What Types of Special Customs Supervision Zones Are There in China?

Contributed by Ms. Zhao Jing, Hylands Law Firm. For more posts about China Customs Affairs, please click here.

There are five types of Special Customs Supervision Zones (SCSZs) in China, including integrated free trade zones, free trade zones, export processing zones, cross-border industrial parks, and bonded port zones.

As of the end of December 2022, there are a total of 168 SCSZs in China.

1. 156 integrated free trade zones

Integrated free trade zones are SCSZs with bonded port functions established in inland areas. In such zones, China Customs implements the tax and foreign exchange policies of bonded port zones.

Such zones integrate the functions of free trade zones, export processing zones, bonded logistics zones and ports, making them suitable for the development of international transit, distribution, procurement, entrepot trade, testing, after-sale service, maintenance and export processing, etc.

They are also China’s special open areas with the highest degree of opening-up, the most preferential policies, the most comprehensive functions and the most simplified procedures.

2. Two bonded port zones

Bonded port zones are SCSZs that have port, logistics, processing or other functions and are established within the port zones opened to the outside by the State and the specific areas adjacent to the said port areas.

The specific functions of bonded port zones include warehousing and logistics; foreign trade; international procurement, distribution and delivery; international transit; inspection and after-sale service and maintenance; commodity exhibition; research and development, processing and manufacturing; port operation and other functions.

3. Eight free trade zones

Free trade zones are at a lower level than integrated free trade zones and are mainly focused on “bonded warehousing, export processing and entrepot trade”. They enjoy the policies of “exemption of certificates, exemption of taxes and bonded operations”.

4. One export processing zone

Export processing zones are special areas designated for manufacturing, processing, or assembling export commodities. All or most of the products manufactured in the zones are for export.

5. One cross-border industrial park

Cross-border industrial parks implement a triple preferential policy of “bonded zones, export tax refund policy for export processing zones and a 24-hour dedicated port for customs clearance”. China Customs handles relevant procedures for goods coming and going within the zone in accordance with the provisions for free trade zones, and adopts a filing system for administration.

Contributor: Zhao Jing

Agency/Firm: Hylands Law Firm

Position/Title: Partner

Photo by Ian Simmonds on Unsplash