2.3 Chongqing PFTZ Can Develop Laws in Accordance
with Business Needs
The establishment of PFTZs in large Chinese cities is an important development
which shares deep connection with the BRI. The Shanghai PFTZ was launched in
2013, followed by Guangdong, Tianjin and Fujian PFTZs in 2015, and Sichuan,
Chongqing, Shanxi, Henan and Hubei PFTZs in 2017. Establishment of twelve more
PFTZs were announced in July 2018. The PFTZs exploit the comparative advantages of each region of the country; strengthen the interaction and cooperation
among the eastern, western and central regions of the country; and comprehensively
improve the openness of the Chinese economy. The PFTZs are located in SEZs and
there are overlaps in functions.
31 PFTZs are intended to facilitate investment as they
relax access restrictions for overseas investors, such as qualification requirements,
equity ratio limit and business scope. There are dozens of special measures for
opening up business in six fields, namely, manufacturing, financial service, maritime
transport service, commercial trade service, professional service and technology, and
cultural service.
Apart from providing a facilitative investment setting, PFTZs are entrusted to
facilitate trade through better information exchange. The Vision and Actions document of the BRI mentions trade facilitation under the section “unimpeded trade”,
with particular emphasis on flow of information through establishment of singlewindows, reduction of customs clearance costs and improvement of customs clearance capability. Such emphasis on information connected with the physical movement of goods is in conformity with the notion of trade facilitation advocated by
several international institutions.
32 The flow of information through digitization of
trade processes assists businesses and governmental agencies to manage risks and
reduce transaction costs.
33 The active role played by PFTZs in information exchange
increase supply chain safety and convenience, improve the coordination of crossborder supervision procedures, promote online checking of inspection and
31 Yin (2018). http://www.rksi.org/sites/default/files/document/911/sez-2017-c-yin-chinese-ftzsand-their-contributions-bri.pdf, accessed 17 April 2019.
32 The WTO defines trade facilitation as ‘the simplification and harmonization of international trade
procedures, where trade procedures are the activities, practices and formalities involved in
collecting, presenting, communicating and processing data and other information required for the
movement of goods in international trade’. The United Nations Centre for Trade Facilitation and
Electronic Business (UN/CEFACT) defines trade facilitation as ‘the simplification, standardization
and harmonization of procedures and associated information flows required to move goods from
seller to buyer and to make payments.’ The Organisation for Economic Co-operation and Development (OECD) defines trade facilitation as ‘the simplification and standardization of procedures
and associated information flows required to move goods internationally from seller to buyer and to
pass payments in the other direction’. Single windows are critical for information sharing connected
with trade and may be utilised for building profiles. All the above definitions emphasise the flow of
information connected with the physical movement of goods.
33 For a detailed discussion see Basu Bal and Rajput (2017), pp. 305–326.
Maritime Rules for Rail Carriage: China’s Initiative to. . .
47
with Business Needs
The establishment of PFTZs in large Chinese cities is an important development
which shares deep connection with the BRI. The Shanghai PFTZ was launched in
2013, followed by Guangdong, Tianjin and Fujian PFTZs in 2015, and Sichuan,
Chongqing, Shanxi, Henan and Hubei PFTZs in 2017. Establishment of twelve more
PFTZs were announced in July 2018. The PFTZs exploit the comparative advantages of each region of the country; strengthen the interaction and cooperation
among the eastern, western and central regions of the country; and comprehensively
improve the openness of the Chinese economy. The PFTZs are located in SEZs and
there are overlaps in functions.
31 PFTZs are intended to facilitate investment as they
relax access restrictions for overseas investors, such as qualification requirements,
equity ratio limit and business scope. There are dozens of special measures for
opening up business in six fields, namely, manufacturing, financial service, maritime
transport service, commercial trade service, professional service and technology, and
cultural service.
Apart from providing a facilitative investment setting, PFTZs are entrusted to
facilitate trade through better information exchange. The Vision and Actions document of the BRI mentions trade facilitation under the section “unimpeded trade”,
with particular emphasis on flow of information through establishment of singlewindows, reduction of customs clearance costs and improvement of customs clearance capability. Such emphasis on information connected with the physical movement of goods is in conformity with the notion of trade facilitation advocated by
several international institutions.
32 The flow of information through digitization of
trade processes assists businesses and governmental agencies to manage risks and
reduce transaction costs.
33 The active role played by PFTZs in information exchange
increase supply chain safety and convenience, improve the coordination of crossborder supervision procedures, promote online checking of inspection and
31 Yin (2018). http://www.rksi.org/sites/default/files/document/911/sez-2017-c-yin-chinese-ftzsand-their-contributions-bri.pdf, accessed 17 April 2019.
32 The WTO defines trade facilitation as ‘the simplification and harmonization of international trade
procedures, where trade procedures are the activities, practices and formalities involved in
collecting, presenting, communicating and processing data and other information required for the
movement of goods in international trade’. The United Nations Centre for Trade Facilitation and
Electronic Business (UN/CEFACT) defines trade facilitation as ‘the simplification, standardization
and harmonization of procedures and associated information flows required to move goods from
seller to buyer and to make payments.’ The Organisation for Economic Co-operation and Development (OECD) defines trade facilitation as ‘the simplification and standardization of procedures
and associated information flows required to move goods internationally from seller to buyer and to
pass payments in the other direction’. Single windows are critical for information sharing connected
with trade and may be utilised for building profiles. All the above definitions emphasise the flow of
information connected with the physical movement of goods.
33 For a detailed discussion see Basu Bal and Rajput (2017), pp. 305–326.
Maritime Rules for Rail Carriage: China’s Initiative to. . .
47