Notice of the State Council on Issuing the Plan for Comprehensively Deepening the Reform and Opening up of China (Shanghai) Pilot Free Trade Zone

· Document Number：No. 23 [2017] of the State Council

· Area of Law： China (Shanghai) Pilot Free Trade Zone

· Level of Authority： Regulatory Documents of the State Council

· Date issued：03-30-2017

· Effective Date：03-30-2017

· Status： Effective

· Issuing Authority： State Council

Notice of the State Council on Issuing the Plan for Comprehensively Deepening the Reform and Opening up of China (Shanghai) Pilot Free Trade Zone
(No. 23 [2017] of the State Council)
The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries and commissions of the State Council; and all institutions directly under the State Council:
The Plan for Comprehensively Deepening the Reform and Opening up of China (Shanghai) Pilot Free Trade Zone is hereby issued to you for your conscientious implementation.
State Council
March 30, 2017
Plan for Comprehensively Deepening the Reform and Opening up of China (Shanghai) Pilot Free Trade Zone
Establishing China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as "SHFTZ") is a strategic measure adopted by the CPC Central Committee and the State Council to comprehensively deepen reform and expand opening up under new conditions. Since the construction of the SHFTZ commenced over three years ago, significant progress has been made, and the expected objectives have been generally accomplished. This Plan is developed for purposes of implementing the decisions and arrangements of the CPC Central Committee and the State Council, with an eye on international free trade zones of highest standards and at top level, comprehensively deepening the reform and opening up of SHFTZ, accelerating the development of an open new economic system, and further making use of the leading and demonstrating role in a new round of reform and opening up.
I. General requirements
(1) Guiding ideology. We shall comprehensively implement the spirit of the 18th National Congress of the Communist Party of China ("CPC") and the Third, Fourth, Fifth and Sixth Plenary Sessions of the 18th CPC Central Committee, carry out in depth the spirit of a series of important speeches and new concepts, thoughts and strategies of managing state affairs of General Secretary Xi Jinping, conscientiously implement the decisions and arrangements of the CPC Central Committee and the State Council, advance the overall layout for "economic, political, cultural, social, and ecological progress" in an overall manner and the Four-Pronged Comprehensive Strategy in a coordinated manner, adhere to the general work principle of making progress while maintaining stability, firmly uphold and practice the new development concept, persist in institutional innovation as core, continue freeing our mind, being bold to make breakthroughs and setting examples, further follow highest international standards and discover shortness and weakness, make audacious experiments and adventures, independently make changes, stick to all-around opening up, promote liberalization and facilitation of trade and investment, strengthen stress testing, and practically and effectively prevent and control risks, so as to promote reforms, development and innovation; further enhance the interaction with the building of Shanghai international financial center and science and technology innovation centers with international influence, constantly magnify the policy integration effect, voluntarily serve the building of the " Belt and Road" and the development of the Yangtze River economic belt, and establish new momentum for economic transformation and development and new international competitive edge; more vigorously transform government functions, accelerate the exploration of the innovation on the administration system of first-level local governments, and comprehensively improve the governance system of the government; and make use of first-doer advantage, strengthen the integration of the reform systems, make efforts to have more achievements in system innovation that can be replicated and promoted, and further highlight the role of the experimental field in comprehensively deepening reforms and expanding opening up.
(2) Building objectives. By 2020, an institutional system connected with common international rules for investment and trade will have been first developed, SHFTZ will have been developed to an international high-standard free trade zone park featuring freedom of investment and trade with open and transparent rules, fair and efficient regulation and convenient business environment, the investment administration system of equal access and orderly competition for various market participants, the trade regulation service system promoting the transformation and upgrading of trade and the facilitation of customs clearance, the financial service system deepening financial opening and innovation and effectively preventing and controlling risks, and the government administration system consistent with the requirement for the modernization of the market economic rules and governance capability will have been improved, and a law-based, internationalized and facilitated business environment and a fair, unified and efficient market environment will have been first created. The interactions between reforms in SHFTZ and those in Shanghai will have been enhanced, and each task of the pilot program of reforms, if with good conditions, will have been comprehensively implemented in Pudong New Area or promoted on a trial basis in Shanghai.
II. Strengthening the integration of the reform systems and building a comprehensive reform pilot zone combining opening and innovation.
The systematicnes, integrity and coordination of institutional innovation shall be enhanced, centering on deepening the reform of the investment administration system, optimizing the trade regulation service system and improving the innovation promotion mechanism, overall arrangements shall be made for the reforms of all parts, the cooperation of all departments shall be strengthened, attention shall be paid to the combination of reform measures, the bottleneck restricting innovation shall be effectively removed, and market dynamism shall be sparked to a greater extent.
(3) Establishing a more open, transparent market access administration mode. The market access negative list and the foreign investment negative list system shall be implemented. On the basis of improving the market access negative list, for various market participants subject to consistent administration, matter-handling links and process shall be further optimized and simplified, and the review standards and periods for business licenses and application for qualifications shall be unified, so as to promote fair competition. The transparency of the foreign investment negative list and the predictability of market access shall be further improved. A fair competition review system shall be carried out, and differentiated treatment in the aspects such as qualification attainment, bidding and protection of rights and interests shall be reviewed and canceled, so as to enable various market participants to lawfully and equally access the industries, fields and business not on the lists.
(4) Comprehensively deepening the reform of the business registration system. The enterprises' independent right of registration shall be protected, and enterprises' right of independent business operation shall be respected. The enterprise name registration system shall be reformed, and an enterprise name is no longer subject to pre-confirmation unless the department responsible for the involved pre-approval matter or confirmation of the enterprise name is not the one responsible for enterprise registration. The conditions for the registration of domiciles (places of business) shall be relaxed so as to effectively release field resources. The mode of registration of business scope stated in business licenses shall be optimized. The pilot program of the reform of whole-process electronic registration and electronic business licenses shall be promoted. A market participant leaving system featuring mutual support of ordinary and summary deregistration systems shall be researched and established. The pilot program of the reform of "one license, multiple addresses" shall be conducted.
(5) Fully realizing "separation of permits and licenses." The reform of "business licenses before government permits" shall be deepened, and exploration shall be further strengthened. Permit approval matters involving market access shall be included in the pilot program of reforms in good time, whatever can be canceled shall be canceled, further optimization and adjustment shall be made according to notification and commitment plus enhancement of market access administration and other modes if approval is required to be retained, and, on the basis of the reform of permit administration mode and improvement of risk prevention measures, the fields subject to notification and commitment shall be further expanded. The connection between permit administration and registration administration of enterprise establishment shall be strengthened, and the application of the unified social credit codes in all permit administration parts shall be realized. "One permit for one enterprise" as for manufacturing permits shall be implemented, and the removal of the inspection of products manufactured with permits shall be explored.
(6) Building international trade "single windows" at advanced international level. The UN international trade "single window" standards shall be learned from, and trade data shall be coordinated, simplified and standardized. The functions of logistics operation included in harbors, airports and areas under special customs supervision shall be integrated with payment and billing functions through banking institutions or non-banking payment institutions so as to facilitate enterprises in making payment and inquiry. The exchange and sharing of the information on logistics and regulation, among others, shall be realized so as to facilitate the inquiry into and administration of the traceability information on the quality safety of import and export goods. The fields covered by international trade "single window" shall be promoted to be expanded to trade in services and gradually to trade in technology, service outsourcing and maintenance services, among others, and the application for export tax rebates (exemption) of trade in services shall be gradually included in "single window" administration when the conditions are mature. State-level "single window" standards and specifications shall be integrated and connected, cross-regional customs clearance in Yangtze River economic belt shall be advanced, and data connection and coordinated regulation shall be strengthened.
(7) Establishing a safe, efficient and convenient new mode of comprehensive customs regulation. The measures such as national customs clearance integration, supervision through inspections of randomly selected entities by randomly selected inspectors and the public release of inspection results, and "Internet plus customs" shall be implemented in depth, the mode of customs business administration shall be further reformed, international trade "single window" shall be connected, and an integrated, intensive, intelligent, smart, efficient and convenient new comprehensive customs regulation mode unifying powers and responsibilities shall be established. Big data, cloud computing, the Internet and the Internet of Things shall be comprehensively applied, and the scope of the pilot program of "independent tax filing, self-help customs clearance, automatic inspection and release and verification of key points" shall be expanded. The reform of "opening up the first tier" and "safely and efficiently controlling the second tier" shall be deepened, comprehensive law enforcement shall be enhanced, coordinated governance shall be advanced, and a supporting administration system adapting to the need of the development of "integration of the zone and neighboring port areas" shall be explored and established. The mode of guaranteed release in disputes over patents of export goods in processing trade shall be innovated. Enterprises from outside areas under special customs supervision shall be supported in conducting high value added, high-technology and zero-pollution maintenance business. Classified supervision of state of goods shall be implemented in depth, the expansion of the pilot program from logistics and storage enterprise to trade, production and processing enterprises shall be researched, and when conditions are met, the pilot program shall be promoted and implemented in other areas under special customs supervision in Shanghai.
(8) Establishing an inspection and quarantine risk classified supervision and comprehensive assessment mechanism. The import goods risk early warning and quick response mechanism shall be improved, the disqualification risks of import goods shall be better monitored, and the consumer goods and other goods recall system shall be implemented. A new qualification assessment mechanism of comprehensive application shall be established, and a national quality and basic inspection and quarantine comprehensive application demonstration park shall be constructed. On the basis of developing and issuing catalogs and lists to which the admission of third-party testing results is not applicable, the admission of third-party testing results of goods and items shall be vigorously advanced and expanded. The expansion of the scope of international recognition of inspection and appraisal results shall be explored.
(9) Developing an internationally competitive innovative industry regulation mode. The access permit for special articles used for experiments in global coordinated research and development of biological medicine shall be optimized, and the content and modes of access permits shall be improved. A customs regulation mode helpful to enhance the international competitiveness of the whole industry chain of integrated circuit shall be improved. A catalog allowing the import of old electromechanical devices for re-manufacturing shall be researched and developed, and, on the premise of controllable risks, the pilot program of the import of numerically-controlled machine tool, engineering equipment and telecommunications equipment, among others, for re-manufacturing shall be conducted. The introduction of a market-oriented insurance mechanism shall be explored, and the regulation efficiency in the fields such as medicine production shall be raised.
(10) Optimizing the market allocation mechanism of innovation factors. The system of the holders of drug marketing licenses shall be improved. The applicants for the registration of medical instrument in SHFTZ shall be allowed to entrust medical instrument manufacturers in Shanghai with the manufacturing of products. The talent determination standards and recommendation modes more conforming to the patterns of the socialist market economy and the growth, development and flow of talents, the permit system of foreigners working in China with unified standards and regulated procedures, and the efficient and convenient talent visa system shall be improved, more high-level foreign talents shall be attracted to participate in innovation and entrepreneurship, provided with more convenience of entry into and exit from China, stay and residence, and entitled to the relevant policies issued by China to encourage innovation and entrepreneurship according to the provisions. Under the laws and regulations, high-level foreign national talents with permanent residence permits for foreigners shall be supported in establishing science and technology enterprises and granted the same treatment as Chinese nationals. The pilot program of "science and technology innovation board" at the Shanghai Equity Exchange shall be deepened, and the financial services for science and technology innovation enterprises shall be improved. Foreign-funded enterprises shall be supported in establishing united innovation platforms and cooperating with homegrown micro, small and medium-sized enterprises in advancing projects industrializing innovation achievements. The innovation on the mode of scientific and technological finance combining the building of financial centers and science and technology innovation centers shall be deepened and advanced.
(11) Improving the intellectual property right protection and use system. The leading role of patents, trademarks, copyrights and other intellectual property rights shall be fully used, the whole chain from the creation, use, protection, administration and services of intellectual property rights shall be opened up, and the quality and profit of intellectual property rights shall be improved. With several advantageous industries as key points, the process of the examination and registration intellectual property rights shall be further simplified and optimized, and the quick intellectual property right protection working mechanism shall be innovated. The rules for the protection of intellectual property rights in the fields of the Internet, e-commerce and big data, among others, shall be researched. The standards for intellectual property right services shall be developed and improved, and the intellectual property right service system shall be perfected. The diversified intellectual property right dispute resolution mechanism shall be improved. Enterprises shall be supported in using intellectual property to make overseas equity investment. Intellectual property right financial services shall be innovated and developed. The intellectual property right ownership system helpful to encourage innovations shall be deepened and improved.
III. Strengthening the connection with common international rules and constructing risk stress test areas of the open economic system
According to the highest international standards, fuller stress test shall be made in order to promote the implementation of a new round of high-level opening up, new development areas of the open economy shall be explored, and systematic experience from the pilot program, meeting the requirement of a more open economy, shall form.
(12) Further relaxing investment access. The SHFTZ foreign investment negative list shall be reduced as much as possible, and the opening up of specialized services such as financial services, telecommunications, the Internet, culture, cultural relics, maintenance and shipping services and the field of advanced manufacturing industry shall be advanced. Except special fields, the special administration requirements for the period of business operation of foreign-funded enterprises shall be canceled. A new mode of administration shall be explored for qualified foreign startup investment enterprises and equity investment enterprises conducting investment projects in China. National security review, anti-monopoly review and other investment review systems shall be improved.
(13) Implementing new rules for trade facilitation. The process of port customs clearance shall be optimized, the reform of the supervision modes at all parts shall be advanced, and the average time of goods clearance in all parts shall be explored and published. Whole-process paperless work covering at all links such as arrival and leaving of vessels, port operation, customs clearance of goods, and other port operations shall be realized as much as possible, and the administration of electronic certificates and proof in the trade field shall be advanced. The pilot program of Asia-Pacific demonstrative electronic port networks shall be deepened. The implementation of the pre-ruling system of place of origin shall be prompted. According to free trade agreements, the implementation of the independent declaration system of place of origin shall be promoted. Cross-departmental sharing of enterprise credit rating shall be advanced, and the inspection rates for enterprises with high credit ratings shall be lowered. The industrial security guarantee mechanism issuing security early warnings and improving international competitiveness shall be deepened and improved.
(14) Innovating on the administration modes of cross-border trade in services. On the premise of controllable risks, the advancement of trade facilitation in high-end service fields such as finance, insurance, culture, tourism, education and health shall be accelerated. The facilitation of temporary import of goods relating to trade in services shall be improved, the scope of the application of the ATA carnet system shall be expanded, and the term of carnet shall be extended. A mode of the regulation of trade in digital products, taking security and efficiency into account, shall be explored. The trade in traditional Chinese medical services shall be vigorously developed, the international market access of the trade in traditional Chinese medical services shall be increased, and the overseas innovative development of traditional Chinese medicine shall be promoted. The innovation on international ship registration system shall be deepened, and international vessel administration enterprises shall be further facilitated in providing overseas seaman employment services. The restrictive measures for cross-border delivery, movement of natural persons and other modes of trade in services in proper fields shall be gradually canceled or relaxed on a level-by-level basis. The statistics system of trade in services shall be explored and improved, and a monitoring system of the trade in services shall be established.
(15) Further deepening the opening up of and innovation on finance. The interactions with the building of Shanghai international financial center shall be strengthened, and the Plan for Further Advancing the Pilot Program of the Opening up of and Innovation on Finance in China (Shanghai) Pilot Free Trade Zone and Accelerating the Building of Shanghai International Financial Center shall be vigorously implemented in an orderly manner. The development of a financial market system orienting to the international arena shall be accelerated, a global Chinese currency service system shall be established, and the pilot program of convertible capital account shall be advanced in an orderly manner. The establishment of a financial regulation coordination mechanism shall be accelerated, and the capability of financial regulation shall be improved, so as to prevent financial risks.
(16) Constructing free trade port areas. Free trade port areas shall be constructed in Yangshan Bonded Port Area, Shanghai Pudong Airport Comprehensive Bonded Zone and other areas under special customs supervision. Top international level shall be connected, and a higher-standard trade regulation system of "opening up the first tier" and "safely and efficiently controlling the second tier" shall be carried out. An intensive administration system based on national authorization shall be implemented, on the premise of effective prevention and control of port risks, depending on information-based regulation means, the trade control measures for goods entering the areas shall be canceled or simplified to the maximum extent, and front declaration formalities shall be simplified as much as possible. A financial, foreign exchange, investment and immigration administration system consistent with common international practice shall be explored and implemented, and a risk prevention and control system shall be established and improved.
IV. Further transforming government functions and building pilot zones to improve the governance capability of the government.
The interactions between the building of SHFTZ and the transformation of the functions of first-level local governments in Pudong New Area shall be enhanced, the reform of simplification of administrative procedures, the delegation of powers, combination of decentralization and control and optimization of services shall be systematically advanced, and reforms and innovations shall be made in the aspects such as the reform of administrative bodies, innovation on administration systems, optimization of operation mechanisms, transformation of service modes and other aspects, and the governance capability of the government in an open environment shall be fully improved.
(17) Improving the administration system with simplification of administrative procedures, the delegation of powers as priority. The advancement of simplification of administrative procedures, and the delegation of powers shall be accelerated, and the reform of the administrative approval system shall be deepened. With sorting out the relations among the government, market and society as priority, approval matters shall be further canceled and simplified, and powers shall be delegated to the market to the maximum extent. The transformation of the administration mode in the fields of market access and practicing qualifications shall be prompted. The reform of the big department system shall be deepened, and a cross-departmental coordination mechanism shall be developed according to the principle of simplification and efficiency in the five functional modules: market regulation, economic development, social administration and public service, reform and legislative affairs, and environmental protection and urban construction.
(18) Deepening and innovating on interim and ex-post supervision systems and mechanisms. According to the requirement for exploring and establishing a new governmental economic administration system, the reform of classified comprehensive law enforcement shall be deepened, and centering on the proper separation of approval, regulation and law enforcement, the reform of comprehensive law enforcement in the fields of market regulation and urban administration shall be improved. The reform of comprehensive administrative law enforcement in transport shall be advanced, and coordination of law enforcement shall be strengthened. The scope of the collection of abnormal directories and information shall be expanded from market regulators to other administrative departments, and the cross-departmental permit handling mechanism of "double notification, feedback and following" and the regulation coordination mechanism of "double random, assessment and publication" shall be improved. The market participant first responsibility mechanism shall be implemented, and a market participant social responsibility report system and responsibility traceability system shall be established in the fields of work safety, product quality and environmental protection, among others. Social resources shall be encouraged to participate in market regulation, and institutional arrangements for third-party specialized institutions of accounting, audit, law and inspection and testing, among others, to participate in market regulation shall be made and improved.
(19) Optimizing the government service system featuring interconnection and sharing of information. The development of an "Internet plus government service" system oriented on the demand of enterprises and supported by the analysis of big data shall be accelerated. An information sharing mechanism featuring coordination between the Central Government and the local governments and connection between strips and blocks shall be established, and the border rules for the interconnection of information among departments shall be specified. Based on data sharing, business process shall be reshaped, and "single window" and "whole networks" for handling market access, "whole district" for handling individual affairs, and "whole personnel cooperation" in government services shall be realized. A public credit information and financial credit information complementary mechanism shall be researched and established. Market participant credit rating standards and systems shall be explored and developed, and a specialized credit information service market shall be fostered and developed.
V. Innovating on modes of cooperation and development and becoming a bridgehead serving the building of the State's " Belt and Road" and promoting market participants in heading overseas.
The organic combination of "introduction" and "heading overseas" shall be adhered to, the mode of economic, trade and investment cooperation, research and development of essential industrial technology and internationalized financing shall be innovated, a new open cooperation platform of the " Belt and Road" shall be researched and established, pivots with the functions allocating resources and market factors serving the " Belt and Road" shall be built, and SHFTZ shall be allowed to play a radiating and driving role in serving the "Belt and Road" strategy.
(20) Promoting economic and trade cooperation with high-standard facilitation measure. Asia-Pacific demonstrative electronic port networks shall be connected, and information exchange and service sharing between Shanghai "single window" and ports along the " Belt and Road" shall be vigorously advanced. A new mode of interconnection and regulation cooperation shall be first explored, and bilateral and multilateral cooperation and exchange shall be made in the aspects of certification, accreditation and standard measurement, among others. The building of international hub airports shall be accelerated. The cooperation and connection between Shanghai ports and the ports along the 21st Century Maritime Silk Road shall be promoted, and a central hub on Asia-Pacific supply chain connecting key ports at home and abroad shall be developed. Comprehensive outbound investment promotion institutions and overseas investment public information service platforms shall be established, and business operation shall be made in the aspects of inquiry in law, lawyers' services, commercial dispute mediation and arbitration, financial accounting and auditing services, among others. The " Belt and Road" property rights exchange centers and technology transfer platforms shall be established, and cooperation in the " Belt and Road" industries and technology shall be prompted. International cooperation in production capacity and construction capacity in the fields of energy, ports, telecommunications, high-end equipment and manufacturing, among others, shall be advanced.
(21) Enhancing the " Belt and Road" financial service functions. The in-depth cooperation and interconnection between Shanghai international financial center and the financial markets in countries and regions along the "Belt and Road" shall be promoted. Strategic cooperation with offshore Chinese currency markets shall be enhanced, overseas institutions and enterprises shall be advanced steadily and properly to issue bonds in Chinese currency and assets securitization products, quality overseas enterprises shall be supported in using Shanghai's capital markets to grow, the central banks, sovereign wealth funds and investors from countries along the "Belt and Road" shall be attracted to invest in domestic assets in Chinese currency and provide financing services for major projects of the " Belt and Road." Overseas investment insurance, export credit insurance, cargo transport insurance, project construction insurance and other business shall be vigorously developed, and comprehensive insurance services shall be provided for enterprises' overseas investment, export of products and technology and undertaking major projects of the "Belt and Road." The development of the New Development Bank shall be supported.
(22) Exploring internationally competitive offshore taxation arrangements. Adapting to the demand of enterprises participating in international competition and services for the construction of the "Belt and Road," on the premise of not resulting in the erosion of tax bases and the transfer of profit, tax policy arrangements for the expansion of the scope of the pilot program of innovation on trade in services shall be researched and explored, on the basis of true trade and service background, taking into account the pilot program of innovation on trade in services.
VI. Serving the big picture of national reform and opening up and making more achievements in institutional innovation that may be duplicated and promoted
The basic orientation of SHFTZ shall be closely grasped, the launch of pilot programs shall be adhered to, the initiative and creativity of reform and innovation in all aspects shall be fully used, and more achievements in institutional innovation shall be obtained for comprehensively deepening reform and expanding opening up.
(23) Accelerating the forming of systematic reform experience and mode. With innovation on concepts, systems and mechanisms and policies, the strengthening of risk prevention and control and the experience in the pilot program of reforms in other aspects as priorities, the summary of the experience in pilot programs and system integration shall be strengthened. The forming of experience in reforms in fields such as market access, trade facilitation, and innovation on and development of systems and mechanisms which can be duplicated and promoted across the country shall be accelerated. The experience in stress test matters such as further expansion of opening up and connection with high-standard international economic and trade rules shall be vigorously explored, and policies shall be effectively reserved for the state to advance the building of a new pattern of bilateral and multilateral economic and trade cooperation. As for reform matters such as innovation on the mode of government administration, reform experience in reform concepts, organization advancement and other aspects which can be learned from by other regions shall be obtained.
VII. Effectively ensuring the implementation of the work
Under the overall arrangements and coordination of the inter-ministerial joint meeting for pilot free trade zones of the State Council, the local governments and departments shall be fully motivated and ensure the implementation of reform measures. According to the principle of overall arrangements, implementation by steps, first breakthroughs and gradual improvement, all relevant departments shall vigorously give their support, develop detailed rules or measures for the implementation in a timely manner, and strengthen guidance and services; and, as for reform matters involving the adjustment of laws and regulations, intensify legal guarantee in a timely manner, effectively make connections with the revision, repeal and interpretation of the relevant laws, jointly advance the innovation on the relevant systems and mechanisms, and pay attention to enhancing regulation and preventing and controlling risks. Shanghai shall grasp the basic orientation, intensify mission and obligations, innovate on thinking, seek patterns, solve problems, accumulate experience, improve the working mechanism, systematically advance the implementation of the tasks of the pilot program of reform, and continue acting as a leader of national reform and opening up and pioneer of innovative development. All significant matters shall be reported to the State Council in a timely manner.