A free trade zone is a customs-protected tariff-exempt area without trade restrictions within the territory of a country. It is a form of the highest degree of openness in the world's economic free zones, and its basic features can be summarized as: "national behavior, internal and external customs, outstanding functions, and a high degree of freedom". A free trade zone is a breakthrough in tariffs, import and export licenses and quotas and an area where special customs administration applies, and is in fact a tariff-isolated zone that adopts the policy of a free port.
Domestic bonded area to be with the international "convergence" Foreign special development zones and economic zones have a variety of names: bonded warehouse zone, free zone, foreign trade zone, export processing zone, free trade zone and free port area, but with the name of the bonded area. Bonded zone is a term created by China itself with Chinese characteristics. Generally used "Free TradeZone", abbreviated as FTZ to express, translated back into Chinese as "Free Trade Zone". Some people also use "Bonded Zone" to translate it directly. But no matter what foreign name is used, it usually refers to an open area similar to the international export processing zones and free trade zones within the national border and outside the customs border. In the free trade zone tariffs are completely free of charge, and people, goods and funds outside the national border are free to enter or leave the free trade zone. However, the products of non-free trade zones are regarded as exports when they enter the free trade zones, and the products of free trade zones are regarded as imports when they enter the non-free trade zones. The bonded zone is fully closed and segregated management, and set up perfect segregation facilities. But as Jack North said, "China's bonded zones are not free trade zones in the full sense of the word. Trading enterprises that invest and register in the zones do not have the right to export and cannot register with Customs. Trade enterprises purchasing goods from abroad therefore have the problem of multiple agents, which increases the transaction costs of enterprises in the zone. Many foreign trade enterprises in bonded zones are in trouble because this problem has not been well solved." He further pointed out that although all China's bonded zones have taken some measures, they have achieved little. The complicated and difficult to operate export tax rebate procedures are not conducive to export processing enterprises to purchase domestic raw materials, so that the original purpose of the establishment of the bonded zone - the expansion of exports can not be well realized, and the stimulus effect on the current Chinese economy is also very limited. Internationally, the regional characteristics of free trade zones are recognized as "inside the customs territory", that is, "refers to a part of the territory of a country, in this part of the territory of any goods imported in terms of import duties and other taxes, is considered outside the customs territory, and exempted from the implementation of the customary customs supervision system. " (Kyoto Convention, F.1. Annex on Free Zones) However, China's bonded zones have been largely treated as "within customs" zones. For example, enterprises in the zones are not allowed to open foreign exchange accounts outside the zones; foreign-funded enterprises in the zones are not allowed to set up branches outside the zones; more and more departments are interfering with the bonded zones, and the management of the zones is becoming more and more stringent, ignoring the fact that the bonded zones are the advanced experimental zones for reform and opening up, and applying in a simplistic manner the management methods applicable to non-bonded zones. Especially since September 1998, China's State Administration of Foreign Exchange (SAFE) has made substantial adjustments to the foreign exchange management policies of bonded zones, resulting in difficulties for enterprises in bonded zones in the payment of foreign exchange for imports and the settlement of foreign exchange for exports, affecting the normal business operations in bonded zones.Gabriela Armstrong, in her examination of the management of China's fifteen bonded zones and her contact with some officials of the various bonded zones, pointed out, in particular, that China's current use of goods supervision inbound and outbound management and inbound and outbound zone management has the problem of double management, and two inspections affect the efficiency of customs clearance. Compared with foreign free trade zones, China's 15 free trade zones have not only the necessary administrative authorities, but also numerous organizations that have nothing to do with the business of the free trade zones. Moreover, due to sectoral interests, the administrative authorities of the free trade zones are not "autonomous" on some issues within the zones and have to take orders from departments outside the zones. This is contrary to the principle of "small government" under the free trade system, and is even more different from the international practice of bonded zones. Most of the free trade zones in the world that have done well are connected with ports, and generally have integrated port and area management, with the port as the carrier. The reason is that the functions of free trade zones such as re-export trade, export processing, warehousing in free trade zones and international trade all need to be based on the functions of ports. Only by implementing the integrated operation of port area and enhancing the aggregation and diffusion capacity of goods, capital and information can the functions of bonded zones have great development and better play the role of driving and radiation of bonded zones. China's bonded zones are adjacent to ports but do not include ports. This has become a "bottleneck" for the further development of the functions of bonded zones, which makes the entry and exit of goods not smooth, the management of which is cumbersome and repetitive, the expenses increase, the functions are difficult to be developed, and the economy is difficult to be active. The unification of zones and ports will inevitably apply the policies and management of bonded zones to the operation of ports, which will inevitably increase the openness and freedom of ports and drive the development of port industries. For example, the development of port industries such as port operations, transportation, warehousing, international trade, export processing, packaging and import and export finance. The integration of zones and ports is also necessary to reduce costs and improve efficiency. In addition, domestic bonded zones lack national laws to regulate their operation. Since there is no national unified regulations, each place has successively issued its own local regulations. China's 15 free trade zones have 10 of their own local laws and regulations or local government documents, but the content of the regulations are "according to the place" or even "according to the district" is different. Like Shenzhen's three bonded zones are practicing three different policies. Multiple governments and multiple administrations are naturally detrimental to the synergistic development of bonded zones. Free trade zones will also exist for a long time Michael Gillis believes that: the most prominent advantages of free trade zones are freedom, convenience, access and management mode of the "first line of liberalization, the second line of control, the freedom of the region. It is a product of trade liberalization and will exist for a long time with the deepening of global economic integration. Since 450 years ago, the world's first free trade zone was born, according to incomplete statistics, the world has more than 1,200 free trade zones. And the world to set up the most free trade zones in the country is not someone else, it is the world's most developed country - the United States, which a **** have 655 free trade zones. And now it is also sparing no effort to promote the establishment of the world's largest free trade zone, the Free Trade Area of the Americas (FTAA). The countries and regions of East Asia are among the most densely populated free trade zones in the world, thanks to the active development of outward-oriented economies in recent decades. The main advantage of the free trade zone is its fast customs clearance efficiency, so some countries do not even have customs in the free trade zone. Although the products of free trade zones can enter the local market after paying taxes, many foreign enterprises have to settle down in free trade zones due to the restrictions of the principle of origin. This shows that free trade zones also play a role in helping to attract foreign direct investment and introduce advanced technology and management styles. Although the integration of the world economy is deepening, the conflict of national and ethnic interests triggered by the distribution of benefits is also escalating. This is evidenced by the frequent trade wars that have occurred in recent years. This makes it impossible to realize the "commonwealth" of the global economy in one or two years, one or two decades, or even 100 years, and the tariff barriers between countries will not be abolished. Take the European Union as an example, its tariffs within the zone have not been reduced to zero, and tariffs are even higher when interacting with economic entities outside the zone. This shows that there is still a need for the bonded zones to exist for a long time and have a strong vitality. Donald H. Perkins said: "After joining the WTO, China's tariff level should of course be operated according to the requirements of the World Trade Organization, but this is a gradual advancement process, which requires a certain period of time, and this buffer time provides conditions for the existence and development of bonded zones. Moreover, the functional role of bonded zones varies with the level of economic development of the bonded zones and the overall development objectives undertaken on this basis. China's early experimental bonded zones mostly undertake bonded and warehousing business, while re-export trade and processing trade are continuously developed with the growth of bonded zones. From the viewpoint of domestic and foreign practice, bonded zones also have different functions at different times. Therefore there is no need to worry that free trade zones will die out in a few decades." Dwight R. Snodgras added: "The recent Sino-US military aircraft collision has led to sudden tension between the two countries, coupled with the hard-line policy pursued by the US Bush administration since it came to power, making it possible for China to strengthen the development of bonded zones in the coming period on the one hand; and on the other hand, reduce the concessions made to the United States because of exchanging support for its accession to the World Trade Organization (WTO). " WTO accession, the domestic free trade zone where to go Dominick Williamson, Harper Collins University Professor that: China's free trade zone to open up new horizons, the second venture, it should be the first to accurately characterize the positioning. It is necessary to refer to the WTO to formulate the relevant principles, position the development mode as a free trade zone operating according to international practice, and change the characterization from the current "within the territory" to "within the territory and outside the territory". As the tariff difference between inside and outside the bonded zones will be greatly reduced after China's accession to the WTO, he believes that there is no need for general trade within the zones in the future. In the future, the free trade zone should be the main body, with processing trade (manufacturing center) and logistics distribution (logistics center) as the two wings, and finance (foreign exchange, offshore finance), legal services, and transportation services as the three support systems. In terms of specific measures, the bonded zone must first transform from "within the territory" to "within the territory", and implement the regulatory model of "liberalization of the first line, control of the second line, and freedom within the zone"; the freezing of goods between the bonded zone and the offshore zone should be carried out in a genuine manner; the flow of goods between the bonded zone and the offshore zone should be carried out in a genuine manner. The circulation of goods between bonded zones and overseas countries will be subject to a real record-keeping system; the customs handbook management of goods will be changed to bookkeeping management for enterprises, and goods and articles entering bonded zones from non-bonded zones will be treated as if they were exiting the customs office, and they will be processed for export tax rebates. Enterprises in the bonded zones can act as agents for the import and export business of the "first tier" and "second tier". In addition, it is also necessary to promote the integrated management system of the port area, improve the special channel from the dock to the bonded area and form a three-dimensional multimodal sea, land and air intermodal transportation system; in terms of foreign exchange, it is necessary to deepen the reform of the financial system in the area and implement the policy of free exchange of currencies in the area under the current account. Only through the above actions and measures, together with the three support systems and fast customs clearance, fast operation and e-commerce platform, can the bonded zone basically realize the goal of free trade zone in 2005 and become a distribution center for people, finance, goods and information in the area where the bonded zone is located, and a bright spot to drive the regional economic development. John Salvatore suggested that the geographical distribution of China's bonded zones is not reasonable. Some places are too concentrated in bonded zones, such as six in Guangdong and three in Shenzhen. Some places are blank, such as Guangxi, although there are good ports such as Beihai and Fangcheng, but failed to set up bonded zones. In the future, according to the region according to the function of the existing bonded area to carry out the necessary adjustments to reduce, some can be categorized, expand into a comprehensive bonded area, to play the economies of scale. China's 15 free trade zones can not synchronize the development of free ports or free trade zones, some good foundation, high degree of openness, the vast majority of goods and services have conditions for the implementation of tariff exemptions in the free trade zones should be considered to give the implementation of the free port policy, time to time and differentiate between different categories, and to promote their development to the free port.