WITH China's accession to the World Trade Organisation (WTO), the nation has embarked on a programme to expedite the establishment of so-called "free trade zones".

According to a report by Xinhua News Agency, the advantages and importance of the existing "bonded areas" have diminished.

The story quoted vice-professor, Zhang Mingzhi, of Xiamen University describing the new zones as "a kind of specific economic area modelled between a bonded area and a free trade region".

A Shenzhen official said the building of "free trade zones" logistics parks in port areas would lead to the development of high value added businesses such as bonded storage, commodity exhibition, and freight packaging and distribution which are essential for the operations of a modern port and the logistics industry.

The mainland's State Council recently gave the green light for conversion projects to be carried out in seven bonded areas in Xiamen, Qingdao, Ningbo, Dalian, Zhangjiagang, Shenzhen Yantian and Tianjin to transform them into free trade zones, Xinhua added.

The move follows a similar trial which began four months ago at the Shanghai Waigao Qiao Bonded area.

In Xiamen for example, an area measuring 0.7 square kilometres has been set up between Xiangyu bonded area and Dongdu Port where the free trade zone experiment will be carried out later this year.

Xinhua explained that the free trade zones will be used solely for storing high valued goods with customs facilities available to handle freight destined for overseas and goods for the domestic market. Tax rebates will be offered to goods sent overseas while those sold within the country will be taxed additionally, Xinhua added.