid to boost trade and exports, China may ease investment rules in three planned free trade zones (FTZs) after approval from Chinese lawmakers, said Commerce Minister Gao Hucheng in Beijing.

The Chinese Cabinet (State Council) proposal to temporarily adjust regulations on administrative approvals in three FTZs has been put forward to the National People’s Congress (NPC) Standing Committee.

The relaxation of rules will apply to three proposed free trade zones in south China’s Guangdong Province, southeast China’s Fujian Province and north China’s Tianjin Municipality as well as the existing Shanghai FTZ.

China will create three new free trade zones modelled on one established a year ago in Shanghai. The zone is a testing ground for a number of economic policy changes, including relaxed restrictions on many industries.

China’s Cabinet plans to remove an administrative approval for foreign companies that want to set up ventures in these zones, said the Commerce Minister.

Instead, these companies will only need to report their business plans to authorities, Gao said.

Since these preferential policies conflict with the current laws on foreign companies, Sino-foreign joint ventures and Taiwan investors, the Cabinet will ask for the legislature’s approval to adjust regulations in the FTZs, he said.

China’s cabinet has promised more economic experiments would be conducted within the FTZs to encourage foreign investment and the development of advanced manufacturing and the service sectors.

The Chinese economy will adapt to the “new normal” of slower speed but higher quality, China’s Communist Party said at a key meeting on economic policy this month in Beijing.

Gerry Rice, spokesperson of the International Monetary Fund (IMF), said in September this year the IMF has “recommended the (Chinese) authorities could accept a range of 6. 5 to 7 per cent for growth target in 2015.”

A slower economic growth in China in the near term is a price worthwhile for a more sustainable growth and higher income in the future, said Rice.

 

TBP and Agencies 

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