CHINA'S 13 bonded zones will be able to retain free-trade privileges despite Beijing's plans to gradually eliminate preferential policies, according to a Guangzhou official.
China's efforts to standardise its trade and taxation policies in preparation for entry into the World Trade Organisation (WTO) do not directly affect the bonded zones, which fall under international regulations.
Guangzhou Free Trade Zone administrative committee director Liu Wenzhe said: 'Miami [in the United States] has a bonded zone and its policies are at least as preferential as China's.
'This is standard international practice.' He said the reduction in China's value-added tax rebate for exports from 17 per cent to 14 per cent, which comes into affect today, would cut into profits for many businesses in the bonded zone.
Widespread abuse of the rebate system had led the State Council to trim the rebate to prevent a drain in state revenues.
Mr Liu would not estimate how much enterprises in the zone would lose because of the reduction in the tax rebate, but he said it would not affect the zone's development.
