BEIJING, Dec. 9 (Xinhua) — When Luo Feng visited Sri Lanka years ago, he noticed that the most popular products in airport duty-free stores were not cosmetics or chocolate, but rice cookers and washing machines. The Chinese businessman saw an opportunity.
Luo is founder and chairman of Beijing’s IZP Technologies Group, a big data and cross-border payment platform. He found Chinese exports to South Asia subject to high tariffs while Sri Lanka’s people need affordable home appliances.
“Why not establish a manufacturing base here?” He came to an idea that Chinese manufacturers could invest in Sri Lanka to produce and sell home appliances without import tariffs.
In a bid to achieve this goal, IZP’s subsidiary Globebill has reached an agreement with Sri Lanka’s central bank on clearing. In cooperation with the China Merchants Group, IZP is improving Sri Lanka’s infrastructure in ports and transportation. The company is also considering buying an airport as a free trade zone.
It has been no more than four decades since China opened its door to the outside world. From a country of almost universal poverty and isolation, it has become the world’s second largest economy with intensive integration into the whole world.
Mark Bartlam of Nankai University, Tianjin, has the first-hand experience of these changes. After getting his PhD from Oxford University in 2000, he came to China to continue his work in biochemistry.
“China’s research system is becoming more internationalized and open. You meet many foreign scientists in China’s universities. Universities are recruiting people from all over the world,” Bartlam said.
Bartlam said there were no special policies in 2000, which could treat foreign scientists working in China equally in terms of funding application.
“It was difficult for me then, but now I can get as much funding as my Chinese colleagues,” he said, referring to the efforts of Chinese universities to attract more top researchers from all over the world.
For ordinary Chinese people, greater integration with the world means they have much more choices on their shopping lists.
“One direct benefit for ordinary people is easy access to foreign products due to the boom of cross-border e-commerce. As customs and quarantine systems are simplified, imported products are getting cheaper,” said Liu Enzhuan, executive dean of Tianjin Academy of Free Trade Area.
Cross-border e-commerce business can avoid tariffs and value-added taxes of as much as 30 percent. An increasing number of cross-border e-commerce platforms are doing businesses in eight cities allowed by the General Administration of Customs of China. Some estimate that the market will be worth 1 trillion yuan (155.7 billion U.S. dollars).
“In the past foreign travel agencies are not allowed to do overseas travel businesses in China, but in the future they will be. Foreign health care services will also be allowed in the zone,” said Wang Qingsheng of the administrative committee of the Tianjin pilot free trade zone.
But opening up in China at present is more about “going out.”
Wang Yiwei of Renmin University, Beijing, calls the opening up in the early 1980’s the “globalization in China.”
At that time China created special economic zones in coastal areas to attract foreign investment and export products with favorable tax policies and others. “That way was not sustainable at all. Opening up will enter a new, more participatory, stage or ‘China in globalization’,” Wang added.
At a meeting in late October on development plan for next five years, the Communist Party of China (CPC) Central Committee called for a higher level opening-up, actively joining global economic governance and the supply of public goods.
China has built four pilot free-trade zones in Shanghai, Guangdong, Fujian and Tianjin, piloting reform of traditional administrative procedures.
For instance, Shekou area of Guangdong pilot free trade zone has built a dedicated commercial court and an international arbitration mechanism to provide a better legal environment adaptable to international standards.
“We will not attract foreign investment with favorable tax policies, but with favorable and reproducible systems,” said Wang Qingsheng.
In terms of discourse power in global economy, China is strengthening it with the Belt and Road initiative and the Asia Infrastructure Investment Bank.
The Belt and Road initiative is a grand blueprint for China’s overseas strategy. In his latest work — Belt and Road: Opportunities and Challenges — Wang Yiwei describes the proposals as an inevitable result of opening up.
The IZP’s Globebill has become one of the most important cross-border payment platforms for renminbi, especially in central and Western Asia, Russia and Latin American countries. IZP is developing a “decoding” system for customs in different countries, to shorten clearance time where systems are not advanced.
Some are worried that China’s participation in the world will threaten their market, but Luo Feng did not agree.
The IZP has purchased an airport in Parma, Italy, and plans to turn it into a hub for China’s businesses.
“Our development will bring more opportunities for others. If we bring Chinese tourists, trade and other resources, the place will become a new financial center,” Luo said.
“We are developing a new market rather than competing with others,” Luo said.