Introduction and Objectives: China established its first bonded zone, the Shenzhen Special Economic Zone, in 1979. Since then, bonded zones have been established in various cities and regions across the country. The primary objectives of bonded zones are to promote export-oriented industries, attract foreign direct investment (FDI), boost technological innovation, and facilitate trade and logistics.

Tax Incentives and Customs Benefits: One of the key features of China's bonded zones is the favorable tax and customs treatment they offer. Companies operating within these zones enjoy tax incentives, such as exemptions or reductions in value-added tax (VAT), corporate income tax, and customs duties. These benefits aim to attract both domestic and foreign enterprises, promote international trade, and enhance competitiveness.

Trade Facilitation and Logistics: Bonded zones in China serve as vital hubs for trade facilitation and logistics. They provide streamlined customs procedures, efficient transportation networks, and integrated logistics services to facilitate the movement of goods. This includes services like warehousing, packaging, labeling, and distribution, enabling companies to optimize their supply chains and reduce costs.

Manufacturing and Processing Activities: Bonded zones in China encourage manufacturing and processing activities by offering a range of benefits. Companies can import raw materials, components, or semi-finished products duty-free or at reduced rates for further processing or value addition within the zones. This arrangement promotes the development of export-oriented industries, encourages foreign investment in manufacturing, and fosters technology transfer.

Export Processing Zones (EPZs): Some bonded zones in China are designated as Export Processing Zones (EPZs). These zones focus on export-oriented manufacturing and provide infrastructure, logistics, and support services tailored to export industries. EPZs offer a favorable business environment, streamlined customs procedures, and preferential policies to enhance the competitiveness of export-oriented companies.

Innovation and High-Tech Zones: China has also established bonded zones that specifically target innovation and high-tech industries. These zones aim to attract technology-intensive companies, promote research and development activities, and foster collaboration between enterprises, research institutions, and universities. They offer preferential policies for intellectual property protection, technology transfer, and investment in research and development.

Free Trade Zones (FTZs): China's policy on bonded zones also includes the establishment of Free Trade Zones (FTZs). FTZs are areas where specific trade and investment liberalization measures are implemented to promote international trade and economic openness. These zones typically offer further policy incentives and greater flexibility in areas such as investment regulations, financial services, and cross-border e-commerce.

Regional Development and Pilot Zones: China has designated certain bonded zones as regional development or pilot zones to drive economic growth in specific regions or test new policies. These zones serve as laboratories for economic experimentation, policy innovation, and market-oriented reforms. They provide opportunities for testing new business models, regulatory frameworks, and industry-specific policies before potential nationwide implementation.

Compliance and Regulation: While bonded zones offer various incentives, they are subject to regulatory oversight to ensure compliance with trade, customs, and tax regulations. The Chinese government closely monitors activities within bonded zones to prevent abuse, smuggling, or illegal trade practices. Companies operating in these zones must adhere to the relevant laws, regulations, and reporting requirements.

Future Development: China continues to expand and upgrade its bonded zones to adapt to changing economic circumstances and global trade