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China Daily Website

Domestic companies flock to register

Updated: 2013-10-18 08:08
By Wei Tian in Shanghai ( China Daily)

CBRE's report suggests that the price hikes have been supported to some extent by irrational demand.

"Most of the demand comes from SMEs that are registered in the FTZ, but which conduct their main businesses elsewhere, so they won't be sending their staff to the zone in the near term," it said.

Chen Weimin, a consultant with the general administration office of the FTZ, said that all companies are welcome to apply. But he added a caveat.

"The principle we follow is that we have a low threshold in terms of admittance, but the companies will all be strictly supervised after they move in," he said.

"We mainly encourage those enterprises that will be able to benefit from the innovative reforms of the pilot zone to apply. If they can do the job just as well elsewhere, then why bother coming to the FTZ?"

Chen said that companies' performances will be charted and analyzed. Those that fail to generate significant revenue, taxes or employment figures would perhaps be less welcome in the future.

Nonetheless, the zone's administration is making an effort to be hospitable and cut as much red tape as possible, he added.

Some 36 companies were approved in the first batch of firms to enter the zone on Sept 29, with 60 more licenses handed out later. These companies all got the green light within four days of submitting their applications, much faster than the usual 20 days.

Kuai Zhenxian, chief economist with Shanghai Waigaoqiao Free Trade Zone Development Co, a major developer of the pilot zone, said the enthusiasm to register also reflects speculative motives by Chinese firms.

To deal with the huge demand, Kuai said that adjustments would be needed to provide more office space in the zone.

He said many of the land slots there were designed for industrial use due to the booming manufacturing sector in the 1990s, but as the FTZ mainly aims to stimulate the service sector, some should be transformed into commercial office space.

He said the FTZ would "inevitably" need to expand, possibly into Lingang, a 315 sq km area in the city's southeast.

 
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