The bonded zone of Qingdao have been given the green light from the State to follow Shanghai to set up pilot zone-port interactive area.

　　Experts say that the move is a prelude to the ultimate goal of setting up free-trade areas. The State Council has recently approved all the 7 applicants to kick off zone-port area pilots. The awarding has eliminated early worries that only two or three applicants would be approved.

　　Qingdao Bonded Zone is among the list of the seven applicants. The other six are in Xiamen Xiangyu, Dalian, Zhangjiagang, Tianjin, Shenzhen and Ningbo. The State's go-ahead follows the successful setting up of Shanghai Waigaoqiao zone-port interactive areas, selected as a pilot late last year and completed as a Zone-Port Interactive Area in April.

　　A zone-port interactive area is a combination of bonded land and a nearby international port. A bonded logistics zone will usually be set up in the port area. The combination will benefit enterprises in the former bonded zone by offering better logistics services, helping solve bottlenecks affecting Qingdao bonded zones.

　　Updated tax rebate mechanisms will also be adopted in the zone-port interactive area. Rebates will be granted on the entry of domestic goods flowing into zone-port areas, rather than the current practice of providing refunds after those goods leave China. This is seen by many investors as one of the zones' biggest attractions. And firms in the zone will be able to enjoy more relaxed foreign exchange controls. Goods circulated within the zone are exempted from value-added taxes and consumption duties. Under these policies, customs clearance will be quickened and delays in goods delivery will be greatly scrapped. This will help firms cut down costs. Foreign-invested companies have hailed the moves, saying they will have more business opportunities when the zone-port interactive area is put into place.

　　All seven applicants have expressed the intention of being developed into free-trade areas. It is reported that the Chinese mainland will have two or three world-class free trade zones by 2015, if the transformation of the bonded zones is successful. The move also aims to inject new incentives into the bonded zones, which have been losing advantages as the nation continuously reduces tariffs and opens up markets as part of its World Trade Organization commitments. Enditem will