A Study On Xiamen Xiangyu Bonded Zone: A Transformation From Bonded Zone To Free Trade Zone

Free Trade Zones (FTZs), segregated from other areas, are special economic zones set up by the host countries to enjoy favorable policies and hit certain economic targets. With a long history of more than 450 years, FTZs vary with countries in the scale, function and mode. But they all share the same feature of "A part of the territory of a state where any goods introduced are generally regarded, in so far as import duties and taxes are concerned, as being exempted ". Stepping into the 21st century with the tendency of the integration of world economy, market globalization and free trade, the FTZs are presenting a prospect of boosting constantly in quantities, expanding widely in more areas, spreading gradually their influence, multiplying the functions, strengthening the interactive contact, improving the management efficiency and the modernizing the management methods.Since Xiamen Xiangyu Bonded Zone was set up in 1993, it had experienced the stages of construction, initial development , the rapid development and adjustment and so on, now the economic strength of them has been constantly consolidated. They have played an important role in connecting the markets and resources at home and abroad, attracting foreign investment, introducing advanced technologies, increasing the employment opportunities and radiating and leading the regional economy, However, Xiamen Xiangyu Bonded Zones are distinctly different from the world FTZs in many aspects. The function and orientation as free trade zones have not been completed fulfilled yet.With the integration of the world economy and the deepening of the China's opening-up, and especially with China's entry into WTO, the further development of Xiamen Xiangyu Bonded Zone is encountered with unprecedented severe challenge. Owing to the congenital weakness, the lack of legislation and the ambiguous positioning, the problems arising from the operation of these zones stand out distinctly when further development is bottlenecked by the previous weaknesses. The functions the zones exert are rather limited. Several departments, leading to a low working efficiency, handle the management. Ports and zones depart and the customs inspection is not smoothly conducted. Under these circumstances, Xiamen Xiangyu Bonded Zone is compelled to transit towards the FTZs. That's a tendency required both by the outside environment and the inner initiative of bonded zone itself.Therefore, first made a comparative analysis between overseas Free Trade Zones and the Bonded Zones in China, and then studied the development and current situation of Xiamen Xiangyu Bonded Zone . Then paper argues Xiangyu Bonded Zone to be transformed into multiple Free Trade Zone is the strategy of transformation. At last this paper presents creative approach of practical application of research work.