First bonded area on border may boost trade

Chongzuo, a southwest prefecture in Guangxi Zhuang autonomous region, is attempting to raise its importance as a cross-border trading post between China and the Association of Southeast Asian Nations (ASEAN) with a new bonded area.

Chongzuo, established in 2003, has a 345-kilometer border with Vietnam, longer than any other prefecture in the region. Chongzuo city's downtown is just 250 km from Hanoi, Vietnam's capital, and the two are connected by direct expressway and railway.

Bilateral trade between the ASEAN and Guangxi increased 37.1 percent year-on-year to $3.99 billion in 2008. Chongzuo's export and import volume increased 72.55 percent year-on-year to $1.6 billion ($1.1 billion, 82.5 percent of it with Vietnam) in 2008, the most of any Guangxi prefecture for the fifth consecutive year.

Chongzuo held an investment invitation fair in Beijing on March 8 for its Pingxiang Bonded Area, which was approved by the State Council, China's Cabinet, in December last year.

The 8.5 sq km bonded area in Pingxiang, a southwest county just across from Vietnam's Dong Dang Economic Development Zone, is China's first bonded area in a border region.

"The Pingxiang Bonded Area will help Chongzuo promoting border business in the China-ASEAN Free Trade Area," said Cui Zhiyou, secretary of the municipal Party committee.

"Pingxiang Bonded Area will also spur development of sucrose-making and manganese ore mining in Chongzuo," said Wu Xingqi, vice-director of the prefecture's municipal Policy Research Department.

Chongzuo is China's largest manganese ore producer and sugarcane grower. The prefecture produced 2.61 million tons of sucrose in 2008, accounting for 20 percent of the country's total. It has 149 million tons of verified manganese ore reverses, also about 20 percent of the country's total.

The bonded area will be built in three phases, staring in 2010 and will cost 1.41 billion yuan. The money will come from a combination of government funds, private investment and banks loans, said Jiang Liansheng, deputy mayor of Chongzuo.

The area's first phase covers 311 hectares and involves 16 infrastructure construction projects, according to Jiang.

"There are a lot of good business opportunities in the bonded area. Our government will offer favorable policies such as tax cuts and simplified procedures and the Ministry of Finance raised the exemption on border trade from 3,000 yuan to 8,000 yuan per person per day last November," said Jiang.

Chongzuo had previously bolstered its border trading center status by starting to develop the Pingxiang Logistics Park (which will have a 6 million ton handling capacity when finished in 2012).

(China Daily 03/30/2009 page5)