Shanghai Free Trade Zone To Be Launched On Sept 29
Following last month's approval from China's State Council, the country's first pilot free-trade zone (FTZ) in Shanghai will be officially launched on September 29, according to Wang Xinkui, Director of the city's Counselor's Office.
In what is seen as an essential step towards upgrading China's economy through the liberalization of services and trade, with an eventual roll-out nationwide in other chosen areas, Shanghai has built the FTZ around its existing comprehensive bonded zones at Waigaoqiao, Yangshan and Pudong Airport, which are reported to have serviced total trade of more than USD100bn in 2012.
While Wang said that the reforms will be established prudently, the FTZ (or, as it has been more aptly called, the "free-market area") will be more advantageous for financial services, trade and investment. Shanghai will strengthen its role as a foreign exchange settlement center for international trade, together with measures to promote investment through full renminbi capital account convertibility and interest rate liberalization.
Zero customs duties and import taxes will continue to apply to goods transferring between the FTZ and overseas destinations, and domestic merchandise that enters the FTZ is regarded as having been exported, with exporters enjoying an immediate tax rebate.
In addition, there is already an exemption from tax on business income and revenues arising from international shipping, transporting, warehousing, and shipping insurance for companies registered in the FTZ port areas.