2015.6 Introduction of China (Tianjin) Pilot Free Trade Zone.

2015.6

Introduction of China (Tianjin) Pilot Free Trade Zone

CONTENT

Investment Opportunities in TJFTZ

China Pilot Free Trade Zone Overview

China (Tianjin) Pilot Free Trade Zone Introduction

Sep. 2013, China (Shanghai) Pilot Free Trade Zone held the opening ceremony.

Dec. 2014, Tianjin, Fujian and Guangdong FTZs were approved by the central government.

2013

FTZ 1.0 FTZ 2.0

2014

China Pilot Free Trade Zone was established on the intention of further opening-up and reform through which Chinese government would take the great leap in global market competition.

ESTABLISHMENTS OF CHINA PILOT FREE TRADE ZONE

CONTENT




Feature3

Leasing development

Feature2

Feature1

Coordinated development of Beijing-Tianjin-Hebei and the

economic engine in North

China

Financial innovation

beneficial to real economy

CHARACTERRISTICS OF TJFTZ

Tianjin FTZ is the first of its kind in North China. Main distinctive features are:

Dec. 12, 2014, Tianjin, Fujian and Guangdong FTZs were approved by Chinese government Apr. 20, 2015, China unveiled framework plans for Tianjin, Guangdong and Fujian FTZs, and 2015 new version of the Negative List.

Tianjin Airport Area is 43.1 square km; Priority industry includes high-end manufacturing industries such as aviation & aerospace, machinery manufacturing, next-generation information technology, etc.

Tianjin Port Dongjiang Area is 30 square km; Priority industry includes shipping & logistics international trade and leasing.

Binhai CBD Area is 46.8 square km; Priority industry includes modern service industries focusing on financial innovation.

TJFTZ-LOCATION AND POSITIONING

TJFTZ FRAMEWORK PLAN

Major tasks and measures:

Accelerating functional transformation of government

Streamlined administration makes government more efficient and

effective. Setting up of enterprises becomes much easier and less time

spent.Opening up of foreign and outbound investment

The foreign investment outside the Negative List needs only filing

procedures instead of approving requirement. Filling procedure is also

applied on outbound investment.Promoting trading transformation and upgrade

A "single-window" regulation and service system for international trade

will be implemented.

TJFTZ FRAMEWORK PLAN

Deepening innovation and opening up of financial services

Pilot operations will first be conducted on interest rate liberalization,

cross-border RMB use, foreign exchange administration reform, etc.

Coordinating the development of Beijing-Tianjin-Hebei

TJFTZ will play its role as an important junction connecting "China-

Mongolia-Russia Economic Corridor" and major sea routes

Task breakdown: a list of 90 detailed measures of framework

plan have been issued. leading and supporting municipal

commissions have engaged in planning and implementing industry

development.

National support: Related state administrations such as China

Customs, MOF, Ministry of Transport have all released specific

support measures, and more ministries are ready to unveil.

Rapid growth of the number of newly registered enterprises: during the first month after TJFTZ’s opening, in all three areas, 4008

enterprises newly registered, 96.66% year on year growth. The total

registered capital is 83.75 billion RMB , 193.76% year on year

growth.

TJFTZ UPDATE

CONTENT




One seal approval: A comprehensive and integrated administrative review & approval mechanism will be set up.

Mid-event control and subsequent supervision: The focus of administrative management procedures will shift from prior approval to mid-event control and subsequent supervision

List of rights and responsibilities is open to the public and ready to be examined by the people.

I. EFFICIENT ADMINISTRATIVE SERVICES

II. OPENING-UP OF FOREIGN INVESTMENT

Negative List administrative approach: The 2015 version of “Negative List”

is even shorter and only contains 122 items. Some regulations and provisions

concerning foreign investment are adjusted or terminated.

Broadening opening-up fields: In the sectors such as shipping, commerce,

professional, cultural and public services, advanced equipment manufacturing,

information, market access restrictions will be suspended or cancelled on

foreign investors' qualifications, share holding percentage, business scopes,

etc.

Filling procedure on foreign investment: foreign investment outside the

Negative List will receive the same treatment as domestic investors by going

through filling procedures instead of approving requirements.

Foreign equity investment fund: improve the management of foreign capital

settlement and investment fund, encourage foreign equity investment and start-

up investment fund establishment.

Protection mechanism of investor’s rights and interests: qualified foreign

investors can transfer profits freely.

III. CONVENIENT OUTBOUND INVESTMENT PLATFORM

Outbound investment under 300 million US dollars only requires filing rather than approval procedures.

Restriction of foreign exchange on individual outbound investment is further reduced.

Favorable tax and financial policy on outbound investment are provided. For example, income tax from the increase of assets through non-monetary asset investment can be paid by installment within 5 years.

Qualified organizations are able to carry out direct investment, merger and acquisition, liability and other financial investment within a certain amount. Qualified foreign or domestic organizations and individuals can invest stock and futures market in China or overseas (both ways).

IV. UPGRADE OF NEW TRADING TYPES AND FUNCTIONS

V. FAVORABLE ENVIRONMENT OF SHIPPING INDUSTRY

Promoting the opening-up of shipping industry: Chinese investors

are allowed to hold less than 50% of equity of shipping companies,

wholly-foreign-owned international ship management companies are

permitted, the restrictions of foreign shares of international shipping and

agent business are lowered, and foreign ships owned or indirectly owned

by Chinese companies are allowed to pilot the coastal shipping.Building shipping finance center in North China: the development

of international shipping finance center is encouraged, domestic and

foreign shipping insurance and brokerage companies are encouraged to

set up business entities.Supporting the setting up of on-shore delivery center of cruises supply

and tourism marketing center.

VI. INTERNATIONAL TRADE FACILITATION

China Customs issued 25 support measures in Tianjin, Fujian and Guangdong FTZs.

Tianjin Customs released 18 new measures to support the development of Tianjin FTZs, including abbreviated import manifest, optional taxation (either of the finished goods or of the imported parts) for domestic consumption, diversified tax guarantee, AEO list etc,.

Tianjin Inspection and Qualification made public of 12 innovations, such as third-party inspection and appraisal results to be accepted, etc,.

VII. OPENING-UP OF FINANCIAL SERVICES

Tianjin version of FT account

Companies are encouraged to leverage on both domestic and international market resources to facilitate cross-border financing.

TJFTZ will pilot capital account convertibility: Qualified organizations are able to carry out direct investment, merger and acquisition, liability and other financial investment within a certain amount. Qualified foreign or domestic organizations and individuals can invest stock and futures market in China or overseas (both ways).

Innovation of the financial services: offshore account and business, foreign exchange centralized operation by multinational companies, pilot establishment of licensed foreign or joint-venture banks, reinsurance

VIII. DEVELOPMENT OF LEASING INDUSTRY

One distinctive feature of TJFTZ framework plan is to focus on leasing development.

The State Council Approval in 2011 defined Dongjiang as China leasing innovation center.

The framework plan points out that TJFTZ should push forward leasing policy innovation, create favorable leasing development environment and speed up the construction of China leasing center.

Supporting measures for leasing development in framework plan:

Setting up of two platforms: to bring forward “China Tianjin leasing platform” and “Tianjin financial leasing assets registration publicity and circulation platform” Industry access: domestic and foreign investors enjoy the same treatmentBusiness development: to support the setting up of SPV and the development of related factoring and forfeiting. Financing: to support overseas financing and the use of cross-border RMBConvenient supervision: to create innovative supervision of large equipment


DJ is the representative area of leasing innovation in china,

the best comprehensive business platform conducting

domestic, cross-border, bonded and non-bonded leasing. DJ is

well-known for leasing development both at home and abroad.

Until May 2015, registered leasing companies in Dongjiang is

over 1097, headquarter leasing companies 282 and SPV

companies 766. Total registered capital is 74.34 billion RMB. The

total leasing assets are 30.53 billion US dollars, including 493

aircrafts, 11 aircraft engines, 71 international ships and 8

offshore oil drilling platform.


DEVELOPMENT OUTLOOK

Through 3-5 years innovation and reform, TJFTZ will become a world-class free trade zone, with convenient trading and investment procedures, gathering high-end industries, comprehensive financial services, investor friendly regulatory environment, effective and efficient goods supervision, a leading role in the integration of Beijing-Tianjin-Hebei and economic transformation in North China.

Thank youThank you

2015.6 Introduction of China (Tianjin) Pilot Free Trade Zone.

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Transcript of 2015.6 Introduction of China (Tianjin) Pilot Free Trade Zone.