Implementation Opinions of the Ministry of Transport and the Shanghai Municipal People’s Government on Implementing the Framework Plan for the China (Shanghai) Pilot Free Trade Zone and Accelerating the Construction of the Shanghai International Shipping Center
The English version is for reference only. If there is any inconsistency or conflict between the English and Chinese version, the Chinese version shall prevail.
No. 584  of the Ministry of Transport
All entities concerned:
In order to thoroughly implement the Framework Plan for the China (Shanghai) Pilot Free Trade Zone issued by the State Council and further accelerate the construction of the Shanghai International Shipping Center, the Ministry of Transport and the Shanghai Municipal People’s Government have jointly developed these Implementation Opinions.
I. Overall Requirements
Promoting the construction of the China (Shanghai) Pilot Free Trade Zone (“FTZ”) and Shanghai International Shipping Center is a strategic requirement and task of China. The construction of the FTZ serves as an opportunity for the accelerated construction of the Shanghai International Shipping Center, the further deepening of reform, and the expansion of opening-up. By adherence to implementation of pilot programs, the content of the comprehensive FTZ for international shipping development will be enriched and expanded. Through two to three years of pilot reform, internationally competitive shipping development systems and modes will be explored and innovated, and replicable and widely applicable experience will be formed, to maximize the positive and exemplary role of the FTZ in promoting innovation and strongly boost the upgrade and development of the Shanghai International Shipping Center.
II. Key Tasks
(I) Enhancing the level of opening-up.
1. Relaxation of shareholding ratio limitations for foreign investment in international vessel transportation. Foreign investors shall be allowed to establish Chinese-Foreign equity joint ventures and Chinese-Foreign contractual joint ventures in the FZT to engage in international vessel transportation business with an investment ratio greater than 49%. Foreign investors’ capital contribution to a vessel registrant shall be allowed to exceed 50%, and ship-owners may register their ships in accordance with relevant laws and regulations and other relevant provisions. Such measures shall apply, by reference, to investors from Hong Kong, Macao or Taiwan. Relevant pilot administrative measures shall be formulated separately.
2. Permission for foreign investors to establish wholly foreign-owned enterprises to engage in international vessel management business. Foreign investors may form wholly foreign-owned enterprises in the FZT to engage in international vessel management business. Such measures shall apply, by reference, to investors from Hong Kong, Macao or Taiwan. Relevant pilot administrative measures shall be formulated separately.
3. Effective integration with expansion of opening-up in finance, trade, and other fields. Opening-up policies and innovative measures of the FZT in finance, trade, and other areas shall be fully utilized to achieve the integrated and innovative development of relevant industries, and focus shall be placed on the development of shipping finance, insurance, trading, consultation, maritime arbitration, port logistics, and other modern shipping service industries.
4. Exploration of the administrative mode of the "Negative List” for the access of foreign investment in the FZT in the shipping field to further expand the opening-up of the shipping service industry. Measures for making policy and system innovations in the shipping field shall continue to be explored, and the role of the Shanghai International Shipping Center in implementing pilot programs shall be maximized to further raise the integrated competitiveness of the Shanghai International Shipping Center.
(II) Innovative Shipping Policies.
5. Innovation in the interactive mechanism for multiple ports The interactive role of Waigaoqiao Port, Yangshan Deepwater Port, and Pudong International Hub Port shall be positively utilized to explore and form internationally competitive shipping development rules and modes of operation.
6. Implementation of pilot policy on coastal carriage. The development of transit and LCL (less than container load) business shall be promoted, and international vessels not flying a five-star flag which are owned or controlled by Chinese-invested shipping companies shall be allowed to engage in the coastal carriage of foreign trade import and export containers between domestic open ports and Shanghai Port (with Shanghai Port as the transit port) on a trial basis.
7. Innovation in the international ship registration system. The FTZ shall maximize the regional advantages of Shanghai, and using preferential tax policies for Chinese-funded ships flying a “flag of convenience” to encourage qualified ships to register in Shanghai. The FZT shall maximize the regional advantages of Shanghai, and use the preferential tax policies for Chinese-invested ships flying a “flag of convenience” to encourage qualified ships to register in Shanghai. On the basis of the “China Yangshan Port” ship registration policy, a convenient and efficient international ship registration system shall be studied, promoted, established, and implemented. The international shipping business licensing procedures shall be simplified. Registrant, vessel age range, and other conditions for registration shall be relaxed. Crewing, type of registration, registration fees, vessel’s navigation areas, and other contents of registration shall be improved. Registration processes related to ship operation, inspection, and registration shall be optimized to promote the registration of qualified ships in Shanghai.
8. Support for expansion of the scope of pilot tax rebate policy at the port of departure. On the basis of existing pilot ports and transportation enterprises, more ports and transportation enterprises with initiative and good reputations shall be covered by the pilot program to widen the polity effect, maximize the role of the Yangtze River as a golden waterway, and increase the reach of service capacity of Shanghai Port.
(III) Expanding Functions of the Center.
9. Acceleration of the development of international shipping trade. The development of the shipping freight index derivatives trading business shall be accelerated. The development of trading of shipping freight index derivatives shall be accelerated. Regulatory rules shall be improved to prevent financial risks in shipping and strengthen forward freight regulation. Shanghai shall be supported in the compilation and issuance of freight indices for import of dry bulk cargo, crude oil, and other bulk cargo. A statistical reporting system for vessel trading information shall be developed, and establishment of a vessel trading information platform in Shanghai shall be supported to provide vessel trading information services.
10. Improvement of shipping development funds. Support shall be provided for establishment of shipping development equity funds featuring a combination of market guidance and government promotion. Promoters shall be allowed to establish equity fund companies. Support shall be provided for the use of shipping development equity funds in combination with relevant ship demolition funds, shipping franchises, and other policies, focusing on the structural adjustment of transport capacity, separation of ownership and operating rights, development in both size and specialization of shipping enterprises, and other areas.
11. Acceleration of the development of human resources, education, and scientific research in the shipping field. The development of the Shanghai Advanced Institute of International Shipping shall be supported to establish an international, open, and service-oriented training base for high-end shipping personnel. Support shall be provided for the construction and development of the Shanghai International Shipping Research Center and the Shanghai International Shipping Information Center to form internationally influential shipping consultation institutions. Relevant research by the Office of Shanghai Combination Port Management Committee and the Development Association of Shanghai International Shipping Center shall be supported.
(IV) Raising Service Levels.
12. Acceleration of the construction of a modern shipping service function platform. Shipping finance, international vessel transportation, international vessel management, international shipping brokerage, international vessel leasing, international crew management, and other industries shall be actively developed. Relevant promotion policies shall be studied. Establishment of a long-acting promotion mechanism shall be explored. Concentration of vessel elements shall be encouraged to drive the growth of shipping information, vessel financing, vessel insurance, maritime arbitration, and other shipping service industries and to strengthen the integrated service functions of the Shanghai shipping market.
13. Encouragement of the development of the cruise ship industry and economy. Establishment of a cruise ship development fund shall be supported to promote the development of China’s cruise fleet and drive the growth of shipping finance and insurance industries. Support shall be provided for Chinese-invested cruise ships flying a “flag of convenience” to engage in approved cruise ship transportation from coastal areas of the mainland to Hong Kong, Macao or Taiwan. Leased foreign cruise ships shall be allowed to engage in approved multiple-voyage cross-strait cruise ship business. Chinese-invested cruise ships flying a “flag of convenience” shall be encouraged to engage in cruise transportation business involving four destinations across the straits with Shanghai as the home port. Construction of a cruise home port in Shanghai shall be supported, and establishment of cruise companies in the form of a Chinese-foreign equity joint venture in Shanghai shall be encouraged to expand the cruise ship business.
14. Consolidation of “soft power” and enhancement of international influence Innovations in systems and mechanisms shall be explored, coordination with relevant policies shall be strengthened, a solid groundwork shall be laid, and focus shall be placed on improving the abilities and levels of the Shanghai International Shipping Center in developing international shipping rules and standards, regulating markets, and providing consultation services, among others, to boost influence on the international market. International and domestic shipping organizations and relevant associations, service institutions, and platforms shall be encouraged to relocate to Shanghai. The upgrade of the China Maritime Museum in Shanghai shall be supported, and artifacts collection, cultural exchange, and other work shall be conducted.
(V) Strengthening Infrastructure Construction.
15. Active and methodical advancement of the construction of port infrastructure. Construction of the phase-four Yangshan Deepwater Port project shall be accelerated to meet the increasing traffic demand of Yangshan Port. The preliminary work and construction of infrastructure for railway (such as Shanghai-Nantong railway and Shanghai-Zhapu railway) and inland river container transportation shall be accelerated. Sea-rail transport, water-water transfer, and other transportation abilities of Shanghai Port shall be boosted. Construction of berths along the Yangtze River and its tributaries shall be methodically boosted to alleviate the structural contradictions concerning berths at Shanghai Port and to optimize the configuration of port functions. The comprehensive utilization of dredged soil in deepwater channels in the Yangtze River estuary shall be strengthened to better serve the development of the Shanghai International Shipping Center.
16. Guidance of the optimization of the port transport structure and functions. Advantages of inland water transport and transport on the Yangtze River shall be maximized. Construction of a comprehensive transportation system shall be promoted. Interaction between Waigaoqiao Port and Yangshan Port shall be strengthened. Both the scale and the efficiency of water transport shall be enhanced, and the proportion of water-water transfers at port shall be increased to promote the sustainable development of Shanghai Port. Support shall be provided for research on vessel type standards, management standards, and fee standards for non-stop river and sea transportation to reduce the costs of such transportation and encourage the wide application of vessels for non-stop river and sea transportation.
17. Acceleration of the development of safe and green shipping. Safe sea areas shall be established, focusing on improving the rescue capability for life, property, and environment at sea and the vessel pollution prevention and control abilities of Shanghai Port area and neighboring waters. Construction of anti-collision facilities for important bridges in navigable waters shall be strengthened to ensure that important channels are safe and unimpeded. “Sunlight pilotage” shall be elaborately organized and implemented to gradually remove compulsory pilotage for domestic trade vessels traveling from the sea to the river. Relevant technical specifications and standards shall be developed and improved to jointly promote the wide application of LNG-fueled inland vessels.
18. Strengthening and improvement of regulatory mechanisms for the international ocean shipping market The Shanghai Shipping Exchange shall be authorized to accept applications for freight recordation of container liner companies and non-vessel operating common carriers in international, domestic, or cross-straits shipping markets, and assist relevant departments in inspecting and overseeing freight recordation. Associations of ship-owners, ports, and other industries shall further play their self-regulatory roles.
III. Organizational Guarantee
All relevant departments of the Ministry of Transport and the Shanghai Municipal People’s Government shall closely cooperate with and support each other according to their respective functions to form a joint force to effectively implement the international shipping policies in the Framework Plan for the China (Shanghai) Pilot Free Trade Zone. All relevant departments shall develop specific implementation plans in a timely manner according to the goals and tasks determined in these Implementation Opinions and in light of the actual circumstances, and ensure the fulfillment of all tasks and goals.
The Water Transport Bureau of the Ministry of Transport and the Shanghai Urban Construction and Transport Commission shall take the lead in communication for relevant tasks, track and research new situations and new problems arising from policy implementation, and effectively conduct work on communication and progress of tasks.
Ministry of Transport of the People’s Republic of China Shanghai Municipal People’s Government
September 27, 2013
Provided by Lawyers Working Committee of Pudong New Area.