China's New FTZs Expected to Minimize Trade War Damage

China’s six new pilot free-trade zones will increase trade and market access for foreign countries and companies, minimizing strain caused by its trade war with the U.S., according to a Sept. 10 post from Dezan Shira & Associates.

The trade zones -- recently announced in Jiangsu, Shandong, Hebei, Heilongjiang, Guanxi and Yunnan provinces -- are all located in border or coastal regions and will act as “major gateways for trade and investment flows” with Russia, Japan, South Korea and Vietnam, the post said. The move is an attempt by China to “strengthen its underdeveloped provincial economies … to offset the impact of current trade tensions,” the post said.

U.S. tariffs on Chinese goods have forced tech manufacturers to move to Southeast Asia and caused China to look “for more reliable alternate trade partners,” Dezan Shira said. The FTZs are expected to help China with this. “The new pilot zones will open new channels of trade and investment with China’s larger neighborhood, hopefully taking away some of the heat from its deteriorating relations with the US,” the post said.