It is expected that 2018 will mark the beginning of the construction of free trade ports with Chinese characteristics

Premier Li Keqiang proposed "exploring opening free trade ports, and working toward new heights in reform and opening-up" in the Government Work Report delivered at the first session of the 13th National People's Congress in March. This is an important and concrete manifestation of fully implementing the spirit of General Secretary Xi Jinping's report to the 19th National Congress of the Communist Party of China in October last year. The free trade port proposal has appeared several times in the government-approved plans for the Zhoushan Archipelago New Area and Shanghai Pilot Free Trade Zone. This time, Xi made the announcement that Hainan will be China's largest free trade zone when delivering a speech at a gathering on April 13 to commemorate the 30th anniversary of the founding of Hainan province and the Hainan special economic zone.

In an article in People's Daily on Nov 10, Wang Yang, the newly elected chairman of the 13th National Committee of the Chinese People's Political Consultative Conference, said: "Free trade ports are located in a country's (or region's) territory but outside the customs, where goods, people and funds can enter and leave with great freedom, with the majority of goods exempt from duties. It is a special economic zone with the highest level of openness in the world at present."

Based on this statement and international experience in the construction of free trade ports, I would also like to discuss a few personal considerations on specific issues such as the significance, conditions and developmental choices of the construction of a free trade port with Chinese characteristics.

As Wang clearly pointed out, our country's coastline is long and its island resources are abundant. Exploring the construction of a free trade port with Chinese characteristics marks a new high point, and will foster a better business environment and a stronger supply chain, which are all of great significance in promoting the development of an open economy.

What has been the relationship between exploring the construction of a free trade port with Chinese characteristics and the reform and innovation of pilot free trade zones in recent years? Since 2013, China's pilot FTZs have seen many significant advances. These include the adjustment of government functions, the reform of foreign investment management systems, the transformation and upgrading of trade development and supervisory practices, the enhancement of financial transparency, and the betterment of the legal environment. All have helped bring about the formation of a number of innovations in institutions and mechanisms that have been replicated and promoted on a larger scale and have provided impetus for deepening reforms and expanding openness.

According to Xi's report at the Party's 19th National Congress, the next step for free trade and pilot FTZs should focus on improving the quality of construction, implementing international advanced rules and strengthening systematic integration and implementation of reform measures. This will produce better results and further demonstrate the positive role of experimentation in reform and opening-up.

The establishment of a free trade port marks the further deepening and strategic extension of the ongoing reform and innovation. It represents an active exploration of creating a new level of openness, guided by the successful experience of high-standard FTZs around the world. To be specific, the FTZ is an experimental field for institutional exploration. It covers special customs surveillance zones and noncustoms areas. The experience can be replicated and promoted nationwide.

Free trade ports should have in place special customs surveillance zones. They should be established in accordance with the highest-level internationally recognized trade and investment liberalization standards set for the area "outside customs jurisdiction and within the country's territory". The replication and promotion of construction models and experiences require applicability to specific regional conditions.

According to the overall requirements for establishing a special functional area with the highest level openness on a global scale, a free trade port with Chinese characteristics should have at least the following conditions:

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