The bustling Chengdu Qingbaijiang Railway Port Area is making people longing for robust development. Photo taken by Hao Fei

As a national “trial field”, making institutional innovation is the core task of the Sichuan Pilot Free Trade Zone

A patch of field

The Sichuan Pilot Free Trade Zone has provided fertile soil for pioneering system exploration in a risk-controllable manner.

A form of vigor

The free flow of factors has optimized resource allocation, improved economic efficiency, and offered conditions for Luzhou and other places to participate in the industrial division of labor.

A source of vitality

The Pilot Free Trade Zone is a nursery of young plants, not a showroom of potted bonsai. It is necessary to form more institutional innovations that can be promoted nationwide.

Getting a snapshot of the progress in the frontline

On the afternoon of May 7th, near the scheduled interview time, Liu Yu, Deputy Director of the Management Committee of South Sichuan Port Area of the Sichuan Pilot Free Trade Zone, was still helping a Fortune 500 company to coordinate with relevant departments to finalize the details of settling in the pilot zone. He had to ask the report team of "The Magnificent 70 Years of Struggle for A New Area - Field Investigation of Reporters to National Pilot Areas" to wait for a while.

This has aroused the interest of journalists. As a national “experimental field”, institutional innovation is the core task of the Pilot Free Trade Zone. Liu Yu’s work has revealed a lot about the transformation of government functions in this “field”. What kind of role does institutional innovation play behind this?

With such doubts in mind, from May 7th to 10th, the reporter set foot on the Sichuan Pilot Free Trade Zone to examine the achievement of the country's "experimental field" in the frontline.

Behind the over 400 institutional innovation cases

Institutional innovations require more than just process optimization, and they are driving the transformation of government functions at a visible speed

While waiting, the reporter visited the planning and exhibition hall of the South Sichuan Port Area.

On the panel of “Main Achievements”, the item that ranks the first is “promoting 139 trial tasks and 215 institutional innovations”.

However, this does not surprise the reporter. Before this visit, Shi Xin, the Assistant to the President of the Comprehensive Research Institute of Sun Yat-sen University, shared his research results with the team: Over the past two years, the Sichuan Pilot Free Trade Zone has accumulated more than 400 institutional innovation and practical cases. According to the third-party assessment, the system innovation of the Sichuan Pilot Free Trade Zone ranked the top in the country, and the Chengdu area ranked the first among the 15 places in the third batch.

After this visit, the reporters met Liu Yu and his team members. The above facts have been endowed with a richer meaning in their words –

“The experimental area has offered fertile soil for system exploration.” In the conference room, Feng Jian, Deputy Director of the Administrative Examination and Approval Bureau of the South Sichuan Port Area Management Committee, introduced the frontier exploration he and his colleagues are doing – The traditional “administrative license” has been turned into “administrative approval” that is popular in developed regions of the world. He gave an example: if enterprises are to increase their business scope, in the past, they must “first get the approval and then launch concrete actions”. So they have to go to the industrial and commercial window to go through the formalities and obtain permission. But now, they can “launch operations directly without preapproval” in the Pilot Free Trade Zone. The company could act first after making an announcement, and then confirm at the industrial and commercial window anytime after.

This will greatly save the company's time, but is there any risk attached? Feng Jian is frank in this regard, "Reform will of course put an unprecedented high demand on post-event supervision of government departments. It is not ready to rush into promotion, there is indeed potential risk. It also points out the reason for launching Pilot Zones – making trial endeavors for the country in a risk-controllable region.

This is also the original intention of cutting-edge exploration. More than one interviewee mentioned that the institutional innovation of the Sichuan Pilot Free Trade Zone focused more on pioneering and deeper exploration experiments than simple process optimization.

These explorations are driving the transformation of government functions at a visible speed. Yu Di, Deputy Director of the Taxation Bureau of Longmatan District of Luzhou City of The State Administration of Taxation, admitted that the government has changed its way of thinking. "In the past, the government department was concerned more with how to perform functions in a more stable way and avoid responsibility accordingly. But its current concern is how to make it easier for companies even though that means more duties for itself."

Behind the 53,000 newly established companies

To build a more open economy with freer flow of factors, goods and services by breaking through various obstacles

While walking, the reporter encountered Tang Shaowu, the head of Xiamen Jianfa Raw Materials Trading Corporation, a world top 500 company that has just settled in the zone. He said that a subsidiary company has been set up in South Sichuan Port Area to build a southwest distribution center for import and export commodities.

It is nothing new to see well-known enterprises moving in the Pilot Free Trade Zone. According to the Provincial Office of Free Trade, as of the end of last year, 53,000 new enterprises were established in the Sichuan Pilot Free Trade Zone, and 628 foreign-invested enterprises were introduced. The latter accounted for nearly 1/2 of the total number of foreign-invested enterprises in the province.

Why do they choose here? Tang Shaowu raised two points: First, it is a competitive dock and passage: efficient handling of goods and approval matters; local practices of "tax rebate for port of departure", etc., which allow enterprises to get tax rebates in advance, alleviating their pressure of capital turnover. Second, it has a sound business environment. "They used to worry about local protectionism which could hinder the process. After a few years’ examination, they found that there is nothing to worry about."

Sheng Yi, a researcher at the Provincial Academy of Social Sciences, believes that these two strengths are basically the same: the Pilot Free Trade Zone promotes more optimal resource allocation and improves economic efficiency to build a more open economy by breaking through various obstacles and freer flow of factors, goods and services.

The Qingbaijiang Railway Port Area is the best embodiment. On May 9th, the reporter saw a passing train of China Railway Express (Chengdu) slowly leaving the station and heading towards Europe by the window of the office building of the Management Committee. According to public reports, the number of trains of China Railway Express (Chengdu) has outnumbered other series of trains in the country for three consecutive years. “The capacity of train for heavy-load has been greatly improved, especially the return trip. A few years ago, the train always returns with empty carriages. But by April of this year, 80% of the return train has been loaded with goods.” Zheng Shuangli, Director of Chengdu International Railway Port Investment (Group), said that the much more convenient international trade in the Pilot Free Trade Zone has largely contributed to this growth.

The free flow of factors is reshaping the new pattern of local economic development. "In the past, Luzhou could retain no wealth with resources come and go, leaving it with only the 'exhaust gas.'" Liu Yu believes that due to the business environment, little talent reserves and other reasons, the comparative strength of Luzhou Port is difficult to be employed in the past. The Pilot Free Trade Zone has provided conditions for the local community to participate more in the industrial division of labor. "We not only build channels, but also devote to allocation and processing. We want to attract more industrial chains to settle in."

Behind the promotion of 29 institutional innovations

The Sichuan Pilot Free Trade Zone has turned itself into a nursery for “young plants”, and going forward, the key lies in how to “turn the nursery into a forest”

On May 10th, Li Liang, the person in charge of the Airport Service Center for Enterprise Free Trade in the Shuangliu block of Chengdu Tianfu New Area, told reporters that it was initially set to serve 34 square kilometers around Shuangliu block, but now that firgure has more than expanded 10 times to the entire Shuangliu District, “for starters, highly efficient service has enabled us to cover more enterprises, and moreover, this has driven other service centers to improve their efficiency.”

The promotion of institutional innovation is a topic of common concern to almost all interviewed experts. They all mentioned that the Pilot Free Trade Zone is a “nursery of young plants”, instead of a showroom of potted bonsai. It is necessary to speed up the formation of more institutional innovations that can be emulated. “Maximize the benefits of reform as soon as possible,” said Deng Fuhua, Assistant Dean of the China (Sichuan) Pilot Free Trade Zone Comprehensive Research Institute of Southwestern University of Finance and Economics.

Setting foot on the 199 square kilometers of the Sichuan Pilot Free Trade Zone, the reporter found that the relevant achievements have quickly taken root and have been introduced to broader areas – from the notarization item of “once-for-all errand-running” to the export-oriented tax rebate measures for production-oriented export enterprises, and from the quick review mechanism for intellectual property-related cases to the reform of “unimpeded access with the first certificate” for administrative examination and approval... As of February this year, 29 institutional innovations have been promoted throughout the province. Not long ago, the State Council made public announcement to promote the 18 experiences, of which Sichuan accounted for one-sixth, among the fifth batch of Pilot Free Trade Zones.

Deng Fuhua believes that the Sichuan Pilot Free Trade Zone has turned itself into a nursery of young plants, and going forward, it is to grow that into a forest. On May 21st, in the Provincial Office of Free Trade in Chengdu, the relevant staff introduced a new plan for “turning the nursery into a forest”: within the next year, we will strive to cultivate 15 pioneering zones for the pilot reform in the Pilot Free Trade Zones. These pioneering zones will enjoy the same decentralized provincial authorities as the Pilot Free Trade Zones for better promotion of their achievements.

First-hand experiences

What is the fountain of such momentum?

One can always feel a strong momentum being inside the Sichuan Pilot Free Trade Zone.

That momentum is manifested in the conversation with the on-spot staff. "We only match with the best target." “As long as the reform is being pushed ahead, it does not matter how much energy we have to pour in”. That momentum can also be seen on the achievement record upon its second anniversary. The Sichuan Pilot Free Trade Zone has accumulated more than 400 practical cases – a new one in less than every 2 days.

What is supporting basis for this momentum? A staff of the Qingbaijiang Railway Port Area told reporters that in the past, he acted more like an "executor" by doing things according to the rules. After the establishment of the Pilot Free Trade Zone, everyone is responsible for solving problems. When encountered with difficulties and challenges, everyone should first think about feasible solutions instead of calling it quits.

That is the embodiment of the transformation of the functions and mindsets of civil servants, and also the fruit of local encouragement and tolerance for experimental explorations. In the Sichuan Pilot Free Trade Zone, “bold attempts and trials” was held by the leaders of the district management committees as a belief. A number of interviewees mentioned that leaders dare to make decisions and take responsibility, easing frontline staff with a lot of worries.

But it is the group of dreamers and brainiacs that is underpinning this momentum. A person in charge of the Chengdu Management Committee of the Sichuan Pilot Free Trade Zone said that the management committee is basically made up of young cadres in their 30s and 40s. "They lead a casual life, having a nap whenever sleepy and a bowl of noodles whenever hungry." But they are fully motivated in doing meaningful work that is beneficial to the company and the society.

This may be the most important experience. After all, changes can only happen when you have the inclination.

Getting a direct view of hot issues

The reporter visited the Chengdu Qingbaijiang Railway Port Area –

The secret of growth in parallel-import cars

On May 9th, more than 10 brand new Middle East land cruisers in the Chengdu Qingbaijiang Railway Port Area of the Sichuan Pilot Free Trade Zone were neatly parked in the exhibition hall of Chengdu Xiangxinda Trading Corporation. "This car is widely welcomed by customers in the Southwest with its 4.0 displacement, V6 engine, high chassis, and strong throughput capacity." Luo Qiong, head of the company, revealed that the car is the sales champion of the company for the first-quarter, "about 40 cars have been sold."

When zooming out to the entire Chengdu Qingbaijiang Railway Port Area, we could see its dazzling "achievements". As the only pilot port for parallel-import automobiles in the province, from January to April this year, Chengdu Qingbaijiang Railway Port Area secured 400 parallel imported cars, a number far exceeding the same period of last year, and more than 400 orders are already in processing.

"In the past, we had to go to Tianjin, Shanghai and other places to see and buy cars. Now thanks to the railway port, we could buy cars directly from the Middle East, which greatly saves time and transportation costs." Luo Qiong said. The reporter learned that the continuous optimization of maritime-railway multimodal transportation, Chengdu Qingbaijiang Railway Port has opened a route linking main sources of parallel imported vehicles in the Middle East, North America and Europe via Qinzhou, Shanghai and Ningbo.

We continue to improve the hard facilities and work out new ways for customs clearance. In April last year, Chengdu Qingbaijiang Railway Port became the first inland port in the country to use the bonded logistics center for parallel imported cars "There was no such business before. Tax is collected upon arrival at the shore, which puts a lots pressure on capital turnover. We could only take the order first and then import the car later. Now we can store the car in the bonded logistics center for export one by one, and then get the license and pay taxes.” Luo Qiong said that after this service is launched, consumers do not have to wait two or three months to pick up the car. “They could basically get the car in just one day with a much reasonable price than before.” In addition, Chengdu Qingbaijiang Railway Port has also introduced the "one bill-of-lading system" for multimodal transportation to realize the settlement of letters of credit with the bill of lading as the pledge of property rights.

Luo Qiong gave her thumb up for many other things. At present, Chengdu Qingbaijiang Railway Port has determined to subsidize the development of parallel imported car trade in terms of trade volume, 3C certification, and after-sales maintenance. At the same time, it promotes trade financing of parallel imported car by multimodal transportation bills of lading and customs guarantee insurance. "Going forward, we are to establish a normal operation mechanism for maritime-railway transport, establish sharing warehousing of non-bonded vehicles and spare parts with bonded goods, and carry out classified supervision to further reduce the logistics costs of enterprises," said the relevant person in charge of the Bureau of International Trade and Logistics of Qingbaijiang District.