(I) Concept
A pilot free trade zone (FTZ) refers to a small specific area established within a country or region that implements preferential taxation and special regulatory policies. Its establishment is relatively simple. It is independently established by a single sovereign state or region in accordance with the relevant regulations of the World Customs Organization (WCO) and does not require negotiation with other countries. It can be said to be “internal”. Its practice is that a sovereign state or region independently “demarcates” an area within its customs territory, implements tax incentives or even tariff reductions, relaxes supplier investment access and customs special supervision policies within the area, which is a unilateral opening behavior.
(II) Preferential coverage
A pilot free trade zone is one or more “small circles” within the customs territory of a country or region that implement special preferential policies, covering only specific areas. When goods, services and investments enter the “small circle” of the pilot free trade zone, they can enjoy special preferential policies, while other areas of the country or region cannot enjoy them.
A pilot free trade zone is open to “everyone” who enters the area.
(III) Preferential policies
Free trade pilot zones are different from free trade zones in that they are open to “everyone” who conducts economic and trade activities in the pilot zones. Generally speaking, anyone can enter a free trade pilot zone to conduct economic and trade activities, and once they enter, they can enjoy all the preferential policies of the pilot zone, which has the characteristics of universality. For example, my country and the United States have not yet signed a free trade agreement, but American companies can also enjoy the preferential policies of my country’s free trade pilot zones.
Related links
China’s free trade pilot zones
Since the China (Shanghai) Pilot Free Trade Zone was officially established on September 29, 2013, my country has successively established 21 free trade pilot zones and the Hainan Free Trade Port across the country, forming a pilot pattern covering the east, west, south, north and center, and further deepening opening up to the outside world in a wider range, wider fields and deeper levels, and the results of promoting reform and development through opening up are constantly emerging.
The 21 free trade pilot zones include Shanghai, Guangdong, Tianjin, Fujian, Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan, Shaanxi, Hainan, Shandong, Jiangsu, Hebei, Yunnan, Guangxi, Heilongjiang, Beijing, Hunan and Anhui.