Free Trade Zone helping firms grow

Yichang Area offers range of corporate services that streamlines administration and empowers economy

China (Hubei) Pilot Free Trade Zone Yichang Area, or FTZ Yichang Area, in Central China's Hubei province, has vowed to take advantage of the FTZ's construction process to support regional economic growth.

The FTZ Yichang Area covers 27.97 square kilometers. Its main parts are situated in the Yichang Hi-Tech Industry Development Zone, Dongshan Industry Park and a bioscience industrial park.

By the end of November, the area had attracted more than 4,700 businesses and secured 95 investment projects with an overall agreed investment of 35.3 billion yuan ($5.28 billion), according to officials. Many leading foreign trade companies such as Alibaba.com, part of Alibaba Group, have established branches in the FTZ Yichang Area. The area also attracted cross-border e-commerce businesses, parallel imported automobile traders and an online crowdsourcing service.

Over the past two years, the area has taken a series of measures to streamline administration. For instance, the area merged different forms of certification required of businesses into one. Companies applying for a certificate of completion for construction projects have seen the processing period significantly shortened.

Hubei Golden Three Gorges Printing Industry Co, a printing service provider, signed an agreement with the FTZ Yichang Area to use 15 hectares of "standard land" in August. The standard land is where businesses are given detailed terms about the use of the land, for instance, emission standards, construction standards, industrial development direction and production standards. Construction can start once the companies sign the agreement. The government will examine the project after construction is complete to see if it meets the standards.

Under the old model, companies that agreed to use the land had to get approval from several government departments before construction could begin.

"The most significant change is companies do not need to get through complex processes to get all kinds of approvals, which will help to significantly reduce construction costs," said a management member of Golden Three Gorges.

Premium environment

The FTZ authority is aware that a premium business environment is one of the most important elements in promoting opening-up and regional development. As a result, they decided to take measures to provide more support and convenience to companies.

"We will replicate the best practices of other FTZs. In situations where there is no replicable experiences, we will firmly promote innovation to become an explorer," said an official.

In early 2018, automobile maker GAC Group decided to build a production line in Yichang and planned to import production equipment from around the world. The company also planned to import a large number of transmissions after the production line started running. GAC considered getting customs clearance in Guangzhou of Guangdong province and then transporting the imported goods to the Yichang factory. However, it found the process would have a high logistical cost and accrue huge taxes. Yichang Area then suggested GAC use the Yichang Three Gorges Bonded Logistics Center (Type-B). This would allow GAC to pick up goods based on production demand.

In China, a Type-B bonded logistics center is a centralized customs-supervised area operated by a domestic enterprise's legal representative in China who specializes in the bonded warehousing logistics business.

By using the bonded logistics center in Yichang, GAC can pay tax afterward, which can help reduce financial pressure, said officials.

The FTZ Yichang Area's effort not only won recognition from GAC, but also pushed forward development of the bonded logistics center in Yichang.

In the first 11 months of 2018, the Yichang Three Gorges Bonded Logistics Center received 2,117 requests for customs declaration. The total value of goods under customs supervision was 1.35 billion yuan. The center has become a leader in terms of throughput and growth rate compared to other bonded logistics centers in Hubei province, according to the area.

GAC is not the only company to have enjoyed premium services in the FTZ Yichang Area.

Hubei Long Chen Paper, a subsidiary of Taiwan paper production giant Long Chen Paper Co, is an importer of pulp. The company had to send samples to Shanghai for examination when using Yichang's customs clearance services for the first time, meaning that their goods had to be kept in custody for longer than the expected period. In previous cases, this kind of test would take at least 20 days, according to the area authority. Yichang Customs gave their results in seven days.

Hubei Long Chen's management was impressed by Yichang government's service efficiency and made a long-term plan to use Yichang's customs services.

Support small enterprises

In Yichang, many small businesses are keen to explore opportunities in overseas markets. However, they were constrained by a lack of foreign trade professionals. The FTZ Yichang Area supports a foreign trade service provider, Hubei Yimaotong Enterprise Management and Service, to encourage small and micro-sized companies to seek business opportunities in international markets.

Yimaotong provides one-stop foreign trade solutions ranging from transportation and customs declaration to exchange settlement and claim of export rebate. Local officials said that Yimaotong has reduced pressure on small companies to cultivate foreign trade professionals, enabling them to pay closer attention to production and sales.

In April, Yimaotong helped a new energy producer in the city to sell more than $200,000 of products to a client in South America. The management of the company said they are very satisfied with Yimaotong's professional services.

Yimaotong has expanded its operation to other cities in China. In April, a textile maker from Dongguan, Guangdong province, partnered with Yimaotong with the aim to boost its export business. By the end of 2018, most of the company's export-related work was completed in Yichang.

Looking ahead, operators of Yimaotong said the company will offer financial services to those small and micro-sized businesses.