Lin Min

    linmin67@126.com

    CHINA established seven new free trade areas Saturday, aiming to liberalize trade and services not only in coastal areas but also in inland regions.

    This came less than two years after free trade areas were established in Guangdong, Tianjin and Fujian, and four years after the launch of the country’s first free trade area in Shanghai. The latest free trade areas mostly include a number of mid-western inland regions, namely Chongqing, Sichuan, Shaanxi, Henan and Hubei, an indication that the country is throwing its door wide open to the outside world.

    Wang Ning, vice governor of Sichuan, said the move will help deepen reforms in streamlining administration and delegating power, and expand opening up in inland provinces. Hubei Vice Governor Tong Daochi regarded the new FTZs as conducive in facilitating investment and further liberalizing trade in commodities.

    China’s bold initiative to further open up its door is in stark contrast with surging protectionism in America and some European countries as populism and criticism of globalization reshaped the political landscapes in Western countries.

    It is true that the Chinese economy, in general, has benefited from globalization in the past three decades. However, China’s opening up has also brought enormous business opportunities to other countries.

    The world’s giant automakers, from Japanese Toyota, Honda and Nissan to Germany’s Volkswagen to the United States’ General Motors and Ford, have ripped windfalls from China’s auto market after they established joint ventures with Chinese counterparts here.

    The world’s luxury consumer goods makers, like Louis Vuitton, Hermes and Burberry, have become heavily dependent on the Chinese market as a growing number of nouveau riche upgrade their consumption. The rapidly growing army of air travelers in China has helped create jobs in the United States and Europe, as Boeing and Airbus jetliners dominate China’s fleets of airplanes.

    The share price of Apple Inc. would take a dive if iPhones’ China sales disappointed investors. Starbucks satisfies the tastes of China’s middle class and white-collar workers, and cultivates a lifestyle that craves Western products.

    These are just a few of a long list of the Chinese market’s benefits to the outside world. Surely, China knows it can further expand market access to benefit itself and other countries. This is why the country was determined to establish free trade areas and launch the Belt and Road Initiative.

    In fact, many of these free trade areas are also tasked with implementing the Belt and Road Initiative. Among them, Shaanxi said it will focus on trade connections with economies related to the Belt and Road Initiative while Henan will build a modern transportation hub to serve the initiative.

    The establishment of the seven new free trade areas came less than two months ahead of the Belt and Road Forum for International Cooperation to be held in Beijing on May 14 and 15, which is expected to attract a large number of world leaders. The initiative should not be regarded as China’s attempt to export excessive industrial capacities and expertise in infrastructure construction. The initiative is aimed at not only boosting connectivity and liberalizing trade, but also strengthening international cooperation to achieve a win-win situation. While China can help other countries and regions build better infrastructure that is crucial to local economic development and international connectivity, the country’s leadership is fully aware that doing business is a two-way matter. The Chinese market is so huge and is still growing, making it capable of purchasing more imports from other countries.

    The Shanghai Free Trade Area has seen inbound and outbound investment surge since its inception. In 2015, the area saw US$22.9 billion yuan in foreign investment by Chinese firms, 5.5 times that in 2014. By the end of 2016, about 40,000 companies had been registered by Chinese and foreigners in the area, exceeding the total number in the past 20 years, as a result of eased business regulations.

    The Qianhai-Shekou Free Trade Area, part of the Guangdong FTA, saw even more robust entrepreneurship. By the end of last year, a total of 124,560 enterprises had been registered in Qianhai-Shekou with registered capital of 6,854.7 billion yuan. Both figures were the highest among all FTAs in the country. International and local firms in Hong Kong and Macao can now enjoy easy access to financial services, legal services, tourism services and other sectors in Qianhai-Shekou, which aims to pilot reforms in modernizing service industries.

    Shanghai and Qianhai-Shekou FTAs are rolling out more measures to make it easier to do business for both Chinese and foreign firms. Other FTAs are also joining in.

    Hopes are also high on the Belt and Road Forum for International Cooperation in Beijing. As this is the first high-level international forum themed on the initiative, analysts are expecting major measures and big deals to be unveiled during the forum, in addition to discussions among world leaders.

    Hopefully, populist and globalization-skeptic Western leaders are watching.

    (The author is head of the Shenzhen Daily News Desk.)