The FTZ is a special designated area where normal trade barriers, such as tariffs, are removed. FTZs not only help companies save money, but favorable policies, like tax benefits, help attract new business and foreign investment.
Building FTZs is an important part of China's strategy to further develop the nation. Since the first FTZ was set up in 2013, this effort has proven fruitful. Even amid an economic downturn this year, China's pilot FTZs attracted robust foreign investment and trade in the first seven months. During this period, these FTZs reported and actual use of foreign investment of over 90 billion yuan, according to the Global Times.
Generally, FTZs are organized around seaports and international airports. All of the business located in FTZs, such as stores and restaurants, benefit from the policies. For example, the price of an imported car sold in and FTZs is nearly 30 percent cheaper than the market price, according to Xinhua. In addition, FTZs can offer better medical services in foreign-funded hospitals. These areas will also open up more job opportunities in foreign-founded companies.
Establishing more FTZs "shows that China hopes to promote a higher-level opening-up", said Zhou Mi from the Ministry of Commerce.
From the coastal areas to the central inland regions, each of the three new FTZs has its own strategic development goals.
For instance, the Beijing pilot FTZ will focus on trade in services and include a pilot area for the digital economy. Human's FTZ aims to build a world-class advanced manufacturing hub. The pilot FTZ in Anhui will promote more scientific and technological innovation.
Moreover, combined with its geographic advantage, Hunan's FTZ plays an important role in the trade corridor linking the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao Greater Bay Area, while Anhui's FTZ will promote the development of the Yangtze River Delta.
