Zhejiang free trade zone keeps chugging on
Zhou Yuhan, a senior manager with CNOOC Zhejiang Ningbo LNG Co., Ltd., was amazed at the high efficiency and superb business environment his company witnessed in the Ningbo area of the Zhejiang free trade zone. This was especially so during the construction of his company’s recently launched bonded LNG warehouse, the first one of its kind in Zhejiang.
“It took only eight months between our first application and the final acceptance test of the warehouse. It’s really an amazing and stunning speed,” Zhou said.
China (Zhejiang) Free Trade Pilot Zone in Zhejiang province has been making a great effort to further liberalize trade in the area and promote common prosperity and integration of the Yangtze River Delta region.
The zone was expanded last year after receiving approval from the State Council to add Ningbo, Hangzhou and JinhuaYiwu areas to its existing Zhoushan area.
The zone, set up in Zhoushan in 2017, was then made up of both inland and waterside areas covering 29,640 acres. Last year the Zhejiang zone doubled its size when the three new areas were added.
In the first half, the zone added 24,827 market entities, up 100.7% year-on-year, accounting for 8.6% of the newly added market entities in the province, and contributing 11.4% to the province’s foreign investment.
Currently, the four areas in the zone have different development goals.
The Zhoushan area has been forming a complete industrial chain for the oil and gas industry. The Ningbo area focuses on the development of oil and gas, new materials, international shipping, global supply chains, foreign trade and intelligent manufacturing.
The Hangzhou area has been accelerating the development of the digital economy, and the Jinhua-Yiwu area has been building a new international trade center.
The Hangzhou area has attracted 97 projects with a combined investment of 75.4 billion yuan ($11.8 billion) over the past year, including six projects invested by Global Fortune 500 companies.
The new factory of Hangzhou Panasonic (Comprehensive Bonded Zone) Co., Ltd. was the first Global Fortune 500 project to break ground in Hangzhou area, with construction beginning in June.
With a total investment of 300 million yuan, the 4.9-acre smart home appliance manufacturing factory is expected to be put into operation in April next year and generate nearly 8 billion yuan in production value in five years.
It is the attractive preferential policies and favorable business environment in the Hangzhou area that have attracted so much investment.
The clustering of market entities has also laid a foundation for more preferential policies becoming available.
Given that more companies involved in the biomedical industry have settled in the area, Hangzhou published measures in July to support the industry in pharmaceutical research and development, as well as overseas sales, which will be first implemented in the Hangzhou area.
“Since the Ningbo area opened, 35 major projects with a total investment of 23.6 billion yuan have landed there, and we have worked around the clock to secure our position in project introduction and facilitation,” said Zhang Yan, director of the Office of Free Trade Zone in Ningbo.
Over the past year, the Zhejiang zone has introduced more than 40 preferential policies in terms of finance, taxation, talent and other areas to facilitate reform and opening-up.
The zone’s Hangzhou area reformed the cross-border retail supply chain by integrating cross-border retail imports with product processing, which enables suppliers to process their products in the bonded area. Due to the system, PT Swift, a brand of edible bird’s nests, built a production line in the Hangzhou area last year. It can import raw materials from Malaysia, then process directly in the factory after receiving an order and the freshly stewed products are delivered to consumers the next day.
The Ningbo area was the first to join the Qualified Foreign Limited Partner (QFLP) program in the province last year, which encourages foreign investors to get involved in domestic equity investment programs.
The Zhejiang zone has launched 102 major projects, involving a total of 358 billion yuan in investment. It plans to develop the zone into a demonstration zone for the development of the digital economy. Under the plan the demonstration zone initially includes the entirety of Hangzhou, the first comprehensive cross-border e-commerce pilot area in the country, and adds Ningbo this year and Jinhua next year.
The Jinhua-Yiwu, Ningbo and Zhoushan areas are jointly building the Yiwu-NingboZhoushan corridor, which will become an economic powerhouse that helps form a new trade mode of small and bulk commodities.
“Building Zhejiang into a demonstration zone for achieving prosperity calls for the interconnected development between areas in the Zhejiang zone,” said Hu Zhenfang, deputy director of the Zhejiang Provincial Department of Commerce.
To stimulate the development of surrounding areas in Zhejiang province, six interconnected innovation areas, Hangzhou, Ningbo, Wenzhou, Jiaxing, Jinhua and Taizhou, were approved by the Zhejiang provincial government in 2019.
The second batch of interconnected innovation areas was announced in June, including Huzhou, Shaoxing, Quzhou and Lishui.