Why were free trade zones created in China?

Why were free trade zones created in China?

After China, US trade war China started to set up the new free trade zones. In this article, I explained (Why were free trade zones created in China?)

According to the Ministry of Commerce’s interpretation of China’s strategy of accelerating the global free trade zone.

The number of free trade zones around the world is currently increasing, the topics covered are rapidly expanding, and the level of liberalization has increased significantly.

China’s economic development has entered a new normal, and foreign trade development opportunities and challenges coexist, bringing in and “going out” are facing a new development situation.

Speeding up the implementation of the free trade zone strategy is an objective requirement for China to adapt to the new trend of economic globalization, and an inevitable choice for comprehensively deepening reforms and building a new open economic system.

  Professor Zheng Xiaojun, a well-known overseas investment expert, recently accepted a special report from domestic reporters.

He also mentioned that in the current global and regional economic governance pattern.

Advanced economies are trying to advance certain free trade zone negotiations through TPP, TTIP, and EU-Japan Free Trade Zone negotiations.

The economic integration process led by these big countries has gained new global competitive advantages.

For China, the biggest impact will be that it will be more difficult for domestic companies to export abroad. For example, the textile and apparel trade, auto parts, and other fields will face impact.

In addition to the lack of price advantage due to tariff factors, they will also be more severely affected.

Legal and social discrimination, because TPP is not just a trade tariff agreement.

But covers various fields such as tariffs, investment, competition policy, technical trade barriers, food safety, intellectual property, government procurement, green growth, and labor protection.

If China wants to better safeguard its national interests and cultivate new international competitive advantages.

It must adapt to the trend of economic globalization and regional economic integration, and accelerate the implementation of the free trade zone strategy.

Speed ​​up the negotiation of new topics such as intellectual property protection, environmental protection, e-commerce, competition policy, and government procurement.

Only by accelerating the formulation of new issues and rules in the field of promoting fair trade and sustainable development can we gain more voice.

If Chinese companies want to go global, they must seek overseas to establish a real world free trade zone.

Taking the “Caribbean Free Trade Area” (a free trade business park initiated by Antigua and Barbuda and participating in the construction of member states of the Caribbean Community).

As an example, the five elements of free trade (goods trade, service trade, capital, investment, Among enterprises), trade in goods is completely free of tariffs, trade in services is completely free.

Capital flows and foreign exchange exchanges are completely unrestricted, there is no negative list for direct investment, and corporate and personal taxes are free.

The successful construction of the Caribbean Free Trade Zone is equivalent to the establishment of a bridgehead and base in the Caribbean Sea.

Enterprises only need to do business in the past.

Why is the degree of freedom of the regression sum of squares in the F test method 1

I really want to understand. . In the unary linear regression model. . . The degree of freedom for the sum of squared deviations is n-1. 

Then the degree of freedom of the regression sum of squares is determined by the number of x. .

Because there is an x ​​in the unity, the degree of freedom is one. . The residual sum of squares is the total deviation of the sum of squares minus the degree of freedom of the regression sum of squares is n-2

The benefits of trade liberalization

Free Trade:

Trade liberalization refers to the gradual reduction of restrictions on the import of foreign goods and services by a country, and the process or result of providing preferential trade treatment for imported goods and services. 

Both the GATT in the past and the WTO now aim at trade liberalization.

The theoretical basis comes from the comparative advantage theory of Adam Smith and David Ricardo.


It can bring about a competition mechanism. On the one hand, competition can improve service quality, improve management, and reduce costs; on the other hand, it is conducive to the introduction of advanced technology and management experience in order to further improve the professional level of services.

The service sector in which countries have comparative advantages can be further specialized, improved efficiency, and better achieve economies of scale on a global scale, thereby accelerating the development of the sector and improving international competitiveness.

Through trade liberalization, service providers are encouraged to give full consideration to the needs of consumers, improve service quality, and reduce costs, so that consumers will benefit and enjoy low-cost and high-quality services.

The liberalization of service trade has promoted the vigorous development of the service industry and created more new job opportunities.

Trade liberalization promotes policies and regulations of various countries to further increase transparency and predictability and is conducive to the introduction of long-term foreign investment and technological equipment.

What are the benefits of the China-ASEAN Free Trade Area to China?

1. The liberalization of trade in goods promotes the liberalization of trade in goods through the determination of tax reduction models,

The determination of rules of origin, and the adoption of non-tariff measures to effectively eliminate trade barriers, simplify customs clearance procedures, and avoid duplication of testing and testing;

2. Service liberalization The basic principle of service liberalization in the China-ASEAN.

Free Trade Area is to further strengthen service cooperation between each other on the basis of the scope of the WTO Service Trade Agreement.

Reduce service trade restrictions, and improve the depth of service industry liberalization.

The breadth has been expanded. China and ASEAN countries can appropriately relax restrictions on service trade.

Especially strengthening cooperation in tourism services, distribution services, and business services.

The service industries such as finance, insurance, and telecommunications will steadily advance in accordance with GATS regulations and WTO commitments.

The provisions of the China-ASEAN Free Trade Area for service trade should generally include national treatment.

Most-favored-nation treatment, non-discriminatory treatment, conditions for establishing business offices, quantity restrictions, retention clauses, and restrictive clauses.

Since telecommunications and finance are relatively sensitive service sectors, in the content of the agreement.

NAFTA can be referred to separately for financial and telecommunications to list industry by-laws and commitment lists.

3. Investment facilitation Promoting the flow of capital within the region and enhancing the attractiveness of FDI outside the region are the goals of the China-ASEAN Free Trade Area Investment Framework

Agreement. China and ASEAN will strengthen cooperation in increasing the transparency of investment rules and management and establishing an investment system conducive to the free flow of capital.

The scope of application of the China-ASEAN Free Trade Area Investment Agreement is direct investment, and investment restrictions and equity provisions are subject to domestic investment laws and regulations of various countries.

The process of investment liberalization must be ahead of the targets set in the APEC Bogor Declaration.

The possible benefits of a free trade zone to foreign capital include two aspects: on the one hand, for market-based investment.

The establishment of a free trade zone will undoubtedly expand the market for foreign trade companies, and companies investing in any member country can enter members at a lower cost.

On the other hand, it has improved the ability to integrate highly-relevant industrial resources, and foreign-funded enterprises can allocate corporate resources in the free trade zone and reduce production costs.

In order to enhance the attractiveness of free trade zones China to foreign investment.

In addition to relaxing restrictions on transparency, foreign equity restrictions, local content requirements, export performance requirements, and profit remittances.

The free trade zone investment framework agreement should also provide for the flow of technology within the region.

Facilitate the flow of capital and professional and technical personnel.

With reference to the ASEAN Investment Area Framework Agreement (AIA), in order to promote the liberalization of investment in the region.

The China-ASEAN Free Trade Area will apply the principle of national treatment to investors from all member states in the region before 2010 and open all industries to member states.

It applies to all investors from 2020 and promotes the free flow of capital, skilled workers, experts, and technology.

In order to protect national security and public morals, the life or health of humans, animals, plants, and the protection of personal privacy can be included in a comprehensive routine list.

Agriculture, forestry, fisheries, and mining can be included in the temporary routine list, which will be opened before 2005, and appropriate time limits will be given to new ASEAN members.

Finance, telecommunications, public services, etc. can be included in the sensitive list, and the market will be gradually opened in accordance with WTO commitments

Introduction of Four Free Trade Zones in China

The Guangdong Free Trade Zone focuses on Hong Kong and Macau and will establish an innovative system for financial cooperation between Guangdong.

Hong Kong, and Macau, and liberalize trade in services between Guangdong, Hong Kong, and Macau.

The total area of ​​the free trade zone reached 116.2 square kilometers, including Nansha New Area, Qianhai Shekou Area, and Zhuhai Hengqin New Area.

Goal After three to five years of reform and experimentation, we will strive to build a free trade zone.

That meets international high standards of the legal environment, convenient investment and trade, prominent radiation driving functions, and safe and efficient supervision.

 Fujian Free Trade Zone

As the province closest to the mainland and Taiwan, Fujian focuses on connecting with the Taiwan Free Economic Zone and building the Maritime Silk Road.

The Fujian Free Trade Zone includes three areas in Xiamen, Pingtan, and Fuzhou, covering a total area of ​​118.04 square kilometers.

The goal of the Fujian Free Trade Zone is to, after three to five years of reform and exploration.

Strive to build a free trade park with convenient investment and trade, outstanding financial innovation functions, a sound service system, efficient and convenient supervision, and a standardized legal environment.

Tianjin Free Trade Zone

As the first free trade zone in the North, Tianjin’s strategic positioning will be linked to the coordinated development of Beijing, Tianjin, and Hebei.

The development goal of the Tianjin Free Trade Zone is to build a pilot free trade zone into a free trade zone.

Convenient investment, high-end industry agglomeration, perfect financial services, standardized legal environment, efficient and convenient supervision, and obvious radiation driving effects after three to five years of reform and exploration.

The first-class international free trade zone in Beijing will play an exemplary and leading role in the coordinated development of

Beijing-Tianjin-Hebei and my country’s economic transformation and development.

Shanghai Free Trade Zone

The expansion plan of the Shanghai Free Trade Zone was approved by the State Council in December last year.

The Shanghai Free Trade Zone expanded from 28.78 square kilometers to 120.72 square kilometers, and its coverage was expanded to Lujiazui, Zhangjiang, and Jinqiao areas.

 At the same time, the requirements for the degree of openness of the Shanghai Free Trade Zone have been further improved, including not only the facilitation of investment and trade but also the freedom of currency exchange in the financial sector.

In response to the new situation of world economic development, the Caribbean Free Trade Area prepared and launched the World Free Trade Area Federation.

The World Federation of Free Trade Areas will help to improve the overall liberalization level of the world’s respective trade zones, actively promote.

The establishment of free trade zones around the world, promote a substantial increase in the foreign trade volume of countries around the world.

And radiate global free trade in the five continents countries The regional network enables the liberalization and facilitation of most foreign trade and two-way investment.

Causes of Created Free Trade Zone in China

The emergence and development of free trade zones have profound historical, economic, political and cultural reasons.


The United Kingdom pursues a free trade policy. From the middle of the 18th century to the middle of the 19th century.

Britain completed the first industrial revolution, experienced several serious economic crises, established a global colonial system.

Formed a world market dominated by Britain, and implemented a free trade policy instead.

Britain expanded its markets in Asia and Africa and required all countries to open up trade and investment markets;

launched the first Opium War in 1840 and forced China to open ports and trade with the gunboat policy;

issued export credits to the United States, Germany, and other countries to encourage countries to buy British locomotives, Ships, and equipment that are protected for overseas investment.

Britain abolished the “Corn Act” in 1846, exempting agricultural imports from tariffs;

In 1853, the colonial market was opened and privileged trading companies were dissolved;

In 1854, the navigation regulations were abolished and the freedom of shipping was implemented;

In 1859, the tariff system was reformed to gradually abolish import tariffs and export taxes.

The trade monopoly over the colonies was abolished in 1860. Britain and France signed a treaty of free trade.

The treaty included shipping, investment, and trade.

Later, there were treaties of free trade in Britain, Italy, Britain, and the Netherlands, and Britain and Germany, providing mutual MFN treatment.

Compared with the monopoly trade policy, the British free trade policy is easier to be accepted by various countries and colonial countries.

In the past, unequal trade has increased the element of equality. The trade policies of various countries have gradually shifted from confrontation to tolerance, and free trade has become a trend.


The contemporary world economy has two salient features:

One is economic globalization and the other is regional economic integration. Regional economic integration has developed rapidly.

The WTO members basically have established free trade relations with other relevant countries.

Both China and ASEAN members are developing countries with limited economic strength, and economic growth is highly dependent on external markets.

Changes in the global economy will have a major impact on their economies.

The China-ASEAN Free Trade Area came into being in response to the negative impact of economic globalization and the rapid development of regional economic integration.

1. Compared with the multilateral trading system, it is easier for countries in the region to reach an agreement on a free trade zone and produce practical results.

At the same time, most of the existing free trade zones are fruitful, and they have also inspired more countries to participate in free trade zones.

2. In terms of regions or neighboring countries, free trade zones are conducive to further exerting the geographical advantages of economic and trade cooperation.

Free trade zones between neighboring countries have many favorable conditions such as convenient personnel exchanges and logistics, similar language and culture, and similar living habits.

Therefore, neighboring countries and regions have more favorable conditions to expand and deepen economic cooperation to achieve mutually beneficial and win-win results.

The effect is more obvious than the benefits brought by participating in the multilateral trading system.

3. While joining the multilateral cooperation mechanism, the conclusion of a free trade zone is conducive to promoting the reform of the economic Structure of the member states.

So that more external forces can be used to promote domestic reforms.

4. The lessons of the repeated regional economic crises in the 1990s have also prompted countries around the world to pay more attention to the institutionalization of regional economic cooperation.

The Southeast Asian economic crisis in 1997 proved that among countries in the same region, crises tend to spread faster and influence each other more strongly.

Therefore, strengthening intra-regional economic and trade cooperation will not only help prevent new crises but also contribute to the stable development of the world economy.

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