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Microsoft Xbox One lands in China
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MICROSOFT launched its Xbox One gaming console in China yesterday, ending a 14-year ban during the one-year anniversary of the founding of the China (Shanghai) Pilot Free Trade Zone.
The Xbox One, launched in the FTZ, will be the first game console legally available in China since 2000. China set up the FTZ on September 29, last year, as a test bed for economic reforms.
Lured by promises of free trade, greater financial openness and fewer government controls on business activities, some 12,000 firms, including more than 3,000 financial institutions, have been established in the 29-square-kilometer FTZ in the past year, more than the number registered in the past 20 years in an area that now forms part of the FTZ.
Officials with the FTZ’s administrative committee have advertised that companies can obtain licenses to operate in the zone within four days after applying, compared with an average of 29 days elsewhere in China. Foreign firms are also entitled to a speedy process as long as their area of business does not fall on a “negative list” of off-limit industries.
The zone’s import and export volume in the first seven months of this year reached 436.6 billion yuan (US$71 billion), accounting for 27 percent of that in Shanghai, according to Shanghai customs data.
Microsoft was one of the first firms to be granted a license to operate in the zone, along with its Chinese counterpart BesTV New Media Co. But it is not the only company to benefit from the opening-up policies implemented in the FTZ.
John Hu, senior vice president and general manager of US Pharmacopeial Convention China, said his company has benefited substantially from registering in the zone.
“A bottle of chemical agent used to require at least two weeks to travel from a foreign airport to our Shanghai laboratory,” said Hu. “Now it takes only five days, thus cutting import costs by 25 percent.”
According to Shanghai customs, the average time for customs clearance inside the FTZ is 39 percent less than outside the zone, cutting clearance costs for enterprises by 10 percent.
The launch of the international board of the Shanghai Gold Exchange on September 18, which allows foreigners access to China’s tightly controlled gold market, is sending a strong signal on financial reforms in the FTZ.
The annual lending rate is more than 6 percent in China, but enterprises registered in the zone may borrow yuan capital overseas. The Shanghai International Port (Group) Co has raised over 10 billion yuan from overseas at an average annual interest rate of 4.91 percent, saving 180 million yuan in interest expenses, said Chen Xuyuan, the company’s chairman.
More reforms can be expected as China said on Sunday that it will lift curbs on foreign investment for 27 industries ranging from green tea to civil airplane engines in the FTZ.
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