China Opens to Service Industry

China will establish ‘Special Economic Zone for Service Industry (SEZSI)’ in Shenzhen. It is the first time in the history.

At 16th June, Financial Times, British daily paper specialized in economy, reported that Chinese government will establish ‘Special Economic Zone for Service Industry’ in Shenzhen of Guangdong, and open the zone to foreigners totally. The zone will induce 20 service industries such as; finance, securities, harbor, government procurement, tourism, hospital, logistics industries, etc.

The policy is analyzed to establish trial zone and to monitor the advantages and disadvantages from the open policy before opening the service industry totally as a obligation of the join to WTO. When China introduced market economy system in 1979, it established four trial economic zones such as Guizhou, Xiamen, Shenzhen, etc to evaluate the system and decided to open the economy.

Last year, as Joining WTO, China promised to open service market as well within three to five year in the future.

According to the Financial Times, Shenzhen Special Zone will not restrict to the ownership of corporation by foreigners while other regions restrict to 50% at maximum for service industry.

A person of the International Trading & Economic Cooperation of SEZSI of Shenzhen said that the central government allowed to open 20 key service industries, and tax exemption and other benefits are under consideration for the exporting of domestic products by government procurement business.

He added that 20 reputable multinational corporations show interesting for the economic zone at the moment and Shenzhen economy will take off again.

Shenzhen is bigger than Hong Kong (1091 km²) twice and induced 1860 cases of foreign investment, 4 billion dollars last year.

At the moment, Shanghai has also applied open project of service industry to the central government, and Tianjin and others will apply similar projects plan soon.

Jong-Dae Ha orionha@donga.com