Shanghai fails to offer zero-duty incentives seen as crucial to cargo flows in Lingang free-trade zone
- Operating guide published on Friday fails to mention what import duty policy will be adopted
- Difficult to ensure ‘greatest openness’ at Lingang without exemptions, analyst says
An operating guide containing 50 new rules published by the Shanghai government on Friday failed to mention what import duty policy would be adopted inside the free-trade zone at Lingang, a detail that foreign as well as local businesses were waiting for.
“Goods from abroad entering the fenced customs areas of the new zone, and transactions of goods and services inside the fenced area, will be subject to special taxation policies,” the guide said. The new rules come into effect on September 1.
“In the absence of import duty exemptions, it is difficult to turn Lingang into an economic zone with the greatest openness,” said Eric Han, senior manager with business advisory firm Shanghai Suolei. “It may take some time before the authorities map out a detailed plan to conduct zero tariff policies.”
Local government sources had said earlier that Shanghai was mulling over a plan to impose zero tariffs on imported goods inside the Lingang FTZ, an important step that would lead to greater freedom when it came to cross-border cargo flows.
But officials were wary of the risk that a large volume of duty-free goods inside Lingang would find their way out of the FTZ and be sold in the mainland China market, wreaking havoc on the local and national economies.