Zhejiang pilot FTZ an important hub for opening up in east China

Estimated reading time: 5 minutes

By Jiang Nan, Dou Hanyang, People's Daily

Since its founding, the Zhejiang pilot FTZ has embraced rapid development and continuously contributed to the high-quality development of the open economy.

Last year, the Zhejiang pilot FTZ, occupying less than 1/400 of Zhejiang province's total area, accounted for 6.5 percent of the newly registered enterprises, 9.2 percent of the tax revenue, 20.6 percent of the foreign trade volume, and 18.1 percent of the actual utilization of foreign capital in the province.

At present, the Zhejiang pilot FTZ has adopted a "four-area" development model, with each area having a strategic focus based on its strengths. The Zhoushan area is developing as an oil and gas free trade hub; the Ningbo area focuses on logistics and transportation; the Hangzhou area is emerging as a digital free trade zone; the Jinyi area is dedicated to commerce and trade.

The Yiwu International Trade Market, which is located in the Jinyi area, is the world's largest wholesale market for small commodities. Selling 2.1 million categories of small commodities to over 230 countries and regions, it fuels the development of 2.1 million small and medium-sized enterprises and supports jobs for 32 million people.

The Jinyi area cooperates with some 40 cross-border e-commerce platforms around the world, and is working to continuously improve the support system for digital trade sectors such as cross-border e-commerce. Besides, it is also optimizing its trade models, and has built an official website market "chinagoods.com."

According to an official, the Yiwu International Trade Market boasts 75,000 business stalls. In the past, purchasers had to go from stall to stall searching for the items they wanted, which was both tiring and time-consuming.

Today, thanks to the efforts to streamline procurement processes, purchases can be made swiftly and thus the trade volume has been significantly improved.

The Yiwu-Xinjiang-Europe freight train route, which starts from the Jinyi area, has developed into one of the China-Europe freight train routes with the most operating lines and highest loading efficiency since it was launched nine years ago. Today, with the train service heading west by land, and the Yiwu-Ningbo-Zhoushan corridor going east by sea, goods and commodities are flowing steadily from the Jinyi area to the world.

Over the past three years, the Ningbo area of the Zhejiang pilot FTZ has been continuously promoting trade liberalization and facilitation, further consolidating and enhancing its status as a global cross-border trade hub.

In 2022, the cargo throughput at Ningbo Zhoushan port reached 1.26 billion tons, ranking first globally for 14 consecutive years. The container throughput reached 33.35 million twenty-foot equivalent units, maintaining its position as the third largest globally.

From January to August this year, Beilun district, where the Ningbo area is located, achieved a total import and export volume of 295.4 billion yuan ($40.37 billion).

The Hangzhou area of the Zhejiang pilot FTZ is leading the way in integrating high-standard digital trade rules, exploring the establishment of a comprehensive institutional framework for the development of digital trade, and nurturing digital industry clusters with international competitiveness.

Currently, Hangzhou's cross-border e-commerce retail export platforms account for two-thirds of China's total, and its cross-border payment and settlement volume represents 40 percent of the country's cross-border e-commerce exports.

In the first half of this year, Hangzhou's digital service trade volume increased by 19.6 percent compared to the same period last year. Knowledge-intensive service trade accounted for over 80 percent of service trade, surpassing the national average.

In the hall of the Zhejiang Mercantile Exchange, a giant electronic screen is eye-catching. The screen displays not only the trading prices of various oil products, but also China's Zhoushan LSFO (low sulphur fuel oil) bonded bunker price, known as the "Zhoushan price."

"The market share of enterprises currently participating in Zhoushan's bonded bunker price reporting has increased to 84 percent in the local bonded bunkering market," said Lai Xin, chairman of the Zhejiang Mercantile Exchange. He noted that the "Zhoushan price" was officially introduced on June 21, 2021, marking an important institutional innovation achievement of the Zhoushan area.

"This mechanism breaks the monopoly of overseas markets on LSFO pricing," Lai stated. In the past, China's domestic oil and gas trading market lacked pricing power, but now with the "Zhoushan price," it can effectively promote the use of RMB pricing in the bonded LSFO bunkering sector, and gradually increase the international influence of China's spot price for bonded bunker fuel.

The Zhoushan area continues to build an international oil and gas industry cooperation platform with global influence. This has led to a spillover effect of expanded industrial chains and outward development in refining, storage, shipping and more. Consequently, the Zhoushan area is seeing the rapid emergence of a trillion-yuan oil and gas industry cluster.

Currently, the Zhoushan area is home to 12,700 oil and gas companies. In 2022, its oil and gas trade volume reached 776.123 billion yuan. Over the past 6 years, the accumulated trade volume has exceeded 270 million yuan, with an average annual growth of 64 percent.