Beijing will further open its market to both domestic and overseas businesses and provide better policies to investors after the State Council said it would establish one of the three new pilot free trade zones in the capital.
Among the three new FTZs, which will be in Beijing and in Hunan and Anhui provinces, the one in the capital has attracted wide attention as it will focus more on the digital economy and service industry. The FTZ will look to leverage its advantages like science and technology development and a highly internationalized businesses climate to attract more investors, experts said.
“Beijing’s digital economy has seen steady development with its added value accounting for more than half of the city’s GDP, the best among all cities in China,” said Liu Yang, a research director at the Capital Institute of Science and Technology Development Strategy.
“Beijing also has the capacity to build a digital currency zone and a digital finance system,” said Liu.
According to the plans for the Beijing FTZ, authorities will help the People’s Bank of China, the country’s central bank, to establish a legal digital currency zone and digital finance system in the zone. The central bank will also promote the use of a block chain standardized system for the trade and finance sector.
“The steps will improve the city’s financial services sector and cut costs greatly,” Liu said, adding that it would also help form a reliable credit system and reduce finance risks.
Yang Xiuling, head of the Beijing Municipal Bureau of Economy and Information Technology, said a digital asset exchange that provides domestic and international services would be set up in the FTZ.
“Competition is intensifying among different countries in the digital trading sector. We believe, Beijing, as the national capital and a major science and technology center, should leave its mark in the sector,” she said.
The FTZ will also focus on offering better policies in the services sector, especially in financial services.
In recent years, Beijing has rolled out a series of measures to further open up its financial services market and is attracting a growing number of foreign investors. Since 2018, more than 30 well-known foreign financial institutions, including Visa, MasterCard and Swift, have opened branches in the city. The FTZ plan will give foreign banks and investors more convenience to set up business in Beijing.
Yan Ligang, head of the city’s commerce bureau, said international accounting firms and arbitrage institutions would be allowed to set up branches in the zone.
Beijing Vice-Mayor Yang Jinbai said Beijing will offer the same treatment to both foreign and domestic investors and maintain a negative list that bars economic activities in some sectors, improve trade access and relax restrictions in the services sector in the Beijing-Tianjin-Hebei region when conditions permit.
According to the plan, the pilot FTZ in Beijing will be spread over an area of 119.68 square kilometers, including three areas for science and technology innovation, international business services and high-end industries.
The three areas will be located in the Zhongguancun area, the Beijing Central Business District and Beijing Economic and the Technological Development Area.