Shanghai’s Jinqiao Comprehensive bonded zone (CBZ) saw trade in 3.9 billion yuan of goods in the first half of the year, 11 percent more than the same period last year.
Photo from Jinqiao Comprehensive Bonded Zone
By FANG Zhuoran
Shanghai’s Jinqiao Comprehensive bonded zone (CBZ) saw trade in 3.9 billion yuan of goods in the first half of the year, 11 percent more than the same period last year.
A comprehensive bonded zone is an area with special trade policies. Jinqiao CBZ started as an export processing zone – companies inside received special tax benefits but the goods they produced had to be exported. Jinqiao was upgraded to a CBZ in 2019, which means a lot more leeway in experimenting with liberal trade terms.
One example of this flexibility is ensuring that no duty is paid on goods imported for R&D purposes. The CBZ has also a list of exemptions for maintenance and leasing. Semiconductor and biomedicine companies committed 1.3 billion yuan of investment to the zone. Anji Microelectronics, a semiconductor materials manufacturer, was one of the first to sign up for the pilot program, which started last year. The company is in the process of moving its whole R&D department to the Jinqiao CBZ.
“We need to buy exactly the same equipment our clients use every time we start work on new products. These machines can cost millions of dollars. Previously that has meant a lot of money was spent on import taxes,” a spokesperson said. “The exemption can potentially save us tens of millions of dollars, money that could be better spent plowed back into our R&D.”
Production and sales have increased this year despite the pandemic. Companies inside Jinqiao CBZ operated in Covid bubbles during the lockdown.
Pudong customs authorities, who oversee the CBZ, took special care in dealing with semiconductor companies and made adjustments to its processes for dealing with businesses facing supply chain difficulties. Advanced Micro had 900 tickets worth US$100 million expedited during the lockdown. Equipment that has tight use-by dates or needs to be protected from dust, humidity and temperature was, expedited - released first and inspected later under normal conditions.
“We were able to continue operating with minimal disruption during the lockdown and even applied to be an authorized economic operator during this time,” said YUAN Dazhe, who oversees logistics at Advanced Micro. Authorized Economic Operators are of low risk and enjoy faster customs clearance.
The CBZ has granted VAT general taxpayer status to many companies. This gives them the right to deduct VAT received from VAT payable. Companies have benefited from expanded online declarations and more flexible declaration procedures. One of these new procedures is a “two-step” declaration process that allows importers to submit information after goods are released.
