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UPDATED: June 19, 2014 NO. 25 JUNE 19, 2014
The West Awakens
Long overshadowed by the east, west China is set to take center stage as it blazes an economic trail to Central Asia
By Bai Shi

Horgos is also building a comprehensive bonded zone. "This is good news for importers and exporters. We will be exempted from value-added tax when we warehouse imported goods in the zone," Habuli, a Chinese importer told Beijing Review.

Last year, the value of trade through Horgos reached $14.2 billion, said Liu Yanong, Deputy Director of Committee of Horgos Economic Development Zone.

For northwest provinces like Shaanxi and Gansu, foreign trade did not amount to much in the past owing to their location far from sea ports and borderlines. Now, by building bonded zones, it has become possible for them to become new trade centers.

Xi'an launched the plan of building an international inland port six years ago. At present, the project has only partially come into operation.

Xi'an International Inland Port includes a trade and logistics park, a bonded zone, two export processing zones and a hi-tech zone.

The trade and logistics park has established business cooperation relations with seaports in east China and cities along the western border, Han said.

In April, the park reached an agreement with Kazakhstan National Rail Corp. on establishing joint transport business to promote the transport and warehousing of each other's cargos.

With the aid of the regular international freight train and the logistic park, Xi'an plans to build itself up as a major inland center of goods collection and distribution toward Central Asia, Han said.

In 2011, Xi'an established the first comprehensive bonded zone in northwest China. The bonded zone, covering an area of 6.18 square km, is under the special supervision of Chinese Customs and enjoys the highest opening level, the most preferential policies and the most complete functions.

With its bonded logistics and preferential policies, the Xi'an bonded zone can perform functions such as acting as a seaport for import and export enterprises and save them time in going through customs. The local government is also making efforts to put in place the service of 72-hour transit without visa at Xi'an Xianyang International Airport as soon as possible. All these efforts are expected to spark more transactions of foreign trade in Xi'an, Han said.

Construction of the Lanzhou Comprehensive Bonded Zone began this March, Zhang Shengzhen, Secretary General of Gansu Provincial Government, told Beijing Review.

Agriculture is an economic pillar of Gansu. Agricultural products, such as potatoes, are the main goods exported to the Central Asian market. Lanzhou's bonded zone is expected to boost the local food-processing industry in the near future. At present, five enterprises, including two Central Asian companies, have reached agreements to establish factories in the zone, Zhang said.

Cross-border free trade

Chinese and Kazakhstan people have a tradition of exchanging in-demand goods. Chinese consumers like to buy agricultural and dairy products made in Kazakhstan, and Kazakhstan people often buy light industrial products and goods for daily use from China.

Horgos has established an international cooperation center together with Kazakhstan. The center covers an area of 5.28 square km across the borderline, including 3.43 square km in China and 1.85 square km in Kazakhstan. Merchants and companies from both countries are free to do business in the center and enjoy preferential policies jointly issued by the two sides.

"The center in fact is a pilot free trade zone under an agreement reached by the two leaders of China and Kazakhstan," Liu said. Up to now, 18 Chinese enterprises have promised to open their business in the center.

At the Chinese side of the center, a market building has been put into use. Gu Hongfei, a merchant from east China's Jiangsu Province who has been engaging in border trade in Horgos for eight years, has opened a booth for wholesaling bedclothes in the newly built market.

"I opened the booth as soon as the market building was put into use last September. The center has exempted all booths in the market from paying rent for one year. For this reason, I decided to move into the market," Gu said.

In the market, Gu now has more customers than ever before. He said the daily sales at his booth are stable between 10,000 yuan and 20,000 yuan ($1,600-3,200).

"The center provides convenience in terms of customs procedures, logistics and warehousing, which reduce a lot of work for us," Gu said.

"Every customer is permitted to buy goods with a total value of 8,000 yuan ($1,280) daily in the center, which is helpful in promoting trade growth for individual merchants like me," Gu said.

Gu said his only gripe regarding the center is that the settlement of exchange needs to be improved, for banks have yet to open in the center.

Email us at: baishi@bjreview.com

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