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New window for foreign firms

Updated: 2013-10-11 07:46
By Shi Jing and He Wei in Shanghai ( China Daily)

New window for foreign firms

Lower costs and faster turnaround times to be the attractive lures

Finland's Almaco Group is looking forward to tax exemptions and other benefits as one of the first batch of 25 companies to obtain a license to set up a branch in the China (Shanghai) Pilot Free Trade Zone, which officially opened on Sept 29.

New window for foreign firms

An aerial view of the container terminal of the Waigaoqiao Free Trade Zone in the China (Shanghai) Pilot Free Trade Zone. Chen Fei / Xinhua

It took the group, which provides products and services for cruise ships, offshore units and other accommodation vessels from Finland, three weeks to receive the license after submitting all the necessary documents. Outside the FTZ, the same process usually takes about two months on the mainland.

Tang Dongliang, director of Almaco China, said that he relishes the prospect of cutting costs. The company has a quick turnaround time from importing parts and materials to shipping them overseas, but it still has to contend with import tariffs of 20 to 30 percent.

"But with a branch in the FTZ, theoretically speaking we will have all these tariffs waived," said Tang.

The FTZ is also adopting a new policy whereby a series of small imported items can be grouped together as one large item in order to lower the overall import tax and improve efficiency.

Almaco will initially focus on ocean projects, but as the FTZ goes into full swing and the group becomes more deeply embedded in the Chinese market, the group will build luxury cruise ships in China, he added.

"We expect the FTZ to have adopted a mature financing system by the time we embark on such large-scale projects," he said. "We will also, at that stage, be seeking local financing."

Meanwhile, a joint venture between Microsoft and BesTV received the first official license for the FTZ, or registration number 001. Microsoft Corporate Vice-President Ya-Qin Zhang hailed the partnership as helping create the perfect environment in China for the company to transform itself into one that combines equipment and services.

Moody's Analytics economist Alaistair Chan described the FTZ in a recent report as being "another step in China's economic liberalization" and "a symbol of the government's reform priorities."

FedEx Corp, the global courier delivery services, wrote in an e-mail to China Daily that it welcomes the establishment of the FTZ as greater market access and global trade are central components of business and economic growth.

"FedEx has always supported free trade to promote the development of the global economy and trade," it wrote.

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