On 7 December 2023 the State Council issued the Overall Plan for Comprehensive Alignment with High-Standard International Trade Rules and High-Level Institutional Opening of the China (Shanghai) Pilot Free Trade Zone (Guo Fa [2023] No. 23). The document was signed on 26 November and published on 7 December.
Its focus is not tax incentives but rule alignment. It translates issues from high-standard international trade rules into concrete pilot tasks for Shanghai, covering goods trade, services trade, digital trade, intellectual property, government procurement and behind-the-border measures.
Digital trade is a priority
The plan addresses digital trade in some depth, including cross-border data flows, electronic documents, digital identity, online transactions and consumer protection. For digital businesses, these arrangements may change the paths and costs of data export.
A distinction must be drawn between institutional exploration and general application. FTZ pilots usually apply first to specific areas, scenarios or enterprises before being replicated. Companies should not assume that every data export becomes eligible because the plan mentions facilitation.
Three questions on cross-border data
First, data type. Personal information, important data and ordinary data follow different export paths. Important data generally requires stricter security assessment.
Second, scenario. Cross-border shopping, payment, logistics and after-sales involve different data flows, purposes and legal bases.
Third, path. Security assessment, standard contracts and certification each have conditions. Companies should combine path selection with data type, volume and recipient.
Intellectual property and procurement
The plan strengthens IP protection, including trade secrets, trademarks, geographical indications and enforcement cooperation. On government procurement, it emphasises fair competition and transparency. For foreign-invested enterprises participating in FTZ projects, these rules affect bidding eligibility, evaluation criteria and remedies.
Companies should check whether qualification conditions in procurement documents match the plan, whether IP ownership and licensing clauses are clear, and whether dispute-resolution mechanisms are available.
Practical recommendations
First, determine whether the business falls within the FTZ. Registered address, actual operations, data storage and place of business may all affect application.
Second, build a data map: sources, storage locations, recipients, transfer paths and purposes, then assess whether export is involved.
Third, review contracts. Cross-border service agreements should specify data-use scope, restrictions on onward transfer, security-incident notification and liability allocation.
Fourth, use the pilot without depending on it. Institutional opening is replicated over time, but compliance cannot rest on an assumption that a pilot “may apply”.
For foreign investment and multi-jurisdiction structuring, see our multi-jurisdiction service; for data export path analysis, see data compliance; for trademarks, trade secrets and licensing, see intellectual property.
This article is based on the Overall Plan issued by the State Council on 7 December 2023 for the Shanghai Pilot Free Trade Zone. It is for reference only and does not constitute legal advice.