The State Council, China's Cabinet, officially released a master plan for the China (Hunan) Pilot Free Trade Zone (FTZ) on September 21, 2020. The Hunan pilot FTZ was inaugurated three days later.

Scope of Implementation

The Hunan pilot FTZ covers 119.76 square kilometers and consists of three areas, Changsha, Yueyang and Chenzhou. Changsha is one of the key cities involved in the building of the Belt and Road Initiative and the development of the Yangtze River Economic Belt. Yueyang is the northern gate of Hunan in terms of opening-up and boasts a 163-kilometer golden waterway, part of the Yangtze River. As the southern gate of Hunan for opening-up, Chenzhou is a bridgehead from Hunan and other provinces in central China to the Guangdong-Hong Kong-Macao Greater Bay Area.

Regional Specialities

Changsha Area covers 79.98 square kilometers, including the Changsha Huanghua Comprehensive Free Trade Zone with 1.99 square kilometers of land. It mainly consists of the Changsha Economic and Technological Development Zone, the core area of the Changsha Airport Economic Demonstration Zone, the Changsha International Convention and Exhibition Center of the High-speed Railway Zone and Gaoqiao Grand Market. It aims to align itself with the Belt and Road Initiative, stress the development of an airport-related economy, and become a global high-end equipment manufacturing base, a center of advanced and modern service industries in inland regions of China, a leading area for in-depth economic and trade cooperation between China and Africa, and a growth engine for the development of central China.

Yueyang Area covers 19.94 square kilometers, including Yueyang Chenglingji Comprehensive Free Trade Zone with land of 2.07 square kilometers. It focuses on the development of an airport-related economy and aims to develop into a center of comprehensive shipping logistics in the middle reaches of the Yangtze River and an inland airport-based demonstration area.

Chenzhou Area covers 19.84 square kilometers, including the Chenzhou Comprehensive Free Trade Zone with land of 1.06 square kilometers. It focuses on emerging as a fast track between Hunan and Hong Kong as well as Macao, and as a demonstration area for undertaking the layout and transfer of relevant industries in inland regions and for cooperation between Hunan and the Guangdong-Hong Kong-Macao Greater Bay Area.

Agenda

According to the master plan, the Hunan pilot FTZ will focus on becoming a world-class advanced manufacturing cluster, a leading area for in-depth economic and trade cooperation between China and Africa, and an international investment and trade corridor linking the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao Greater Bay Area, and developing into a strategically oriented site featuring "one industry, one park and one corridor".

Enterprises

The Hunan pilot FTZ is home to a number of prominent enterprises such as Sanyi Heavy Industry Co., Zoomlion Heavy Industry Science and Technology Co., Sunward Equipment Group, China Railway Construction Heavy Industry Corporation, Lens Technology Corporation and Sinoboom Intelligent Equipment Group.

Reform Priorities

1. The master plan for the Hunan pilot FTZ has set the following 11 reform priorities. It is the first time that a domestic pilot FTZ has ever made such an arrangement.

2. To support concerned enterprises in completing deep-processing transit capacity and optimize the procedure for export tax rebates.

3. To support concerned enterprises in becoming involved in ore blending and improve their logistics, distribution, processing and delivery.

4. To support the categorization of exhibited natural mineral products at the China (Hunan) International Mineral and Gem Show in accordance with displayed specimens.

5. To explore the building of integrated entry-exit facilities for handling international mail, international express shipments and cross-border e-commerce.

6. To relax the restrictions on foreign enterprises in their application for the establishment of investment-oriented firms, lower the minimum amount of foreign investors' total assets to U.S. $ 200 million a year ahead of their investment, and abolish the limitations on foreign investors concerning the number of existing firms they have founded.

7. To streamline the settlement of foreign exchange generated from reselling bonded commodities in the pilot FTZ.

8. To improve cross-border e-commerce payment and remittance systems, allow cross-border e-commerce export-driven firms with overseas warehouses to collect payments in accordance with actual sales, and report the balance between their export and exchange settlement as required.

9. To explore the feasibility of goods transportation via high-speed trains.

10. To build a distribution and trading center for African non-resource products in China.

11. To further promote China-Africa cooperation on barter trade.

12. To coordinate assistance to African countries, organize training in African human resources and facilitate China-Africa economic and trade cooperation.