Ningxia blazes trail for opening-up of western region

Northwest China's Ningxia Hui autonomous region is expecting to get good news from Beijing as early as September, as the region aspires to tap its links with the Muslim world and as the central government continues to open up its landlocked western region to Central and West Asia.

Wang Zhengwei, chairman of the Ningxia Hui autonomous region, said recently that the region's opening-up pilot zone proposal has been approved by the State Council, and opinions are now being sought on the implementation draft.

The idea of setting up Ningxia as an "inland west-looking opening-up pilot zone" was proposed in early 2011 by the regional government. Beijing has since ordered 10 central ministries to conduct feasibility research.

If the proposal can be formally approved by September and secure policy backing, the northwestern autonomous region is likely to take the lead in the opening up of the western inland region, following the coastal and border regions.

Profiting from links

Home to 2.22 million members of the Hui ethnic group, who account for 36 percent of the region's population, Ningxia is not shy about its goal to turn its population's ties with Arab and Muslim countries into economic opportunities.

"There are 1.5 billion Muslims in the world, and Muslim-related trade is worth $2 trillion. But China accounts for only 15 percent of that, and there is huge development potential," Wang said.

Statistics show trade between China and Arab countries climbed from $36.7 billion in 2004 to $195.9 billion in 2011. China is Arab countries' second-largest trading partner, and the latter is China's seventh-largest trading partner.

After successfully holding two China-Arab States Economic and Trade forums, Ningxia has been chosen as the permanent site of the most important platform for China-Arab economic cooperation. The third forum will be held from Sept 13 to 17 in Yinchuan, Ningxia's capital.

Ningxia's ambition is embodied in its avant-garde international conference center, which will serve as the main site of the forum.

It is widely anticipated that in September, the central government's approval of the pilot zone proposal will be presented at the gathering.

During this year's annual session of the National People's Congress, Yuan Jinlin, a senior official form Ningxia, also said that the proposal was "likely" to be approved in September.

To fully implement the strategy and lure investment from Arab countries, securing favorable policies from Beijing is critically important.

But there are still many uncertainties.

"There are many favorable policies for the pilot zone. But the core policies include the 'comprehensive tariff-free zone', and commodity and Islamic product exchanges," Wang said.

Yuan Jingping, director of Yinchuan Inland Port, told China Daily that among these policies, the "comprehensive tariff-free zone" is of utmost importance, as it gave incentives to Arab companies to set up processing factories in Ningxia.

"For Arab companies, especially small and medium-sized ones, tariff exemptions and timely tax rebates are extremely important for them to counter high logistics costs and improve their capital turnover rate," Yuan said.

An official from Ningxia's commerce department confirmed to China Daily the importance of the "comprehensive tariff-free zone".

"Such zones are the most favorable, highest level, and the best-functioning areas for opening-up in China," said the official who declined to be named.

"But the examination and approval process of comprehensive tariff-free zone is very strict," the official said.

To date, there are 22 "comprehensive tariff-free zones" in China, mostly in eastern coastal areas, such as Shanghai, Tianjin and Suzhou, Jiangsu province.

The official expressed hope that the tariff-free zone policy will be implemented in Ningxia by September, but he refused to give a specific date.

"It's up to the central government, not us," the official said.

Despite policy uncertainties, analysts are still optimistic about the gradual opening-up of China's landlocked western region.

Wan Jifei, chairman of the China International Trade Promotion Committee, said the further opening-up of the landlocked western region is inevitable, following the country's opening-up of coastal regions and border areas.

Wang called the opening of China's inland regions the third phase of its opening-up.

(China Daily 07/20/2012 page14)