China's growing business travel market draws global attention

China's business travel market is expanding rapidly, creating opportunities for travel companies worldwide. AirPlus International, a German travel payment company, said its accumulated turnover in China reached over 1 billion euros ($1.2 billion) this month, making China its third largest overseas market. "China's business travel market, which is the largest in the world, is leading the change in the global travel management industry," said Lucy Wang, managing director of AirPlus International China. The company allows businesses to pay for employee travel expenses using a centralized corporate account, reducing paperwork and creating cost efficiencies. China overtook the United States as the top business travel market in the world in 2015, according the Global Business Travel Association (GBTA), In 2017, Chinese business travel spending is expected to hit $344.6 billion, up 8.4 percent year on year, $51.5 billion more than the estimated US business travel spending, according to the GBTA. Wang said the fast growth was likely to continue as initiatives such as the Belt and Road Initiative were boosting international demand. As Chinese companies expand their global footprint, they are also bringing in new technologies such as mobile payment to boost efficiency. China leads the world in mobile payments for business travel, according to a 2017 AirPlus study. "These trends create challenges and opportunities for travel management firms, which are striving to create a 'fusion management' model that allows all paperwork and payment to be done in a single mobile app," Wang said.

Cooperation memorandum aims to promote Shanghai FTZ development

China Council for the Promotion of International Trade and Shanghai Free Trade Zone Administration signed a cooperation memorandum to promote the FTZ development. The cooperation includes building a service platform of financial and commercial law support, investment and trade; accelerating the construction of Shanghai Intellectual Property Center and Shanghai International Shipping Service Center; building an investment information service platform; and deepening the international trade transformation, and international exchanges. CCPIT will also set up a mediation center in the zone to carry out speedy arbitration of IP ownership disputes. Meanwhile, the zone administration will support CCPIT to set up Shanghai IP Center. CCPIT will also strengthen the Maritime Average Adjustment Center, stipulating international law-abiding maritime transportation contracts and make the average adjustments in Shanghai, in order to improve China’s maritime laws. The FTZ will support CCPIT to set up Investment Environment Monitoring Office in the zone to collect investment information and suggestions from companies in the zone, and present them to the government. CCPIT will support the FTZ to build international trade platform based on the National Pavilion in the zone, and also build an importing platform. CCPIT will take advantage of its domestic and international networking, its recourses of investment and trade, and its talents in financial and commercial law to enhance the development of the zone, said Ma Hao, director of CCPIT Patent and Trademark Law Office.

China’s financial opening-up picks up momentum

According to an official at the Ministry of Finance, China decided to raise the limits on direct and indirect foreign investment to 51 percent in the futures, securities, and funds sectors. Additionally, the cap will be lifted after three years. China’s persistence in jointly facilitating the opening-up in its financial sector, improving the exchange rate forming mechanism for RMB, and loosening regulations on capital circulation laid a solid financial foundation for China’s economic growth, said Zhu Juan, director-general of the International Department at the People’s Bank of China. Increasingly opening up institutions The flourishing Chinese-funded financial institutions have steadily improved their level of international operations. Meanwhile, a growing number of foreign financial institutions further expanded the coverage of their services on a larger scale. Against this positive backdrop, overseas insurance agencies headquartered in 16 nations and regions established 57 institutions in China. “The inbound overseas investment helped uphold a steady and thriving insurance market, and the introduction of foreign competitors further optimized market structure,” said an official at the China Insurance Regulatory Commission. Less regulation on capital circulation China’s capital account liberalization reform has seen many accomplishments. By the end of 2016, 37 out of 40 capital and financial account transactions were completed, covering convertible, basically convertible, and partially convertible accounts, all of which represented 92.5 percent of the total. These reforms advanced the free flow of capital and vitalized the market. The bond market saw ever-expanding overseas issuing bodies and investment subjects; the stock market witnessed the successful launch and operation of Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, a continuing improvement in the systems of Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII). Renminbi has a bigger say Renminbi has made an official entry into the reserve basket of Special Drawing Rights (SDR) of the International Monetary Fund (IMF), introducing its new identity as an international reserve currency. This momentous event led China’s economy into the global financial system, marking a milestone for IMF as well as the global economy, said Markus Rodlauer, the IMF’s mission chief for China.

China opens its door wider – Liaoning Free Trade Zone

The establishment of the Liaoning Free Trade Zone (FTZ) was approved in September 2017 and since then, Dalian’s goal is to create a sufficient and stable business environment. The new FTZ will involve three major cities of Liaoning province, including Dalian, Shenyang and Yingkou. Dalian is already part of the Jinpu New Area, which helped to increase its international and domestic trade levels, including international partnerships with South Korea, Japan and Russia. Jinpu New Area is a strategic region for regional co-operation of firms in Northeast Asia. It was formed in 2014 and became the 10th of China’s Big National Districts as part of the 13th Five-Year Plan. The main aim of the Dalian Jinpu New Area is to develop the opening-up and reform of China, as well as to expand the coastal economic relationships in Liaoning Province and to boost the economic growth in the North-Eastern part of the country. The Jinpu New Area was approved by the State Council, in the hope of making Dalian a pilot zone for innovation. Since the formation of the New Area, large number of functional zones have been set up within the district. Some of these functional zones, include tariff-free zone, bonded port areas, national tourist resorts and export processing zones. The New Area helped Dalian to become a global logistics and international shipping centre. The New Area has both economic and geographical advantages for businesses, operating in Dalian and its surroundings. In 2017, the Chinese government approved the creation of the Liaoning Free Trade Zone. It is made up of three sectors, Dalian, Shenyang and Yingkou. The new Liaoning Free Trade Zone covers state-level high-tech zones, bonded harbour area, the Jinpu New District as well as numerous industrial parks. The regions that will have special customs supervision, will have a focus on the search for institutional innovation that can improve the accessibility of trade, logistics and the processing of bonded services. On the other hand, areas which are not under special customs supervision will focus on exploring potential reforms of the investment system, innovation of the finance sector, the promotion of transformation of the manufacturing industry as well as on the opening-up of the Chinese service industry.  The government made registration convenient for companies, which are located at the Dalian Area of China, Liaoning Free Trade Zone, by setting up a special registration service window for organisations based in the Jinpu New Area and by helping companies to adopt a virtual registration service. Reports of the registration shows that half of the firms used the virtual registration mode to settle down in Jinpu New Area. These organisations include firms in the finance, trade, biological science, equipment manufacturing and port and shipping logistics industries. According to reports, Dalian has copied and promoted around 102 innovative measures of the Shanghai FTZ, as well as of other pilot Free Trade Zones. There are three main goals that the Chinese government tries to achieve by creating the Liaoning Free Trade Zone along with several new laws. The first, is to focus on speeding up the market-orientated institutional mechanism reforms. In order to do this, the Liaoning Free Trade Zone will mostly be based on the Shanghai Pilot Free Trade Zone and adapt new reforms and accomplish further institutional innovations, which are easily adaptable by the cities covered by the Liaoning Free Trade Zone. These changes should mainly focus on the function of the local government and expand the power of decentralization, improve services and to authorize supervision. These changes should help to improve the business environment and the restructuring and upgrading of industries in the involved areas. The second, is to focus equally on the introduction, development and show a new image in team building of talents. Introduction of new talents is important and should be done efficiently and high-level talents should be brought from global and international perspective. The involved are should improve the training and education and overall quality of cadres as well as to work hard, overcome difficulties and try to create a dynamic situation of competing for development. Lastly, the cities in the Liaoning Free Trade Zone should also open-up further to the outside world in order to help to build and achieve a new economic system. They should take part in the international competition and cooperate with other areas, but at the same time fully connect to the national “One Belt One Road” strategy. They should improve their trade systems, so that it meets common rules of international investment and trade, and look for new competitive advantages in foreign trade. Regions in the Liaoning Free Trade Zone can achieve development in its foreign trade system by enhance their technologies, investment attractions and intelligence attractions.

The investing advantages for Guangdong FTZ

Facilitating Trade At Guangzhou’s Nansha Bonded Port Area, Shenzhen’s Qianhai Bay Bonded Port Area and other areas with special customs supervision within the Pilot Free Trade Zone, entry and exit supervisory services will be carried out in line with “first line opening”, “highly efficient control in the second line”. In Zhuhai’s Hengqin Area, hierarchical management will run according to the principles “relaxed restriction in the first line, effective control in the second line, people and goods separated and systematic management” stipulated by the State Council. Goods coming into Guangzhou’s Nansha Bonded Port Area, Shenzhen’s Qianhai Bay Bonded Port Area or Zhuhai’s Hengqin Area (hereafter collectively referred to as the pilot zone) can be first brought in on the back of import manifests with the customs declaration formalities being dealt with in steps. Exported goods can first be declared at customs and then cleared at the port by customs. The storage and logistics of enterprises within the pilot zone are exempt from inspection and quarantine. A comprehensive management service platform for trans-departmental trade, transportation, processing, storage, and other operations will be established, creating a singular window for international trade. Facilitating Investment Overseas investment projects authorization (put on record), the examination and approval of establishment of foreign-invested enterprises and modification (put on record), the registration of establishment of commercial entities, organization code certificate, tax registration certificate (national tax, local tax), social security registration number, seal for the record and other matters can be handled by an “integrated service” mechanism. Gradually business license, organization code certificate, tax registration certificate, and so on, will be brought together into one single certificate using one single number. Financial Innovation Promote the cooperation and innovative development of cross-border renminbi business, and drive renminbi as the major currency for the Pilot Free Trade Zone and overseas cross-border large-amount trade as well as investment valuation and settlement. Explore to carry out cross-border investment and finance innovation business through free trade accounts and other risk controlled manners. Carry out pilot foreign exchange management reform with capital account convertibility, to promote the investment and finance exchange facilitation in the Pilot Free Trade Zone. Measures for Furthering Opening Up The Pilot Free Trade Zone further cancels or relaxes access restrictions for overseas investors, such as qualification requirements, equity ratio limit and business scope. There are 34 measures for opening wider to the whole world in six fields, namely manufacturing, financial service, maritime transport service, commercial trade service, professional service and technology, and cultural service; there are 28 measures for further opening up to Hong Kong and Macao in six fields, namely financial service, maritime transport service, commerce and trade service, professional service, technology and cultural service, and social public service. Tax Administration Tax policies which have been piloted in China (Shanghai) Pilot Free Trade Zone apply in China (Guangdong) Pilot Free Trade Zone in principle. Internal the Pilot Free Trade Zone, the scope of implementation in customs special supervision areas and the scope of application of tax policy remain unchanged. Consummate tax policies impose to overseas equity investment and offshore business development; consummate pilot tax refound policies impose to the port of departure; apply foreign tourists shopping and tax refound policy in eligible areas. Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone of Shenzhen, Hengqin Area of Zhuhai levy 15% corporate income tax on eligible enterprises.

The investing advantages for Fujian FTZ

Convenience for Investment Simple Business registration: Business registration fully applies the service mode of "one declaration form, one window for all procedures, one license and code, one stamp needed for approval, one day end", the duration for business registration is shortened from the original 29 days to 1 day. Fewer procedures for foreign investment record: the pilot zone sets up the "one declaration form system" for foreign enterprises, which combines all the filling information needed by department of business, industry and commerce, quality testing and tax into one form, so that during business registration foreign enterprises could finish foreign investment record at the same time. Shorter period for project approval: for investment project, "one window for all procedures system" is implemented. The enterprise only needs to summit the application at one window of the comprehensive service hall, and then the application materials will be delivered to backstage departments of business reform and development, land, planning, environmental protection to go through joint approval. Within this system, the number of application materials reduce from 250 to about 19, and project approval term shortens from average 1 year to less than 93 working days. Foreign Investment Admission The pilot zone implements a national treatment plus a negative list management model for foreign investment prior to entry, and a record system for those outside the negative list. At present, the list of prohibited foreign investment under simplifying has only 122 rules, the industries available for foreign investment has looser restrictions than other areas in China. Efficient customs clearance Learning from Singapore's experience, Fujian Free Trade Zone builds the "single window" network system in China's forefront of international trade. The import trade declaration data only needs to be entered on a window of network, and then it will be transferred to the port supervision department of customs, inspection and quarantine, maritime affairs, border defense, so as to finish the customs clearance procedures. Finacial Innovation Many innovative practices can be seen on international financial business such as cross-border RMB business, interest rate liberalization, foreign exchange management system and cross-strait security business cooperation, which makes the international financing more convenient and channels broader.