Chongqing Joint Proposal: Building Collaborative Opening-Up Demonstration Zone in SW China

Chongqing — How to build the Sichuan-Chongqing pilot free trade zone cooperative opening-up demonstration zone? What are the bottlenecks that need to be solved to explore the regional coordinated opening development? At the National Two Sessions this year, members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) in Chongqing put forward a joint proposal to support the cooperative opening-up demonstration zone from the national level.

China’s first interprovincial pilot FTZ cooperation

In January 2020, General Secretary Xi Jinping stressed at the sixth meeting of the Central Financial and Economic Affairs Commission the necessity to support the pilot free trade zones (FTZs) in Sichuan and Chongqing to construct a collaborative opening-up demonstration zone, strengthen the opening-up in finance, science and technology and expand the opening-up of ports and airports.

In November, the CPC Central Committee and the State Council issued the planning outline for the construction of Chengdu-Chongqing Economic Circle and proposed that the pilot FTZs of Sichuan and Chongqing jointly build a collaborative opening-up demonstration zone and strengthen the promotion of innovation and differentiation in reform.

The collaborative opening-up demonstration zone jointly built by the pilot FTZs of Sichuan and Chongqing marks China’s first interprovincial pilot FTZ cooperation and the major strategic deployment to promote higher-level opening-up. It allows the pilot FTZs of Sichuan and Chongqing to lead the western region's opening-up and gain new international competition advantages through cooperation. It’s also conducive to exploring new opening-up models and systems in inland areas. It explores the path and accumulates experience for regional collaborative opening-up and development.

Facing problems 

Sichuan and Chongqing's party committees and governments attach great importance to constructing the collaborative opening-up demonstration zone. They signed the Strategic Cooperation Agreement on Jointly Building a Highland for the Reform and Opening-up in Inland Areas and jointly issued the Work Plan for Pilot FTZs in Sichuan and Chongqing to Build a Collaborative Opening-up Demonstration Zone Jointly.

However, there are still difficulties and problems, such as the similarities in industry development that need planning and active support at a national level urgently.

Greater reform autonomy

There is an urgent need to strengthen top-level planning and active support from the national level to coordinate the construction of opening-up demonstration zones.

In order to solve the current difficulties and problems, a joint proposal called for guidance on the formulation of construction plans, which will be promulgated and implemented at the national level. The joint proposal also suggests the Office of the State Council Inter-Ministerial Joint Conference should take the lead to strengthen further the guidance on the construction of the Collaborative Opening-up Demonstration Zone.

Meanwhile, strengthening the delegation of authority. In conjunction with each member unit, the Joint Conference Office should give the Collaborative Opening-up Demonstration Zone greater autonomy in reform, explore and implement comprehensive delegation, and promote the trials of various reform matters in the zone.

Policy innovation 

In addition, the joint proposal calls for strengthening policy innovation support and speeding up the construction of an institutional opening-up system. Led by the Joint Conference Office to support the Collaborative Opening-up Demonstration Zone to promote the opening of key areas such as finance, technology, medical care, and digital economy, expand the opening-up of ports and airports, try out foreign exchange management policies that are conducive to the facilitation of cross-border investment and trade, explore more convenient trade supervision systems, and speed up the construction of a high-level institutional opening-up system.

Firstly, strengthen the opening-up in major fields. We should support China-Singapore interconnective pilot projects in finance, such as wealth management and fund interconnective pilot projects. We should also orderly open up internet data center business and content distribution business and carry out the pilot project of cross-border data transmission security management.

Second, expand the opening-up of ports and airports. We should expand aviation's freedoms, including fifth-freedom flights, and improve the land-based trade rule system centered on “railway plus” multimodal transport documents.

Third, further, promote trade facilitation. We need to further lower the barrier to entry in cross-border delivery, support the development of offshore trade, explore the digital trade rule system, improve the credit classification supervision system and explore the reform of the account book management system in special customs supervision zones.

Fourth, firmly promote the opening-up of talent. We should support international vocational qualification certification and recognize international vocational qualifications in fields such as finance, construction, and planning and carry out pilot projects to delegate the right to authorize work permits for foreigners.

Fifth, implement competitive tax policies. We should impose a 9% corporate income tax on high-tech industries that serve as development priorities. The taxable personal income that exceeds a 15% tax rate threshold should be exempt from tax for high-end talent and scarce talent.

Sixth, build a business environment with higher standards. We should carry out risk stress test in advance, strengthen the construction of intellectual property law enforcement system and create an institutional environment to protect innovation.