Two Shanghai export zones upgraded amid further opening-up efforts

Shanghai has upgraded two of its six export processing zones to comprehensive bonded zones in response to the country's latest efforts to further open up and shift its export-oriented development model.

The two zones upgraded on Wednesday, Caohejing and Fengxian, were both established in 2003 when China aimed to attract foreign investment for export-oriented production to promote economic growth. Companies in the zones were entitled to customs exemptions only when they imported raw materials and exported final products outside of China.

With the upgrade, manufacturers within the zones are allowed to take domestic orders, and companies can now expand their businesses to research and development, international procurement and retail, such as cross-border e-commerce, while still enjoying preferential tax policies.

Gao Rongkun, head of Shanghai Customs, said: "We are now opening the doors of the zones to both domestic and international markets."

Both export processing zones and comprehensive bonded zones are among the special regulated areas of customs, and the volume of foreign trade in those special areas in Shanghai reached $187.45 billion in 2018, accounting for 28 percent of the city's total.

The upgrade was part of Shanghai's implementation of the guideline on promoting high-level opening-up and high-quality development for the comprehensive bonded zones, which was issued in January by the State Council.

Gao said among all the 140 specially regulated customs areas across the country, 96 are now comprehensive bonded zones, with 44 left for upgrades in the future. Shanghai is now home to three comprehensive bonded zones. Besides the newly upgraded Caohejing and Fengxiang, the city established its first comprehensive bonded zone in Pudong International Airport in 2010, which became part of the China (Shanghai) Free Trade Zone.

"We will accelerate the process of upgrading for the other four export processing zones in Shanghai," he said, adding that the customs authorities have also created 27 tasks to better implement the guideline and will release more facilitation measures in the bonded areas.

Gu Yi, director of Fengxiang comprehensive bonded zone, said the zone has been focused on bringing in companies in the healthcare and medical equipment industry.

"In the past, the companies could only do manufacturing, but in the future, they can build R&D centers or develop trade and service businesses here," Gu said.