Shanghai Pilot Free Trade Zone: Shaping of China's Future Foreign Investment Environment
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GLADIE LUI is an Associate Professor
in the Department of Accountancy at
Lingnan University in Hong Kong.
Shanghai Pilot Free
Trade Zone: Shaping of
China's Future Foreign
Investment Environment
By Gladie Lui
Introduction
The official launch of China's pilot Free Trade Zone (FTZ) in Shanghai on
September 29, 2013, marked a significant milestone for the country's economic
reforms and its strategy of opening up its domestic markets for foreign investors.
The FTZ is expected to liberalize trade and the provision of services and help
to develop opportunitics available to offshore corpanics. The main purposes of
the FTZ are to:
a improve the efficiency and effectiveness of government functions;
a open up the economy to new investment opportunities;
a accelerate the development of trading;
m widen the opening up of 18 service industries, and
0 align the existing legal framework with respective to foreign investments.'
Widely perceived as a testing ground for the shaping of foreign investment
landscape, the FTZ covers an area of 28 square kilometers in Shanghai and com-
prises four zones specially administered by customs authorities: the Waigaoqiao
Free Trade Zone, Waigaoqiao Bonded Logistic Park, Yangshan Free Trade Port
Area and Pudong Airport Free Trade Zone.
Tax Incentives
The FTZ offers several tax incentives to promote investment and trading. The
policies and measures implemented in the FTZ will be further developed over the
coming years and are expected to be replicated in other parts of China. Examples
are as follows.
0 China's Ministry of Finance and the State Administration of Taxation jointly
issued the Circular on Corporate Income Tax Policies ConcerningAsset Restructur-
ingActivities Using Non-monetary Assets for Investment Purposes by Enterprises
in the FTZ (Cai Guan Shui [2013] No.91). It specifies the following:
J 2014 G. LUI 31
JULY-AUGUST 2014](ViewImageLocal?handle=hein.journals/intaxjo40&div=34&collection=&method=preview&ext=.png&size=3)
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Shanghai Pilot Free Trade Zone: Shaping of China's Future Foreign Investment Environment
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