The Shanghai city government is examining the possibility of free port status for the deep-water facility being built along Zhejiang's Yangshan islands.

The study is focused on the management model of terminals and a trans-oceanic bridge, the system of the port administration, and other free port policies.

"The effort is aimed at creating a favourable shipping environment in conformity with international practices," said Gu Gang, president of the Shanghai Tongsheng Investment (Group) Company.

His words were echoed by Xu Peixing, director of the Shanghai Port Administration, who said the new deep-water port should have an international, liberal and stable environment if the city wants to become a global shipping center.

Many of the world's international shipping centers have adopted the status of "free port" which has effectively promoted the development of economy, trade and shipping services, Xu said.

"Studies are being conducted on the feasibility of 'bonded warehouses' at Yangshan, and new policies are being worked out to further decrease the overall business costs," he said.

Favourable policies will be adopted to attract the world's top 20 liner companies to move their China or Asia head offices to Shanghai, Xu said.

Local shipping experts are also calling for governmental innovations in the concept and systems on Shanghai's way to becoming a free container hub port like Hong Kong and Singapore.

A free port should include deep-water terminals, a first-rate shipping exchange environment and a shipping information center in the Asia-Pacific region. A large logistics center, a free port system in line with international practices, and an international shipping environment with excellent services would also be required.

"But free port policies are crucial for the city to reach an international shipping center in Northeast Asia," said Zhu Jianhua, chairman of the BOD of Shanghai Shipping Exchange.

(China Daily November 4, 2003)