The Development Process, Functional Evaluation, and Implications of World Free Trade Zones

By Lu, Xia | World Review of Political Economy, Fall 2014 | Go to article overview

The Development Process, Functional Evaluation, and Implications of World Free Trade Zones


Lu, Xia, World Review of Political Economy


China officially launched a Pilot Free trade Zone (FtZ) in Shanghai on September 29, 2013, taking a solid step forward to boost reforms in the world's second-largest economy. Since then, many discussions and analyses of the connotations, functions, and system design of FtZs have started and are under way. People have high expectations for their role in promoting the deepening of china's economic reform. By November 22, 2013, data on the official website of the china (Shanghai) Pilot FtZ show more than 1400 new companies coming into the zone with a total registered capital of nearly rmB40 billion1 (approximately US$6.6 billion). But as is well known, FtZ management that is "inside the border while outside the customs territory" (i.e., tax exemptions, tax rebates and tax bonds) is not new. there are about 3500 FtZs located in 135 countries, and more than 170 active foreign trade zones (i.e., FtZs) in the USA alone (Bolle and Williams 2013). And more specifically, world-renowned free ports (one type of FtZ) like Singapore and Hong Kong, as well as typically business-based FtZs like dubai in the United Arab Emirates and colon in Panama, are now at the highest level of FtZ, with integrated functions. therefore, the Shanghai Pilot FtZ can learn from these world-renowned FtZs by playing to their strengths and rising above their weaknesses. Only in this way can we ensure the correct path for china's opening up and fundamentally promote its long-term economic development.

1. History and current situation of the World's ftZs

According to the Kyoto convention signed by the International customs council in 1973, a FtZ is defined as follows: it "refers to a part of the territory of a contracting Party where any goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the customs territory." In layman's terms, it means being "inside the border while outside the customs territory," which is fundamentally different from being "inside the border and inside the customs territory" like a bonded zone. In terms of nomenclature, FtZs are also called free ports, foreign trade zones, free zones, free economic zones, export processing zones, and so on in different countries and regions. In fact, the world's FtZs have experienced various forms of evolution and have different characteristics due to differences in geographical location, stage of economic development, and categories of goods and services. So it is necessary for us to investigate their emergence, development, and current situation, so as to fully understand the nature and characteristics of different types of FtZ.

1.1. Free Ports: Starting in Europe, with Transit Trade as Their Main Function

The FtZ was first created for trade facilitation. In 1547, the world's first free port-leghorn (livorno) Free Port appeared in the Gulf of Genoa, northwestern Italy (now tuscany, near Pisa). At that time, the basic functions of free ports were to attract foreign merchant ships and engage in transit trade, that is, to import foreign goods and then re-export them to foreign countries without processing and to provide tariff exemptions for the cargo vessels plying their trade. they mainly played the role of collection and distribution of goods, thus contributing to the economic development of the country or region adjacent to the free port. For example, the second-largest port in Europe, Hamburg, which was founded in 1189, was one of the world's largest transit ports for coffee, cocoa, spices, and carpets. this prototype of free ports in the modern sense mainly provided cargo handling and storage in the transit trade and required relatively little land. But the main advantage of free ports is that the majority of the foreign goods are duty-free, although the types of trading goods are relatively simple.

1.2. Post-War Export Processing Zones, with Attracting Investment and Employment as Their Main Function

After World War II, countries around the world gradually turned their attention to economic development, so the FtZs began to change from focusing on transit trade to attracting investment, creating jobs, and promoting the export of manufactured goods. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Development Process, Functional Evaluation, and Implications of World Free Trade Zones
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.