Building A Free Trade Account System: A Major Breakthrough In Hainan'S Business Environment

"The internationalization level of professional services is low, the financing problems of enterprises are prominent, the environment of social integrity and the rule of law is not perfect, and the government's consciousness of active service is insufficient." On the morning of December 10, in the face of the current problems in Hainan, Fu xuanchao, director of Hainan development and Reform Commission, did not shy away at the press conference of the action plan for optimizing the business environment of Hainan Province (2018-2019) (hereinafter referred to as the action plan).

After the problem was put on the table, the solution was put forward. According to Fu xuanchao, the plan of action is highly operational in benchmarking the world bank's business environment assessment index in 2019, which highlights how to accelerate the legalization, internationalization and facilitation of Hainan's business environment.

The 21st century economic report reporters have found that among the 40 reform measures proposed in the action plan, 11 aspects are included, such as establishing enterprises, obtaining construction permits, cross-border trade, protecting investors, and executing contracts. For example, Hainan expanded 24 reform items of "separation of license and license" on the basis of the first batch of 106 items of enterprise related administrative examination and approval, and the establishment of Hainan free trade account system, which were quickly interpreted as "breakthrough" measures by the outside world.

The experts interviewed said that Hainan's "breakthrough" in the "action plan" in essence reflects its pioneering exploration in the field of comprehensive opening up. In order to promote the construction of a pilot free trade zone and a free trade port with Chinese characteristics, Hainan needs to further open up to domestic and foreign investors. It is essential to conform to international rules, and the business environment "is a good starting point".

A free trade account is urgently needed

The 21st century economic reporter noted that the plan of action mentioned that Hainan should establish a free trade account system, promote the cross-border use of RMB under the capital account, and facilitate the exchange of trade investment, financing and exchange.

According to Fu xuanchao's interpretation, the establishment of Hainan free trade account system is to further develop Hainan's regional offshore trade, accelerate the establishment of a free trade account system that can reflect Hainan's global advantages, and reduce policy resistance and obstacles for the cross-border use of RMB.

According to Li Shijie, vice president of School of economics and management of Hainan University, the establishment of Hainan free trade account system is inevitable. He once pointed out in an article in May that Hainan must build an offshore RMB settlement center in the future, otherwise it would be meaningless to explore a free trade port with Chinese characteristics, "this is the intention of the Central Committee".

In fact, in the overall plan of China (Hainan) pilot Free Trade Zone issued by the State Council on October 16, it has been clearly proposed that Hainan should further expand the cross-border use of RMB, explore the convertibility of capital account, deepen the reform of foreign exchange management, explore the facilitation of investment, financing and exchange, expand the opening of the financial industry, and provide high-quality funds for trade and investment facilitation Financial services.

Therefore, Hainan provincial government will establish Hainan free trade account system as the pilot project construction work of the free trade zone, and conducted a special study on it on November 28. According to the meeting at that time, the head office of the people's Bank of China has approved the construction of Hainan free trade account system as early as September 15, and it is expected that the system will be officially launched on January 1, 2019.

On December 10, Li Shijie analyzed to the 21st century economic reporter that in order to explore the pilot free trade zone and free trade port, the opening and innovation of the financial market is the first priority, and the development and construction can not be separated from the financial support, so the free trade account has become the top priority.

The free trade account is a domestic and foreign currency account. Generally speaking, when an enterprise opens a foreign currency account, the process is complicated. Enterprises that spend money in US dollars and euro need to open corresponding accounts. If an enterprise has business relations with many countries, it needs to open a bunch of different accounts.

"The concept of" U-shaped "is formed in the free trade account, and the" exposure "refers to the overseas. Theoretically, it is completely connected with the overseas, while in the domestic, it is limited penetration. Under this rule, there is a certain form of penetration between the two accounts in the form of RMB. " Li Shijie said that this means that entities in Hainan Island and overseas institutions can handle cross-border fund settlement under current and direct investment through free trade accounts.

According to Li Shijie's conjecture, the root cause of RMB internationalization is that its return mechanism has not been well solved. Hainan should relax the access restrictions of cross-border two-way RMB capital pool, and the focus should be on exploring how to realize the two-way cross-border RMB liberalization. "This is also the responsibility of the free trade port with Chinese characteristics."

Reform highlights "Hainan characteristics"

As a matter of fact, the free trade account has been settled in Shanghai free trade zone as early as 2014. According to Bai Ming, deputy director of the International Market Research Institute of the Institute of international trade and economic cooperation of the Ministry of Commerce, Hainan's free trade account is actually a copy of the experience of Shanghai free trade zone.

"But replication is not a simple reproduction, it must highlight the characteristics of Hainan." Bai Ming analyzed the 21st century economic reporter that although both are free trade accounts, due to the foundation of manufacturing industry and modern service industry in Shanghai, the focus is on the trade of goods, while Hainan should focus on the tourism service industry.

In his view, "Hainan characteristics" is also reflected in many aspects of the action plan. For example, Hainan Province has expanded the reform of "separation of certificates and licenses" in an all-round way. On the basis of the first batch of 106 enterprise related administrative examination and approval items launched nationwide, 24 items in the three major industrial fields of tourism, agriculture and medical health have been included in the scope of "separation of certificates and licenses".

"This shows that Hainan's business environment reform is still based on the situation of Hainan Province, taking into account how to open up the most valuable and urgently needed areas." He believes that the 24 items to be expanded in Hainan are concentrated in the three major industries of tourism, agriculture and health care, which are the "Hainan characteristics" established in the construction of Hainan into an international tourism consumption center and a national ecological civilization experimental zone.

Taking the measures such as allowing foreign investors to invest in domestic Internet virtual private network business (the proportion of foreign shares shall not exceed 50%) and relaxing the limit of foreign shares of life insurance companies to 51%, for example, precisely takes into account the particularity of Hainan's establishment of an international tourism consumption center.

Li Shijie believes that the measures with the most "Hainan characteristics" are also reflected in how to conform to international rules.

The "action plan" specifically proposed that the negative list of cross-border service trade in Hainan Province should be formulated around seed industry, medical care, education, sports, telecommunications, Internet, culture, maintenance, finance, shipping and other key areas.

"In order to promote the construction of a pilot free trade zone and a free trade port with Chinese characteristics, Hainan needs to further open up to domestic and foreign investors, and it is essential to conform to international rules." Li Shijie said.

But at the same time, he believed that some measures of the action plan could be more "valuable".

"Taking the separation of certificates and licenses as an example, the problem in Hainan now is that there are too many" certificates. " He told reporters of the 21st century economic report that if Hainan wants to explore the construction of a free trade port, there will be a lot of innovative formats in the future. However, the system of issuing licenses by the government will hinder the development and growth of innovative formats to a certain extent.

Therefore, he suggested that Hainan should take the lead in exploring how to "reduce the number of certificates after licensing" while attaching importance to the "separation of certificates and licenses". "According to the thinking of negative list, we should not implement the license system in principle outside the key areas that need to issue licenses, so as to attract innovative formats to Hainan." He said.

Editor: Chen Jie,

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