On September 21, 2020, the State Council announced the overall plan for the Beijing Pilot Free Trade Zone. The China (Beijing) Pilot Free Trade Zone is positioned as a pilot free trade zone with technological innovation, service industry open-up, and digital economy as its main features.

I. Implementation Scope and Functional Division

The implementation area of the Pilot Free Trade Zone is 119.68 square kilometers, which covers three areas: 31.85 square kilometers of science and technology innovation area, 48.34 square kilometers of international business service area (including 5.466 square kilometers of Beijing Tianzhu Comprehensive Bonded Zone), and 39.49 square kilometers of high-end industrial area.

The technological innovation zone focuses on the development of a new generation of information technology, biology and health, science and technology services and other industries, and builds a digital economy pilot zone, a global venture capital center, and a pilot demonstration zone for technological system reform; the international business service zone focuses on the development of digital trade, cultural trade, and convention and exhibition, medical treatment and healthcare, international delivery logistics, cross-border finance and other industries to create a pilot zone for airport economic innovation; high-end industrial areas focus on the development of business services, international finance, cultural creativity, biotechnology and general health industries, and construction of technological achievements conversion host area, strategic emerging industry cluster and international high-end functional organization cluster.

II. Main Tasks and Measures

1.       Promote the liberalization and facilitation of investment and trade

(1)	Fully implement the pre-access national treatment plus negative list management system for foreign investment
(2)	Promote Beijing Capital International Airport and Beijing Daxing International Airport to expand air rights arrangements including fifth freedom rights; carry out cross-border e-commerce retail of imported drug pilot work; moderately relax the management of small-dose special chemical preparations for pharmaceutical research and development; support the establishment of stocking warehouses in the zone; tax exemption for the import of scientific research equipment from R&D institutions in the zone; further expand the function of the import port for vehicles; support the Beijing Tianzhu Comprehensive Bonded Zone to build a comprehensive bonded zone with service trade characteristics.
(3)	Relax restrictions on service trade access to the maximum extent in areas where conditions permit and provide visa convenience for high-end talents such as R&D, practice, exhibition, exchange, and training.

2.       Deepen the open-up and innovation in the financial sector

(1)	Carry out the pilot project of integration of domestic and foreign currencies
(2)	Allow more foreign banks to obtain securities investment fund custody qualifications
(3)	Support the establishment of private banks focusing on supporting the development of cultural and creative industries
(4)	Encourage qualified Chinese banks to develop cross-border financial services
(5)	Support the establishment of domestic and overseas private equity parallel funds through market-based methods in compliance with laws and regulations
(6)	Support multinational companies to establish financial companies in compliance with laws and regulations by establishing qualified investment companies in China
(7)	Carry out one-time registration piolet program of foreign debts of enterprises in the zone
(8)	Allow to conduct cross-border transactions of physical assets, equity transfer, capital increase and share expansion through the Beijing Equity Exchange Center.
(9)	Support auto finance companies in the zone to carry out cross-border financing, and apply for the qualification of insurance agent in accordance with relevant regulations

3.       Promote innovation-driven development.

(1)	Optimize the approval process for work permits and residence permits for foreigners in China
(2)	Establish an intellectual property trading center and prudently and standardly explore and develop intellectual property securitization.
(3)	Carry out the pilot work for foreign patent agencies to establish resident representative offices
(4)	Grant scientific research personnel the right to own or use long-term scientific and technological achievements, and explore the formation of market-based empowerment, achievement evaluation, profit distribution and other systems
(5)	Encourage multinational companies to set up R&D centers and carry out "reverse innovation"
(6)	Promote the transformation of Chinese testing standards into international standards

4.       Innovate the development environment of the digital economy

(1)

Strengthen cross-border data protection regulatory cooperation and promote international mutual recognition of digital certificates and electronic signatures

(2)

Explore the construction of an international information industry and digital trading port; build a digital copyright trading platform to promote the development of intellectual property protection and intellectual property financing businesses; perform efficient and convenient digital import and export inspections on software and internet service trade; explore the establishment of a website filing system that meets the needs of overseas customers; allow financial leasing parent companies and subsidiaries registered in the zone to share the corporate foreign debt quota.

5.       High-quality development of advantageous industries.

(1)	Explore and launch a pilot project for the integration of domestic and foreign currencies in cross-border capital pools; support eligible multinational enterprise groups to conduct centralized adjustment and collection of domestic and foreign currency funds between domestic and foreign members
(2)	Qualified foreign invested enterprises are allowed to carry out global cultural art (non-cultural relics) display, auction, and trading business
(3)	Simplify the approval process for domestic biomedical research and development entities to carry out international cooperative research and development, and accelerate the customs clearance of urgently needed medical devices and R&D materials, reagents and equipment
(4)	Optimize bonded supervision measures for aviation materials and reduce aviation materials operating costs

6.       Explore a new path for coordinated development of Beijing-Tianjin-Hebei.

(1)

Encourage financial institutions to carry out global asset allocation and build a global wealth management center

(2)

Strengthen the financing and cooperation of the technology markets in the Beijing-Tianjin-Hebei region, and retain the high-tech enterprise qualifications for the high-tech enterprises that have migrated as a whole within the valid period;  gradually realize the "same standard for same issues" in government services in Beijing, Tianjin, and Hebei Pilot Free Trade Zones, and promote the realization of the common administration of government service areas, mutual recognition and acceptance of standards, and mutual recognition and acceptance of inspection and testing results; explore the establishment of a joint credit mechanism in Beijing, Tianjin, and Hebei Pilot Free Trade Zones, and improve the Beijing-Tianjin-Hebei integrated credit reporting system.

7.       Speed up the transformation of government functions.

(1)	Promote the reform of "separation of licenses and licenses"; decentralize the approval authority for international express business (agent) business license; carry out the reform of the enterprise investment project "Regional Evaluation + Standard Land + Notification and Commitment System + Government Supporting Services"
(2)	Allow well-known overseas arbitration and dispute resolution institutions to establish business institutions in the region
(3)	Promote a hierarchical and classified supervision system based on credit; further implement the foreign investment security review system, and improve management measures such as anti-monopoly review, industry management, user certification, and behavior auditing

The specific implementation plan and timetable for the construction of the free trade zone are not yet clear, and it is believed that a series of subsequent policies will be released soon. Kaizen will keep a close eye and continue to update the relevant policies of China (Beijing) Pilot Free Trade Zone. Thanks for your attention!