Despite lacking oil and gas resources, Zhoushan, the city of mountain and sea, has transformed into one of China’s most promising industrial oil and gas bases, thanks to the establishment of China (Zhejiang) Free Trade Pilot Zone in 2017.
In 2018, the trade volume of Zhoushan oil products reached 221.39 billion yuan ($33 billion). The city’s import and export volume exceeded 110 billion yuan, among which bulk commodities such as oil products accounted for 65 percent. Refined oil, mainly marine bonded fuel oil, became the most exported product in Zhoushan’s foreign trade, increasing by 45 percent year-on-year. The 3.59 million tons of marine bonded fuel oil accounted for more than 30 percent of the national total, making the city one of the top 10 marine bonded fuel oil supply ports in the world.
According to Zhejiang Petrochemical Trading Center, the only professional petrochemical exchange approved by the provincial government in Zhoushan, trade volume accomplished at the exchange in the past three years has reached 27 million tons. The city has established business relationships with 890 customers.
As China’s only free trade pilot zone consisting of both land and anchorage area, Zhejiang Free Trade Pilot Zone has dedicated itself to trade liberalization and investment facilitation of bulk commodities throughout the oil and gas industrial chain. Since its establishment, the zone has initiated 59 innovative policies, among which six were adopted nationwide by the State Council.
The one-stop service reform has significantly increased the efficiency of government institutions at all levels. In only one day, newly started businesses can now be licensed in Zhoushan.
Customs clearance procedures have been simplified. With one standard online declaration system recording relevant information, foreign cargo ships can send their materials for inspection to four institutions: Customs, the Administration of Quality Supervision and Inspection, the Administration of Maritime Safety and the Station of Immigration Inspection. The system was first launched in Zhoushan and helped to reduce the clearance time from 16 hours to about two hours.
Various major policies regarding oil manufacturing and operations have been adopted. The city has given official approval to the first privately owned oil trading company and granted operation licenses to seven international navigation ship bonded oil enterprises．
Some 33 new financial policies have also been implemented. Efforts have been made in promoting RMB fund pool business and cross-border settlement of NRA accounts. In 2018, the amount of cross-border order settlement reached 72.79 billion yuan, accounting for 12.1 percent of the provincial volume. Zhoushan realized return of cross-border capital of 38.69 billion yuan.
With the global trend for sulfur-limitation in the oil and gas industry, Zhoushan is ready to embrace both challenges and opportunities. In Oct 17, 2018, the city hosted the 2018 International Petroleum and Natural Gas Enterprises Conference and launched 10 measures to help to upgrade the business mode of oil manufacturing and trading. The city aims to build a diversified supply system of marine fuel oil and exert its influence in Northeast Asia in the near future.
From January to September 2018, Zhoushan took the lead in implementing a bonded fuel oil blending policy in the country and strove to stand shoulder to shoulder with Singapore in terms of fuel oil refilling policy. The potential market capacity of Zhoushan’s bonded fuel oil is considered to be 14.6 million tons, while the current refilling volume is only 1.82 million tons. Great potential lies ahead for the city in further expanding its market to international level.
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