On October 15, the Shanghai Municipal Development and Reform Commission officially published the “Construction Plan for the Second Batch of Shanghai Pilot Free Trade Zone Linkage Innovation Zones” (hereinafter referred to as the “Construction Plan”) on its website. It added eight key areas—Hongqiao International Central Business District, Shanghai International Tourism and Resort Zone, Jing’an, Changning, Putuo, Qingpu, Jiading, and Jinshan—as well as the entire areas of five national-level economic and technological development zones—Minhang Economic and Technological Development Zone, Hongqiao Economic and Technological Development Zone, Shanghai Jinqiao Economic and Technological Development Zone (non-Pilot Free Trade Zone area), Shanghai Chemical Industry Park Economic and Technological Development Zone, and Songjiang Economic and Technological Development Zone—as the collection and guidance for the second batch of “8+1” zones.
From a deeper perspective, this replication and promotion is not simply copying experiences verbatim. Instead, it involves each district, based on its own industrial situation and enterprise demands, digesting, absorbing, undertaking independent reforms, and making bold attempts regarding the innovative practices of the Pilot Free Trade Zone.
The published “Construction Plan” includes two lists. The first list is the “Replication and Promotion List,” containing 57 task measures applicable to all linkage innovation zones. The second list is the “Independent Reform List,” which supports each district in developing characteristic industries according to local conditions through 29 task measures.
Innovation Experience Linkage and Sharing
The Shanghai Pilot Free Trade Zone is known as the “testing ground for reform.” However, pioneering reforms and leading-edge openness cannot remain solely as experiments; they must be replicated and promoted to truly unleash the effectiveness of institutional innovation.
In August last year, the municipal government approved and issued the construction plan for the first batch of Shanghai Pilot Free Trade Zone Linkage Innovation Zones. This established the first batch of “6+1” linkage innovation zones in relevant key areas of six districts including Huangpu and Xuhui, as well as six comprehensive bonded zones in areas like Songjiang and Fengxian (with the comprehensive bonded zones collectively counted as one linkage innovation zone). Over the past year, the construction of the first batch of linkage innovation zones has achieved initial results. An assessment showed that 109 out of the first 119 reform measures have been implemented or are being advanced in an orderly manner, accounting for 91.6%.
The announcement of the second batch of linkage innovation zones by Shanghai aims to continue expanding the radiating and driving effect of the institutional innovation from the Pilot Free Trade Zone, releasing the dividends of institutional innovation on a broader scale.
Specifically, the 57 replication and promotion task measures cover multiple fields including investment, trade, finance, cross-border data, scientific innovation, and talent. Many of the replication and promotion contents are “customized” based on enterprise demands. Hou Hualong, Deputy Director of the Reform Division of the Shanghai Municipal Development and Reform Commission, explained that during the early stages of drafting the plan, they extensively collected enterprise opinions. Ultimately, they matched over 400 policy demands reflected by enterprises from various districts with relevant departments, identifying corresponding and implementable reform measures for precise replication and promotion.
For example, in February this year, Shanghai issued a negative list for data outbound transfer and corresponding management measures, applicable to the Shanghai Pilot Free Trade Zone and the Lingang New Area. Currently, some enterprises within these zones that have used the negative list have seen significant improvements in the efficiency of cross-border data flow, reduced compliance costs, and reported positive experiences. However, enterprises outside the Pilot Free Trade Zone cannot enjoy this policy, leading many multinational companies and enterprises expanding overseas to voice their demands.
This “Construction Plan” clarifies that linkage innovation zones can orderly promote cross-border data flow. It allows financial institutions to transmit data necessary for daily operations, as recognized by financial regulatory authorities, overseas. It also optimizes the management of cross-border flow of scientific research data, exploring the establishment of systems and standard specifications for the transaction, circulation, cross-border transmission, and security protection of scientific research data.
Another example is that the implementation plan for the comprehensive reform pilot in Pudong already stipulates providing long-term, /exit valid F (visit) or M (trade) visa便利 for foreigners invited to Shanghai for important scientific research, investment, and economic and trade activities. This便利 measure has already been implemented. However, enterprises in districts with a high concentration of foreign companies, such as Changning District and Songjiang District, have also raised demands, hoping to enjoy the policy便利. After comprehensive assessment, this “Construction Plan” clearly states “support for key enterprises to introduce foreign talents in high-tech fields, foreign skilled talents, and foreign talents aligned with the industrial development direction of each district, applying for work-type residence permits valid for up to five years,” allowing more linkage innovation zones to share the policy dividends.
Independent Reform, Bold Experimentation
The “one district, one plan” approach of the first batch of linkage innovation zones previously attracted attention. This “Construction Plan” similarly focuses on regional characteristics, encouraging each linkage innovation zone, based on its own needs and features, to carry out differentiated and personalized independent reform explorations when replicating and promoting innovative practices.
For instance, the Hongqiao International Central Business District, included as one of the linkage innovation zones this year, focuses on developing the cross-border e-commerce industry. It will support pilot programs for the digital supervision of cross-border e-commerce enterprises, support the relocation of Shanghai Customs Technical Center functions to Hongqiao, and establish a comprehensive customs technical service point.
Another example is the Shanghai International Tourism and Resort Zone, also one of the second batch of linkage innovation zones. This area focuses on creating new tourism consumption scenarios, supporting leading domestic and international brands in opening high-energy flagship stores within the resort, exploring the establishment of bonded exhibition halls for culture and art, and actively promoting the multi-purpose prepaid Shanghai Pass.
Furthermore, each district will also focus on its respective advantageous industries to carry out innovative independent reforms. Jing’an focuses on building a demonstration zone for an international consumption center city; Changning focuses on developing the platform economy; Putuo focuses on aggregating productive internet service platforms; Qingpu focuses on developing “Big Digital, Big Health, Big Commerce”; Jiading focuses on promoting the development of the intelligent connected new energy vehicle industry; Jinshan focuses on developing new chemical materials.
Hou Hualong explained that after years of development, the industrial foundations of each district have gradually improved, and they are accelerating the creation of new industrial forms with distinct characteristics. This “Construction Plan” also responds to the differentiated development needs of each district, exploring more industrial formats and broader economic carriers to better achieve “spatial connection, industrial continuity, and policy relay” between the linkage zones and the Pilot Free Trade Zone.
