Boost for business hub
Premier encourages reforms to increase trade with Taiwan-based enterprises, writes Vivian Zhang
The opening of the Xiamen Area of the China (Fujian) Pilot Free Trade Zone (Fujian FTZ) received special attention from the central government. On April 22, a day after the official opening, Xiamen hosted Premier Li Keqiang, who discussed with local FTZ officials how to streamline the commercial system, and also encouraged them to continue their reform efforts.
The Fujian FTZ is one of three new FTZs, along with those in Guangdong and Tianjin, inaugurated by the central government in March, less than two years after the first FTZ in Shanghai. Apart from Xiamen, the Fujian FTZ includes Fuzhou and Pingtan.
The Fujian FTZ builds on the Shanghai model. It has put into place most of the ways Shanghai streamlines administrative procedures, from investment administration to opening the service sector and easing the trading process.
These are expected to help enterprises to save time and money.
"It now takes only three days for a new company to complete the registration process," says Huang Zhonghua, head of the Industrial and Commercial Bureau of the Xiangyu Bonded Zone.
Local officials anticipate that the Fujian FTZ could draw enterprises from around the region. According to Zhang Canmin, deputy mayor of Xiamen, the area is already home to more than 5,400 businesses with a registered capital in excess of 44 billion yuan (HK$55.7 billion).
During his visit, Li told Taiwan-based enterprises that the FTZ would offer favourable policies to investors from the island. Under the State Council's official plan, the Fujian FTZ would be aimed at Taiwan-based enterprises in the areas of advanced manufacturing, new industry and the services sector. It also encourages local enterprises headquartered in the FTZ to invest in Taiwan.
Hong Yongmiao, dean of the economics school and the Wang Yanan Institute for Studies in Economics at Xiamen University, points out that Fujian plays a significant role in currency settlements between the yuan and the new Taiwan dollar, and the success of the FTZ would be judged in part by how effectively it serves as a passageway for capital. The fluidity of capital transactions within the FTZ, he adds, would provide tangible benefits to the west side of the Taiwan Strait.
While the pace at which the Fujian FTZ grows remains to be seen, it is expected to drive the overall development of Xiamen and Fujian, while deepening economic ties across the Taiwan Strait.