Authoritative Release: Best Practices of Institutional Innovation on the Third Founding Anniversary of China (Guangdong) Pilot Free Trade Zone
04 20, 2018 Source: Nanfang Daily
On April 20, the Guangdong Free Trade Zone issued 30 “Best Practices of Institutional Innovation on the Third Founding Anniversary of China (Guangdong) Pilot Free Trade Zone”. After comprehensively considering recommendations from enterprises, experts and scholars in the China (Guangdong) Pilot Free Trade Zone, 10 best practices related to investment facilitation, trade facilitation, and financial openness and innovation respectively were released.
I. Ten Best Practices of Investment Facilitation
i. The New Government Service Mode of Enterprise Exclusive Web Page
Practice: Each company is provided with a customized version of exclusive web page, with the only entrance to the e-government service for enterprises. Relying on comprehensive information service platform for government service, the government provides enterprises with convenient, personalized, integrated government service.
Achievements: By March 31, 2018, nearly 300,000 enterprises in the China (Guangdong) Pilot Free Trade Zone have opened enterprise exclusive web pages and promoted their use in 13 cities across the province.
ii. "Commercial Subject Electronic Certificate Bank Card" First Issued in China
Practice: This kind of card is based on business license information and integrates other basic registration information such as registration, licensing, record filing, and qualification certification. This card is entitled “Multiple-function Card” since it provides government service to society.
Achievements: At present, nearly 10 banks, including Bank of China, China Construction Bank, Agricultural Bank of China, and China Guangfa Bank, have joined the relevant system, at least saving one third of the service time for enterprise registration.
iii. Implementing “Unified Official Seal Approval”
Practice: The first batch of 143 sub-items of 76 major items from 7 departments was transferred to the Nansha Administrative Approval Bureau for unified handling and approval. “Unified Official Seal Approval” has been implemented in the fields of enterprise registration, investment project filing (approval) and enterprise investment and construction project approval for the first time.
Achievements: Since the implementation of “Unified Official Seal Approval”, a total of 32015 cases have been accepted and handled, with a completion rate of 95.7%. Time spent on the establishment of enterprises and the approval of investment projects has been reduced by 2/3.
iv. New Market Supervision Model During and After Events Through the "Three Lists and One Platforms"
Practice: Relying on the big data regulatory platform, new management modes, including the reminder list of illegal business operations, the impunity list of minor legal violations, and the joint disciplinary list of discredit business entities.
Achievements: Since the implementation of the three lists, over 50,000 times of legal inquiry service have been provided for enterprises, achieving “Zero Fines” upon the enterprises.
v. New Approval Mode of the Whole Process for Social Investment Projects
Practice: The construction permits are issued in stages to reduce construction costs, so as to build a one-stop inter-department approval platform and thus greatly reduce the time limit for obtaining the construction permits.
Achievements: The number of government departments involved in enterprises’ application for construction licenses has been reduced from 20 to 1; the number of construction permits has been reduced from 35 to 16, with a reduction ratio of over 50%; the approval time by governments has been shortened from 30 days to 13 days, which has been shortened by over 50%; the investor could carry out the underground foundation construction within 110 days, with over 30% time shortened; and the approval expense has been reduced by over 20%.
vi. Exploration on the Reform of Commercial Registration Confirmation System in General Enterprises
Practice: Executing registration in general enterprises that do not involve negative lists of access and pre-approval of commercial registration, reforming the commercial registration permit system, and carrying out registration confirmation.
Achievements: Realizing automatically review and confirmation of the enterprises’ commercial entity qualifications and “Approval Without Intervention of Personnel”. The applicants would only spend 10 minutes on business license application.
vii. China’s First Cross-Border Tax Payment
Practice: China's first "Cross-border E-check Tax Payment", V-Tax remote visual self-help tax system, etc., have provided Hong Kong and Macao taxpayers with navigation and intelligent process guidance and remote tax service by staff, achieving cross-border transactions related to local taxes and fees.
Achievements: “Zero Movement” is included in tax-related business handling by Hong Kong, Macao and off-site taxpayers, realizing “Same Quality and Effect in the Same City” of the cross-border taxation, as well as the access to tax service ticket query and printing anytime, anywhere.
viii. New Mode of Power Supply System Reform
Practices: With the newly issued “Regulations on Electricity Supply and Utilization”, a low-voltage power supply model has been introduced, and electricity supply mechanism innovations such as electricity pre-purchase are fully put into practice, and the first national incremental distribution grids power supply company of mixed-ownership has been established.
Achievements: The long-distance power supply reliability rate is as high as 99.9995%, and the annual average power outage of customers is less than 2.5 minutes. The investment spent on current-carrying project for single-user one-time can be saved by 80%, time spent on power installation has been reduced from 59 days to 10 days.
viiii. Creating the Application Service Platform of "Wechat Police Identity Authentication"
Practice: On December 25, 2017, based on the "Wechat Police Identity Authentication" platform, China's first "ID Card Network Certificate" was issued on WeChat to provide national identity authentication services of statutory document-level on mobile phones.
Achievements: Accumulated registered users have exceeded 3.6 million and over 18 million authentication services of various types have been offered. For example, mobile authentication of retirees' qualification for obtaining pension has benefited 700,000 users.
x. Shekou Adopts the Comprehensive Development Model of "Port Ahead - Central Area - Back City"
Practice: Qianhai-Shekou Area has pioneered in creating the integrated trinity development model of ports, industrial parks and cities, and mobilizes social resources through cooperation mechanisms, realizing the joint development among ports, industrial parks, and cities and achieving synergism among governments, enterprises and various resources.
Achievements: The model is not only introduced to Zhangzhou, Chongqing, Tianjin, Qingdao and other places, but also introduced to Belarus, Djibouti, Sri Lanka and other countries around the world.
II. Top 10 Best Practices of Trade Facilitation
i. Global quality traceability system
Practice: Domestic and foreign companies import commodity quality information into the “Intelligent Port Inspection” platform. After the arrival of commodity at the port, the inspection and quarantine agency implements accurate supervision and rapid inspection and release through the traceability system; and after the commodity enters the circulation, consumers, enterprises and regulatory agencies can quickly obtain the whole chain traceability information and special status alerts via traceability code source or web page inquiry.
Achievements: The system has covered all trade methods and all commodity categories. Over 180 well-known companies such as JD, Vipshop, Mead Johnson, Four Seas Group have joined the factory-level traceability system. A total of 53.31 million traceability codes have been issued, the value of traceable goods has reached US$ 53.463 billion, the number of inquirers has reached 54.234 billion and the traceability system has been included in the second batch of replication and promotion projects for APEC member states.
ii. Facilitation of Customs Clearance of Goods, Foods, and Other Items in Guangdong, Hong Kong, and Macao Under the CEPA framework
Practice: Innovative cooperation supervision model of Guangdong, Hong Kong and Macao customs inspection is introduced. In respect of building materials supplied on Macau’s market, one-off declaration combined with exportation in batches is adopted; as for small commodities in Zhuhai and Macao, simplified categorization and summarized declaration is used; and for food imported from Hong Kong and Macao, prior inspection on food is implemented. For those imported products including electric bicycles and disposable sanitary products, the third-party credit approval is adopted. And the innovative systems, in which the inspection results of passenger cars from Zhuhai and Macao land port can be used for mutual reference and recognition, has been adopted.
Achievements: The time for one-batch cargo clearance in Hengqin Area has been shortened from 20 minutes to 3-5 minutes since the implementation of “One-off Declaration and Exportation in Batches”; clearance time for passage cars on Zhuhai and Macao land port is saved by 40%; time spent on the submittal for inspection of spot checked imported food in Hengqin and Nansha Areas, has been shortened from the original 7-11 working days to the current 2-3 hours; and imported products such as electric bicycles and disposable sanitary products, will be subject to the third-party inspection and certification results in Hengqin and Qianhai-Shekou Areas.
iii. Smart Approval of Certificate of Origin
Practice: By using big data technology and integrating intelligent examination data bases built based on visa data and order examination rules based on risk assessment, establish a certificate issuance system for certificate of origin, and implement automatic system audit and electronic signatures on certificates that are judged to be risk-free.
Achievements: The accuracy rate of the system certificate audit by “Smart Certification” can reach over 99%; in 2017, 9041 copies of 7 certificates have been completed by using the smart approval and verification system in Qianhai-Shekou Area, with a reduced or exempted tariffs of approximately US$ 13.39 million and related certificate verification efficiency increased by 80%; and the Nansha Area has issued a total of 4,819 preferential certificates of origin, with a tariff reduction of nearly US$ 10 million.
iv. "Intelligent Port Inspection" Integration Reform
Practices: The first new mode of “Intelligent Port Inspection” in China has been released. Companies can apply for inspection in a paperless way for free anytime and anywhere on the Internet.
Achievements: The total inspection time for the exported goods purchased from market has been shortened from 2 to 3 days to merely 16 minutes, the average annual growth rate of the port business volume has exceeded 30%; the average inspection time for cross-border e-commerce is 105 seconds; the import volume of “CEPA Food” in 2017 has seen a year-on-year growth of 100%; and the parallel port inspection speed of imported motor vehicle is lifted up by three times.
v. "Online Customs" Model Room of Cargo Customs Clearance
Practice: Relocate the customs clearance business to the Internet. The “Internet-based Custom Clearance” platform, “E-express” and “Guangdong Custom Online” mobile terminals have been released, covering 227 kinds of service in five fields.
Achievements: In 2017, customs clearance time for import and export goods in the Guangzhou Customs District was reduced by 49% and 62% respectively, compared with the 2016 national import and export customs clearance time. 1.36 million customs clearances were completed by "Internet-based Self-help Customs Clearance" model, with the highest reduction in the cost of customs clearance of imported goods of 60%, and the maximum cost reduction of export goods clearance of 80%.
vi. Guangdong and Hong Kong goods entering and leaving the fast track
Practice: Innovatively implement the "Guangdong-Hong Kong cross-border warehouse" supervision system and the "Shenzhen-Hong Kong land-air linked transport" mode to create a rapid channel for the entry and exit of goods from Hong Kong and Hong Kong.
Achievements: logistics transit through the “Guangdong-Hong Kong cross-border warehouses” takes less time than traditional operations by 3-7 working days, saving up to 70% of the costs for companies occupied in processing trade. The "Shenzhen-Hong Kong land-air linked transport" mode can save one-third of logistics costs for companies and 1/4 logistics time.
vii.Integration solution of Cross-border e-commerce B2B transaction settlement
Practice: Qianhai-Shekou and Nansha Areas have created a new cross-border e-commerce B2B transaction settlement product, in order to solve the problems of small quantity, multiple brands, and high frequency of orders occurring in cross-border e-commerce import and export.
Achievements: The value of cross-border e-commerce exports in the Qianhai Bay Bonded Port Area in 2016 and 2017 were 177 million and 374 million U.S. dollars, representing year-on-year growth of 338% and 112% respectively.
viii.Guangdong, Hong Kong and Macao yacht "free voyage"
Practice: Take the lead in implementing the new convenient customs clearance mode of “fixed berth location and joint inspection nearby”, simplifying the customs formalities for entry and exit of Hong Kong and Macau yachts.
Achievements: On July 24, 2017, the maiden free voyage of yacht across Hong Kong and Macau was completed in Nansha, Guangdong. The infrastructure of yacht dock in Changlong, Hengqin has also basically been completed.
viiii. Building "Global Center Warehouse"
Practice: The “one-area with multi-function, one-warehouse in multi-form” model is built on the basis of “regulatory classification of warehousing goods by status”, so that a variety of logistics and trade forms that need to be stored in multiple regions and multiple warehouses can be handled and completed in one-stop way in the free trade zone. Goods can be transported into the area without declaration and goods in the area can be “carried over” among different management account books.
Achievements: A company in Qianhai-Shekou Area has saved approximately RMB 1 million through the transfer of 9 million euros of bonded goods from the bonded account book to the e-business account book, with time saved of more than 20 days.
x. Entry/exit convenience in Hengqin for Macau odd car numbers
Practices: Through online application for approval, first-line port customs clearance and acceptance, and cross-border supervision of second-line channels, cars with odd registration numbers can conveniently enter and exit Hengqin Island, and the first batch of car insurance guarantee slips for car with odd registration numbers have been issued.
Achievements: Since the implementation of this policy in December 2016, there have been more than 2300 applications filed for the border entry, renewal, and driver addition by motor vehicles entering and exiting Hengqin. Service guarantee is provided for more than 800 Macau cars with odd registration numbers when they enter and exit Hengqin.
III. Top Ten Best Cases of Financial Openness and Innovation
i. Relaxing the upper limit of foreign ownership in financial institutions under the CEPA framework
Practice: HSBC Qianhai Securities Co., Ltd. and East Asia Qianhai Securities Co., Ltd. officially commenced business on December 7, 2017, of which the share consolidation ratios by Hong Kong-owned asset were 51% and 49% respectively.
Achievements: With the opening of the Guangzhou Hang Seng Securities Investment Consulting Co., Ltd., Merchants Union Consumer Finance Company Limited, Hang Seng Qianhai Fund Management Co., Ltd. and the Hengqin Branch of Atlantic Bank, the openness policy on Hong Kong and Macao financial industries has been fully implemented in Guangdong under the CEPA framework.
ii. Issuing the first domestic green bond to support the operation of recycled paper projects
Practice: In February 2018, the "Guangzhou Yuexiu Group Co., Ltd. 2018 first phase green medium-term notes" with a registered capital of 4 billion yuan was successfully issued.
Achievements: The issuance of green bonds has broadened the direct financing channels of enterprises in the free trade zone and reduced the cost of corporate financing.
iii. China's first private equity information supervision service platform through central and local cooperation
Practice: Shenzhen Securities Regulatory Bureau and Qianhai Administration co-founded the Shenzhen private equity information service platform to explore the “supervision + self-discipline + service” model of the “big data + artificial intelligence”. By using machine learning to add regulatory practices, efforts are made to resolve the regulation problems of “being multiple, miscellaneous, and chaotic” in private entity, realizing timely warning of risks.
Achievements: Since its launch in April 2017, it has received reporting of 1974 private equity fund managers, 6,660 private equity products (with a management scale of 1.096299 billion yuan), and 67,704 registered investors. A total of 103 institutions with suspected abnormality were discovered, and more than 80 inspections were carried out in total, of which 5 institutions with illegal clues were transferred to the public security organ for filing.
iv. China's first full-line, self-service, small-scale recycled loan product “micro-lending”
Practice: In view of the loan difficulties of small and micro enterprises and mass customers who cannot obtain loans easily, timely and conveniently, Microcred Banks pioneered in the combination of consumer finance and social data, and launched self-service, small credit, revolving use of loan products "micro-lending" on the mobile terminal of standardized mobile phone.
Achievements: Since its launch in May 2015, the number of successfully registered customers has reached 13.02 million, among which 3.57 million customers have already borrowed money using this product. The “micro-lending” service covers 567 cities in 31 provinces, autonomous regions, and municipalities; cumulative distribution of loan has reached 142.3 billion yuan and loan balances have reached 42.2 billion yuan. The loan non-performing rate was only 0.28%; the joint loan platform has received 25 cooperative institutions for online operation, and has realized the issuance of small scale loans of 87 billion yuan, effectively meeting the emergency financing needs of 2.21 million public customers.
v. The only bank-level CIPS clearing center located outside the head office in China
Practice: As a participator of CIPS system structural design, the Agricultural Bank of China located the CIPS Clearing Center of the Head Office in Qianhai Branch.
Achievements: Since the establishment and operation of CIPS clearing center, a total of 65,000 transactions in cross-border RMB transactions have been cleared, amounting to more than 730 billion yuan. The average daily clearing transactions reach 250, with an amount of 3 billion yuan.
vi. The first national cross-border transfer of non-performing assets achieved through transaction platform
Practice: Shenzhen Qianhai Financial Assets Exchange, as the only domestic financial assets exchange approved for cross-border non-performing asset business, piloted a project of cross-border assignment of debt. In 2016, it completed the first national cross-border transfers of non-performing assets through the transaction platform, with an transaction amount of 23.4 million US dollars.
Achievements: The cross-border transfer of non-performing assets has further eased the pressure on various domestic banks, financial asset management companies and other non-bank financial institutions in disposing non-performing assets, therefore revitalizing the credit inventory and avoiding financial risks.
vii. National Intellectual Property Operation and Trading Platform Launched
Practice: Hengqin Area set up the first domestic platform for financial innovation and intellectual property operation and trading, the “Cycloponic National Platform”, initially forming an online trade system featuring financial innovations such as cross-border intellectual property trading and pledge financing.
Achievements: The platform has 86,900 registered members, with 104 stores of various types opened here. The platform has seen a completed transaction volume of 5 million yuan, with more than 5,000 patents reserved for sale. In 2017, 192 patent transactions of various types have been concluded offline on the platform. At the same time, intellectual property pledge financing business scale has reached an amount of 93.9 million yuan in Zhuhai.
viii. China's First Internet Financial Arbitration Service Platform
Practice: Establishing the first domestic Internet arbitration platform dedicated to solving financial disputes, which consists of three major subsystems: Internet arbitration parties and arbitrators, Internet arbitration core business processing, and Internet arbitration committee management, therefore realizing the connection with the domestic Internet transaction financial platform, achieving online batch acceptance and handling of Internet financial dispute cases from various platforms.
Achievements: Changing traditional arbitration methods and realizing high efficiency in arbitration. The application of expedited procedures for small-scale Internet-based financial dispute cases would only take six days, from the trial of the court to the adjudication, with only 10 days taken for case handling of ordinary procedures.
viiii. Pilot QFGP, QFLP and QDIE cross-border business
Practices: Taking the lead in piloting cross-border operations such as QDIE, QFGP, and QFLP in the country.
Achievements: These cross-border financial innovation businesses have attracted domestic and foreign capital for supporting the development of the real economy in the free trade zone. Enterprises under the QFGP, QFLP, and QDIE systems have operated stably and products thereof have been kept in a stable state since the establishment of the system. Investors have given good responses, and the net asset value has steadily increased.
x. First national cross-border ship charter asset transactions in US dollar settlement
Practice: On October 30, 2017, ICBC Leasing Hong Kong Company listed and sold a Hong Kong-based handy-size bulk carrier called “Haikuo” through the shipping exchange platform of the Guangzhou Shipping Exchange at the US dollar price, and eventually the cargo ship was purchased by a customer from Fujian, with a transaction price of 8.4 million US dollars.
Achievements: Making a breakthrough in function improvement from one-way cross-border asset trading business (cross-border import) to two-way cross-border asset trading business (cross-border import and export); and the financial institutions(ICBC Leasing), as overseas shipowner, disposed offshore assets on domestic third-party asset trading platforms for the first time.