Shaanxi FTZ: From impressive past to bright future

The approval of the Shaanxi Pilot Free Trade Zone five years ago has helped boost Shaanxi's reform pace and also created more opportunities for Xi'an, the primary platform of the Shaanxi FTZ, to actively serve and integrate into the national development strategy.

In this new stage, Xi'an has actively explored and summarized a series of experience that can serve as an example for the country.

520 innovative cases were drawn from the Xi'an area in the past five years. Among them, 26 were openly affirmed by the State Council or relevant ministries and commissions, and 66 innovations were replicated and promoted throughout the province, initially shaping the Xi'an experience.

Momentum for reform and development is gathering pace

As part of the third batch of pilot free trade zones in China, the Shaanxi FTZ was officially established on April 1, 2017.

Covering an area of 119.95 square kilometers, the Shaanxi FTZ consists of three sections: the Central Area, the Xi'an International Trade & Logistics Area, and the Yangling Demonstration Area.

As the primary platform, the Xi'an area covers the Central Area and the International Trade & Logistics Area, including eight functional areas, with a total area of 114.19 square kilometers, accounting for 95.2 percent of the Shaanxi FTZ.

At the same time, the leading role of the Xi'an area has also been highlighted. The FTZ has become a pacesetter in the plans of deepening reform and opening-up, and promoting economic transformation and upgrading.

According to the Master Plan for the Development of the Shaanxi FTZ, the Xi'an area has taken on 127 key tasks, which have been basically completed with notable results. The 107 pilot tasks under the Plans to Further Deepen Reform and Opening-Up in the Shaanxi FTZ have been implemented 100 percent and 10 have been completed by stages.

The Xi'an area has been making continuous efforts to accelerate the pace of reform, improve top-level design, upgrade the management system, set up 10 task groups and strengthen the work responsibility system for departments.

The reform in the FTZ clearly cultivates growth drivers.

It is encouraging to note that the growth drivers of the region have been significantly strengthened. The Xi'an area has given full play to its pioneering strengths as a FTZ to accelerate the development of competitive industrial clusters and promote high-quality growth. The Xi'an area has well-arranged key industries, represented by electronic information manufacturing, high-end equipment manufacturing, aviation and aerospace, biomedicine, artificial intelligence, 5G, modern logistics, conference and exhibition, among others, attracting a large number of well-known companies and projects to the region.

From the date of its establishment (April 1, 2017) to Feb 28, 2022, 107,931 new market entities settled in the Xi'an area of the Shaanxi FTZ (including Xixian New Area). The number of new market entities was four times the number before the FTZ was established.

In the next step, the Xi'an area will focus on pilot reforms and deeper institutional innovation. It will strive to provide maintenance services in bonded areas, apply for the port to become the first port of import of drugs, and conduct other pilot programs in the FTZ.

At the same time, the Xi'an area is benchmarking the Regional Comprehensive Economic Partnership, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and other international economic and trade rules, conducting research in areas such as trade in services and intellectual property rights, and exploring more pioneering practices through reform and innovation.

Business environment and cross-border trade thrive together

By carrying out bold trials, making breakthroughs, and driving changes, the Xi'an area of the Shaanxi FTZ has summarized a series of experience gained through pilot programs about advancing reforms to streamline administration, delegate power, improve regulation, and upgrade services, improving trade and investment facilitation, and promoting innovation-driven development.

To foster a better business environment is one of the priorities of the Xi'an area. The reform facilitates foreign investment, makes the establishment and operation of enterprises easier and further improves the legal environment.

Xi'an has fully implemented the system for foreign investment management based on pre-establishment national treatment and negative list to treat domestic and foreign businesses as equals and step up the promotion and protection of foreign investment.

Moreover, Xi'an has taken the lead in launching a full-coverage pilot program of separating operating permits from business licenses, and introduced innovative measures such as obtaining business licenses via WeChat and offering 24-hour self-help delivery lockers, setting an example for the reform nationwide.

Xi'an is also doing its best to promote access to government services inter-provincially. It has worked with 13 cities, including Jinan, Wuxi and Kaifeng, and 14 cities (districts) in the Guanzhong plain city cluster, to provide government services on an inter-provincial basis to ensure easier access, effectively meeting the needs of market players and the public to get certain things done when moving across provinces.

Improving the legal environment is also part of the effort. In the past five years, the Xi'an Intellectual Property Tribunal and the arbitration offices and public legal service centers for Shaanxi FTZ were established in the Xi'an area to provide legal safeguards and services for high-quality economic growth.

A better business environment has further facilitated cross-border trade linking markets at home and abroad. Moreover, the Xi'an area is also deepening reform in trade facilitation, working to reduce costs and increase efficiency for ports, and accelerating the integration and improvement of special customs regulation zones.

Xi'an is also continuing to optimize financial services closely related to trade. It is among the first in China to launch a pilot program on USD financing for international factoring. By the end of 2021, it had provided nearly $15 million financing to253 micro, small and medium export enterprises nationwide, saving more than 3 percent of financing costs for businesses.

Xi'an has built the "Silk Road" cross-border e-commerce RMB settlement service platform for Shaanxi, which was selected as one of the "best practice cases" from national FTZs. By now, more than 300 trading enterprises have registered on this platform, with a total cross-border RMB settlement amounting to 27 million.

The digital finance integrated service platform of China-Europe Railway Express Chang'an has been built and put into operation, providing financing to 33 enterprises with a total credit of over 2.1 billion yuan.

Deeper and more substantive progress in Belt and Road cooperation

The FTZ plays an important role in serving the Belt and Road Initiative.

The Xi'an area of the Shaanxi FTZ has redoubled efforts to expand channels, strengthen cooperation and deepen exchanges for deeper and more substantive progress in Belt and Road cooperation.

To support high-quality freight services by China-Europe Railway Express Chang'an, Xi'an has launched a series of innovative measures, such as a single CIM/SMGS transport document throughout the whole process and the direct broad gauge rail, which have effectively improved the model of operation and organization of the China-Europe Railway Express and the transport efficiency of the CRE Chang'an train, and significantly reduced the logistics cost.

The measures include launching test freight trains for transit via Japan and the Republic of Korea, and operating a special train for cross-border e-commerce on a regular basis. There are 16 international arteries that the CRE Chang'an train runs along, and 15 routes connecting other cities with Xi'an, the distribution center, and Europe. The core indicators for the CRE all rank among the top in China, such as the number of freight services, the ratio of loaded containers and the cargo volume.

The airport, on the other hand, has launched 39 all-cargo flight routes and 4 fifth-freedom routes and handled 395,600 tons of cargo and mail throughput in 2021, ranking 9th among China's airports. The synergy between land and air transport has laid a solid foundation for building an international trade corridor with high efficiency, low cost and quality service in the inland region.

Xi'an is also deepening international cooperation in production capacity. The China-Europe Cooperation Industrial Park has attracted nine projects of Fortune Global 500 corporations, such as Bosch and BMW from Germany and Alstom and Danone from France. Enterprises such as Aiju Group and LONGi Green Energy Technology have set up distribution networks, production bases and logistics parks in countries and regions along the Belt and Road.

As international medical cooperation continues to move forward, Tianlong Technology and the ROK have started comprehensive cooperation on molecular diagnostics, and provided testing equipment, and testing and sampling kits to more than 10 countries and regions, including the ROK, Japan, Italy and France.

It is worth noting that the Xi'an area has encouraged TCM services to go global and established TCM treatment centers in Kazakhstan, Russia, Uzbekistan, Indonesia and other countries by establishing international medical service departments, dispatching TCM experts and conducting academic exchanges.

In addition, the Xi'an area of the Shaanxi FTZ also focuses on solid results for coordinated development, promoting synergy with other FTZs and prefectural-level cities within the province and facilitating the development of western provinces and cities.

The past is prologue. Today, in celebration of its fifth anniversary, the Xi'an area of the Shaanxi FTZ is greeting the sunshine that brightens each new day and continues to forge ahead.