Exploring possibility of building a pilot free trade zone will be in accordance with China's Belt and Road Initiative
This year marks the 40th anniversary of China's reform and
opening-up, and the 30th anniversary of Hainan as a new province. To
mark the occasion, President Xi Jinping said on April 13 that the
central government will help Hainan explore the possibility of
developing into a free trade zone and building a pilot free trade port.
This significant policy manifests China's resolution to further open up
its economy and promote globalization.
Thanks to the 40 years of reform and opening-up, Chinese society
has undergone a radical economic and social transformation. Now, China's
reform and opening-up have stepped into a new era centering on
Domestically, China is focused on supply-side structural reform
and improving the quality and efficiency of the national economy. After
four decades of reform and opening-up, China has basically established a
socialist market economy, but it still faces the problem of an
incomplete market system, diverse market rules and insufficient market
competition. The main aim of reform, therefore, is to establish a sound
relationship between the government and the market, and allow the latter
to play a leading role in resource distribution.
The Chinese economy faces downward pressure, and the structural
contradictions have become increasingly obvious. So China has decided to
transform its growth pattern and adjust its economic structure.
Exploring the possibility of building a pilot free trade port in
Hainan is a move aimed at promoting supply-side structural reform. By
streamlining the administration and delegating power to the lower levels
as well as establishing a strict supervision system, China could
establish a sound government-market relationship, further reduce
enterprises' costs and establish a convenient business environment. And
further reform and opening-up will help China achieve high-quality
China's existing opening-up policy was gradually established after it
joined the World Trade Organization in 2001. Since then China has
adhered to comprehensive opening-up. Also, it has fulfilled its
commitment to the WTO, by gradually expanding its agricultural,
manufacturing and service markets, reducing tariffs, removing non-tariff
barriers, and strengthening legal, taxation and intellectual property
rights protection systems, as well as establishing a foreign trade
Since the 2008 global financial crisis, international and
domestic conditions have changed drastically, and the demographic
dividends that China enjoyed have gradually decreased. As such, China's
economic development faces severe challenges.
To overcome these challenges, the Communist Party of China
Central Committee advocated the implementation of pre-establishment
national treatment and negative list management system, further opened
up the service sector to the outside world, and expanded access to its
markets, including the banking, insurance, securities and elderly care
China also has established 11 pilot free trade zones. Still, the
CPC Central Committee's decision to help Hainan develop into a pilot
free trade zone and explore the possibility of building a free trade
port are a test for China's new opening-up policy. But the move, if
successful, will help further open up the Chinese economy to the outside
Because of unbalanced global economic development, unilateralism
and protectionism have reared their ugly heads in some parts of the
world. President Xi said in his keynote speech at the Boao Forum for
Asia in April that China won't close the door to the world, which shows
the country's resolve to honor its promise of further reform and
opening-up, in order to improve global economic governance.
Exploring the possibility of building a pilot free trade zone and
a free trade port in Hainan will be in accordance with China's free
trade zone policy and the Belt and Road Initiative, which will help
improve the world order and reform global economic governance.
The author is a researcher at Trade Research Institute, Chinese
Academy of International Trade and Economic Cooperation. The views do
not necessarily reflect those of China Daily.