By Ding Qingfen (China Daily)
Updated: 2008-01-07 15:05

　　

The recent operational kick-off of the Tianjin Dongjiang Bonded Harbor Area, China's largest free trade harbor, has boosted the city's drive to become North China's shipping center.

On December 11, the first phase of the bonded harbor area, which covers an area of 4 sq km, came into commercial operation. It includes warehouses, container terminals and processing and logistics zones, and involves an investment of 6.6 billion yuan ($906.59 million).

The rest of the 6-sq-km area is under development and is due to be operational by 2010.

"The harbor area is sort of an engine that could drive up the regional economy and business in Tianjin, especially the Tianjin Binhai New Area," says Xu Fu, a professor at the Tianjin-based Nankai University.

In 1994, the Tianjin government proposed the idea of the Tianjin Binhai New Area, and the central government eventually approved it as the nation's third regional economy facilitator, after the Shenzhen Special Economic Zone and Pudong New District in Shanghai.

China has pinned high hopes on the Binhai new area, expecting it to help Tianjin grow into an economic powerhouse as well as North China's shipping hub.

"This cannot be realized without free commodity exchange. Dongjiang harbor area provides easier access," says Yu Rumin, chairman of Tianjin Port (Group) Co Ltd, who is also in charge of the construction of Tianjin harbor area.

The Tianjin Port is also aiming high. It is now China's fourth-largest and the sixth-largest worldwide. In 2006, it handled 258 million tons in cargo. It plans to increase its cargo and container handling capacity up to 400 million tons and 12 million standard containers by 2010.

Tianjin Dongjiang Bonded Harbor Area enjoys preferential treatment for taxes, land, foreign exchange and financing, and provides convenient Customs clearance, compared with the other three harbor areas around China - including Shanghai-based Yangshan Bonded Harbor Area, Dayaowan Bonded Harbor Area in Dalian and Yangpu Bonded Harbor Area in Hainan.

The Tianjin harbor area is involved in five major businesses: international transfer, distribution, purchase, transit trade and export processing.

On the horizon

Dongjiang Bonded Harbor Area is located in Dongjiang harbor of Tianjin Port, which includes another three harbors: Beijiang, Nanjiang and Haihe.

In December 2005, the Tianjin municipal government submitted the harbor area's proposal to the State Council and received approval in August 2006.

Tianjin harbor area is China's third approved area, after Yangshan and Dayaowan, and to be followed by Yangpu. The four areas are located in China's north, east, northeast and south.

"In China, the idea of bonded harbor areas comes at an opportune time," Xu says.

The idea of bonded harbor areas is still new in China. It did not come into the spotlight until June 2005, when the Chinese government gave a nod to Yangshan bonded harbor area, the first of its kind in China, covering 8.14 sq kms.

The bonded harbor area plan comes at a time when the tariff-free zones, which China introduced in 1990 to stimulate exports and imports by lowering tariffs and improving efficiencies in distribution, storage and processing, are losing their advantages as a result of accelerated globalization and China's entry into the WTO.

Experts believe that compared to tariff-free zones, bonded harbor areas provide higher quality and more cost-effective services to exporters and importers because harbor areas, as their name suggests, are built much closer to ports. They are also equipped with tariff-free logistics parks, export processing bases and commodity showrooms.

"We are following the practices of internationally well-known ports such as Germany's Port Hamburg and Port Rotterdam in the Netherlands," Yu says.

The government has other ambitions for the bonded harbor areas - improving economic performance in the respective regions.

The Yangshan harbor area aims to help Shanghai grow into an international shipping hub and give a boost to businesses in Yangtze River Delta; the Dayaowan harbor area shoulders the responsibility of bolstering the economy of Northeast China; and the Yangpu harbor area is positioned as the most dynamic shipping hub around Beibu Gulf.

So is the Tianjian harbor area. "The Tianjin Dongjiang Bonded Harbor Area should act as a growth facilitator in the Bohai Rim Economic Region," says Yu.