Xinjiang Pilot Free Trade Zone Becomes Northwest China’s First Zone
November 1st marked a historic milestone for China as the country’s 22nd pilot free trade zone was established in Xinjiang. This zone, located in the northwest border region, aims to boost economic growth and promote international trade in the area.
Covering a sprawling area of 179.66 square kilometers, the Xinjiang Pilot Free Trade Zone encompasses three distinct areas: Urumqi, Kashgar, and Horgos. Among them, Urumqi takes up the largest portion with 134.6 square kilometers, while Kashgar and Horgos occupy 28.48 and 16.58 square kilometers respectively. This strategic move is expected to leverage Xinjiang’s exceptional geographical advantages, as it sits at the crossroads of “five ports connecting eight countries and one road connecting Europe and Asia.” In doing so, the Xinjiang Pilot Free Trade Zone aims to become a pivotal logistics hub linking Europe and Asia, crucially contributing to the development of the core area of the “Belt and Road Initiative.”
One of the main goals of the Xinjiang Pilot Free Trade Zone is to facilitate investment in the region. To achieve this, the zone will improve and streamline its foreign investment service guarantee mechanism. This will ensure that qualified foreign-invested enterprises enjoy equal access to both industrial and regional development policies. Furthermore, the zone will encourage foreign-funded companies to establish research and development centers within its boundaries. Entry barriers such as R&D expenses, the number of full-time R&D personnel, and equipment acquisition will be lowered to attract more foreign companies to invest in the zone’s cutting-edge research and innovation.
In addition to investment facilitation, the Xinjiang Pilot Free Trade Zone aims to bolster its financial services sector. Overseas financial institutions will be supported in establishing banking, insurance, securities, and other financial institutions in the zone, creating a favorable environment for international financial transactions. To further encourage foreign investment, banking financial institutions are encouraged to increase their support for infrastructure construction within the zone. This will provide the necessary “hardware” and amenities required for foreign businesses to thrive.
The establishment of the Xinjiang Pilot Free Trade Zone signifies the government’s determination to diversify and strengthen the regional economy, while also promoting international cooperation and trade. As China continues to champion its Belt and Road Initiative, this new pilot free trade zone will play a crucial role in connecting China with the rest of the world, driving economic growth, and fostering mutually beneficial partnerships.