In China, many are looking to so-called ‘bonded port areas’, as a tool to keep up decades of rapid growth. Lee Cheok Pin, Deputy GM of YCH Group, a Singapore-based logistics company. He is in charge of the firm’s Chinese branch in the northern port city of Tianjin.
Located in the Tianjin Port Free Trade Zone, his company has Dell and Motorola as some of its key manufacturing customers. The special location offers the company many preferential policies.
Lee Cheok Pin said ‘Besides the tax incentive, we work very closely with the free trade zone customs. They’ve granted us an incentive, what we call RFDL, Release First, Declare Later. With these incentive, we can operates 7 days, 24 hours each. And for any material that going out for Motorola, we can sent them out first and follow out with the documentation declarations. And that really helps us in improving our efficiency and effectiveness.’
With all the benefits gained from working in the free trade zone, YCH Group is looking to expand into China’s largest free-trade harbor area – the Tianjin Dongjiang Bonded Port Area — for more favorable policies.
Located in the Binhai New Area in the city, the bonded harbor area offers the most preferential policies in taxation and foreign exchange policies in the country.
The first phase of the area, covering four square kilometers, has started operations. It included warehouses, container terminals, processing and logistic zones. And it involves RMB6.6 billion ($900 million) in corporate investment.
The Dongjiang Bonded Port Area is scheduled to become fully operational by 2010, when the second phase is completed. The whole project will then be able to handle 4 million containers per year.