THE State Council said yesterday it will implement a special tax policy in the Shanghai Free Trade Zone (FTZ).

It will also grant crude oil import licences to qualified companies and provide preferential tax policies for firms engaged in artificial intelligence, civil aviation, semiconductors and biopharmaceuticals.

It did not elaborate on whether the special policies will include a pilot plan to drop all duties in the free trade zone expected this year.

The government is planning to drop all duties and ease procedures at the Shanghai FTZ, Reuters quoted sources as saying yesterday.

Whether or not U.S. products and companies would be included in the project remains under discussion, the sources said.

Under the plan, if implemented, foreign firms would not be charged customs duties for goods transiting or stored in the zone, would be able to store merchandise temporarily without customs clearance and benefit from simplified customs procedures.

Currently, duties are still imposed by customs at the Shanghai FTZ.

If successful, the plan could be rolled out to China’s other roughly one-dozen free trade zones, according to the sources.

The Shanghai FTZ, China’s first, was founded in 2013 with the aim of easing international trade, including making cross-border money flows more flexible.

The State Council yesterday also issued an overall plan for the new Lingang area of the Shanghai FTZ.

According to the plan, the new section will match the standard of the most competitive free trade zones worldwide and implement opening-up policies and systems with strong global market competitiveness.

The new area will facilitate overseas investment and capital flows and realize the free flow of goods, according to the plan.

(SD-Agencies)