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China Opens New Free-Trade Harbor Area to Boost ASEAN Trade

November 20, 2008

On November 20, 2008, China opened a fourth bonded harbor located in the Yangpu Economic Development Zone ("YEDZ"), Hainan Province, in a major step toward creating a free trade zone operation with the Association of Southeast Asian Nations ("ASEAN"). The bonded harbor zone will focus on transfer, storage, logistics, processing and trade in energy and raw materials, and will eventually become an ASEAN-oriented business center. The YEDZ will offer tax breaks on imports and rebates on domestic commodities, and exemption for value-added and consumption taxes for inter-company transactions, in addition to preferential policies, which qualified companies such as those registered within the YEDZ or conducting business within the bonded areas may enjoy. This new bonded harbor zone joins the three existing bonded harbor areas in Yangshan of Shanghai, Dongjiang of Tianjin and Dayaowan of Dalian, Liaoning Province. The new free-trade zone will attract more foreign investors, particularly companies involved in trading, shipping and logistics in Southeast Asia.

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