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Free Trade Zones in China boost business vitality

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China is planning to further reform its economy by opening up more free trade zones. country already has 11 pilot free trade zones, which have been set up in just about three years. The first was in Shanghai. These FTZs are designed as platforms for economic reforms. An FTZ makes it possible to lower the threshold for the registration of new companies, cut restrictions on capital flows, and provide more market access to foreign investment. One feature of an FTZ is the negative list. Foreign investment in areas not on the negative list only have to make a record of their activities, while previously, they had to undergo a case-by-case approval system. Another advantage is faster customs clearance times. In three years, the Shanghai FTZ has shaved clearance times for imports by an average 78.5 percent, and exports by 31.7 percent.

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