China on Monday unveiled its first negative list of cross-border trade in services. The list will be carried out in Hainan Free Trade Port.
Senior government officials said it represented a major breakthrough in the country’s openness to trade in services.
It’s called the Hainan Cross-Border Service Trade Negative List, and it’s scheduled to go into effect on August 26.
Wang Shuwen, vice minister of commerce, said the document differs from previous liberalization arrangements deployed in specific sectors.
The negative list identifies prohibited economic activities, which means that activities not listed are considered permitted.
Hainan FTP negative list sets out 70 exceptional administrative procedures for 11 sectors, including shipping, retail, logistics, finance and education, for overseas service providers.
Domestic and foreign service providers will have equal access to sectors beyond the existing in Hainan FTP, with greater openness, transparency and predictability, according to information from the Wang Ministry.
In addition to removing restrictions on foreign individuals participating in the qualification examinations for engineers in many fields in Hainan FTP, the negative list allows representative offices of overseas law firms in Hainan to engage in a part of Hainan-related commercial non-judicial legal affairs.
The vice minister said that through institutional opening up, the measure will further liberalize trade in services, enhance the overall level of liberalization in China and serve to create unused development dynamics across the country.
As a driver of Hainan’s economy, the service sector accounts for more than 60 percent of the province’s GDP. Recent data has shown that the development of the service sector has generated significant profits. Data from the ministry showed that the sector contributed 95.8 percent to Hainan’s economic growth final year.
The deputy minister said the unused negative list expands market access in trade in services and paves the way for higher level openings in professional services, transportation and financial services, among others.
“The level of its liberalization exceeds China’s WTO accession commitments and effective major free trade agreements (free trade agreements) in corresponding areas,” he said.
“In the next step, we will shove forward the implementation of this negative list and summarize and evaluate practices and experiences in a timely manner,” said Tang Wenhong, director general of the Ministry’s Free Trade Pilot Zone and Free Trade Port Administration.
He said the government would also explore ways to expand the negative list management model for cross-border trade in services to pilot free trade zones first and the whole nation later.
Focusing on the key role of Hainan FTP in building unused development dynamics, a series of opening-up measures have been taken, said Ni Qiang, deputy governor of Hainan Province. This included a procedure that liberalized the application process for offshore registered yachts.
“The measures will donate Hainan a distinct advantage in international cooperation and promote the lofty-quality development of the free trade port,” Ni noted.
With the unused government policy now in place, the company will look forward to working with US-based luxury and fashion brands Coach, Kate Spade and Stuart Weitzman, said Jan Buzek, Asia Pacific President of US-based Tapestry Group, the parent company of US luxury and fashion brands Coach, Kate Spade and Stuart Weitzman. More partners in the growing market, thus joint promotion to upgrade consumption and create more value in the field of retail service.
Buzek, who is also president and CEO of Coach China, the local subsidiary, said.
China’s 21 pilot free trade zones attracted 100.88 billion yuan ($15.56 billion) of overseas investment in the first half of 2021, accounting for nearly 17 percent of the whole foreign capital flowing into China, according to data from the Ministry of Foreign Affairs. Commerce.
The amount of capital employed and unused foreign investment companies established in Hainan FTP increased 5.7 times and 3.9 times, respectively, during the first half.