China Free Trade Zone, The Function Of Transformation And Development Of Thinking

It has been seventeen years since the first Bonded Area was approved by the State Council and established in China in 1990. The Bonded Area has contributed greatly to the local economy. However, after China's entering WTO, series of clauses and articles are gradually put into practice. As the tariff is generally reduced and the opening up of investment scope is enlarged, the Bonded Area is less attractive to investors than before. In order to enhance the competence of the Bonded Area, fifteen Bonded Areas in China have reconsidered the transition to Free Trade Zones. Meanwhile, experts from home and aboard have done a lot of researches on the transition from different aspects.Shanghai Waigaoqiao Bonded Area was the first one in China, with the biggest development zone, complete facilities, full functions, easy access to international trade, processing for export, warehousing, commodities exhibition, etc. It is an excellent example of the Bonded Areas. Shanghai Waigaoqiao United Development Company (abbreviated as"SWUDC"below), which I work for, is a company specialized in estate development, investment consulting, and logistics services. To some extent, SWUDC represents as the pioneer to practice the new functions. Thus, the research of Waigaoqiao Bonded Area's pattern of transition is beneficial to other areas.Starting by explaining the basic concepts of the Bonded Area, this article analyzes and demonstrates the basic characteristics and difference between the Bonded Area and the Free Trade Zone. Further more, it leads deep discussion into not only the current situation of China's Bonded Areas but the pros and cons of the Bonded Area from a general view. First, by putting SWOT model into practice, it comes up with the strategic solutions to the transition by analyzing in detail transitional factors of internal conditions and external environment. Second, based on the theory of Industrial Clusters, it explores new ideas of transition and collaboration of Bonded Areas. Third, according to Inequality Theory, it elaborates the strategic plan of transition and development of the Bonded Area.Taking Waigaoqiao as an example, the article shows specific solutions on how to practice the transitions, such as transition from traditional warehousing to modern logistics, from international trade to integrated service, from processing to bonded maintenance, combining bonded warehouse with non-bonded warehouse in Waigaoqiao. Meanwhile, it comes up with respective strategy of setting up Bonded Logistics Zone, Multinational Enterprises Headquarters, Bonded Maintenance Center and Industrial Collaboration Zone.In conclusion, with economic globalization, it is practical and necessary to carry on the transition and further develop the Bonded Area. Given time and efforts, the Bonded Areas will be developed into remarkable"Free Trade Zones".