An aerial view of the Lin-gang Special Area of China Shanghai Pilot Free Trade Zone. [Photo provided to chinadaily.com.cn]

Shanghai has recently introduced China's first local legislation specifically tailored to govern bonded maintenance practices. The regulations, approved during the 17th session of the Standing Committee of the 16th Shanghai Municipal People's Congress on Nov 28, will take effect on Jan 1, 2025. It is aimed at enhancing the development of bonded maintenance business in the city's Pudong New Area.

Under the ambit of the bonded maintenance policy, enterprises gain the prerogative to transport goods exhibiting damage, functional malfunctions, quality discrepancies and other issues from locations both overseas and within China, outside the comprehensive bonded zone (CBZ) to the CBZ for maintenance in a bonded fashion. Subsequently, these goods can be re-transported to their original destinations.

The procedure for importing goods for bonded maintenance is characterized by its simplicity and operational ease, free from taxation or the need for guarantees. By facilitating bonded maintenance services and other pertinent support, enterprises stand to streamline their operations, integrating seamlessly within the industrial chain at reduced operational and temporal costs.

The regulations are aligned with stringent international economic and trade standards, said Yan Rui, the deputy secretary-general of the Shanghai Municipal People's Congress. The policy not only fosters innovation within the bonded maintenance sector but also ensures a balanced approach to risk mitigation and developmental advancements, Yan added.

Presently, Shanghai boasts 27 authorized enterprises engaged in bonded maintenance, with 11 of these entities situated in Pudong New Area. The first half of 2024 witnessed Shanghai's bonded maintenance business achieve a total import and export value of $14.01 billion, doubling the figures from the corresponding period in the previous year. Notably, Pudong New Area contributed significantly to this achievement, accounting for $9.92 billion, representing a substantial 70.8 percent of the city's total.

Looking ahead, Shanghai's pertinent departments and units are poised to concentrate efforts on steering key sectors, industries and enterprises towards fully leveraging the innovative policies in place, Yan said.