Eric's Insight: Yunnan pilot FTZ serves as institutional innovator over the years
China (Yunnan) Pilot Free Trade Zone (FTZ) was inaugurated on August 30, 2019. In the past five years, the Yunnan pilot FTZ has been an institutional innovator for provincial economic development, reform and opening-up, sharing development opportunities with other parties and achieving win-win results.
A view of Kunming area in the China (Yunnan) Pilot Free Trade Zone
Since its inception, the Yunnan pilot FTZ has implemented all the 159 reform tasks as required by national and provincial authorities, resulting in 393 institutional innovations. Through the new trade mode of "internet plus cross-border market" and the new cross-border cooperation mode in production capacity, the Yunnan pilot FTZ has been leading the innovation of open development in the border areas.
Institutional innovation for more open economic systems. The Yunnan pilot FTZ has joined forces with other parties in rolling out targeted measures to facilitate cross-border trade and serve Yunnan's high-standard opening up through optimizing processes, reducing costs, saving time and improving efficiency.
International tourists pass through the Mohan gate near the China-Laos border.
Focusing on the Regional Comprehensive Economic Partnership (RCEP) rules over tariff concessions, investment, place of origin, service trade, cross-border e-commerce and intellectual property protection, the Kunming area of Yunnan pilot FTZ has increased innovation in cross-border systems and improved investment liberalization. According to the "2023-2024 Systemic Innovation Index of Chinese Pilot Free Trade Zones" released by Sun Yat-sen University in July, the Kunming area is a top five Chinese pilot FTZ in trade facilitation.
Since the Mohan town near the China-Laos border was creatively put under the jurisdiction of Kunming city in 2022, the Kunming area of Yunnan pilot FTZ and the Mohan-Boten economic cooperation zone have been integrated deeply in resources, bringing about common development in China and Laos. "The Yunnan pilot FTZ strives to build industrial clusters and aid innovative entrepreneurs. This will give rise to trade prosperity and job opportunities, creating broader entrepreneurial space for young people in Laos,” said Soulideth Lavanphone, a Laotian trader.
The Dehong area of Yunnan pilot FTZ stages a business promotion during the 2023 China-South Asia Expo.
Institutional innovation for better business environment. Through separating business permits from licenses, the Yunnan pilot FTZ has improved the business environment and transformed the government functions, while modernizing governance capacity, improving service efficiency and stimulating market vitality.
In the Dehong area of Yunnan pilot FTZ, civil servants meet corporate representatives on weekly basis in a bid to handle business items with one-stop windows and create an upgraded version of government services. Also, implementation plans were introduced to optimize the business environment under the rule of law, and the "integrated administrative law enforcement supervision system" was put into effect to create a free trade business environment ruled by law.
A hard-working scene in the Dehong area of Yunnan pilot FTZ
Institutional innovation for easier financial access. Financial innovation is key for a pilot FTZ to carry out institutional reforms and regional integration. In the past five years, the Yunnan pilot FTZ has continued to expand the opening up of the financial industry and promote the free flow of cross-border funds.
The Honghe area of Yunnan pilot FTZ rolled out trade financing packages for business persons in the China-Vietnam border areas, providing them with inclusive loans and promoting cross-border trade among residents. By April 2024, financial institutions in Honghe area had opened 7,743 bank accounts for border residents and settled 720,900 transactions in the primary cross-border market, with the total trade volume reaching 5.62 billion yuan.
Morning glow over the China-Vietnam border area near the Honghe area of Yunnan pilot FTZ
Chea Munyrith, president of the Cambodian Chinese Evolution Researcher Association, said that since its establishment five years ago, the China (Yunnan) Pilot Free Trade Zone has contributed to the goals under the Belt and Road Initiative. Statistics show that the total trade volume between Cambodia and China reached 8.723 billion US dollars in the first seven months of this year. In the future, Cambodia needs to make further use of platforms such as the Yunnan pilot FTZ, so as to allow more products to access the international market.
Writing by Wang Shixue (with inputs from People’s Daily); Photos by Yunnan Daily; Proofreading by Zu Hongbing and Wang Huan