Shanghai weighs free-port status

Shanghai weighs free-port status

Shanghai's new deep-sea container hub could also get free-port status, if a municipal study now underway is accepted.

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

The study focuses on the management model of terminals and a cross-ocean bridge, port administration and other free-port policies, he said.

Xu Peixing, director of the Shanghai Port Administration, said the new site on the island of Yangshan should be "international, liberal and stable" if it is to become a true global shipping center.

"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.

Policies will be introduced that are intended to lure the world's top 20 liner companies to move their China or Asia head offices to Shanghai, Xu said.

There has been considerable lobbying to make Yangshan more like Hong Kong or Singapore. In addition to deep-water terminals, that would mean a shipping exchange and information center, large logistics operations and local practices meshing with international shipping.

The first phase of Yangshan, with capacity of 3 million TEUs, is expected to be ready by the end of 2005 at a cost of 14.3 billion yuan ($1.73 billion).

The Port of Shanghai, China's largest, handled 5.2 million TEUs in the first half of the year, up 35.6 percent year-on-year. It is forecast by officials to handle more than 10 million TEUs this year.