According to China Securities Journal, Shanghai is planning tax relief policies to attract talent, funds and resources, to promote its development as an international financial center and shipping hub.

The State Council (China's cabinet) said on March 25, that Shanghai's future lies in modern service industries, manufacturing, and continuing to develop as an international financial center and shipping hub.

A source quoted by China Securities Journal said, "To achieve the target, Shanghai needs to implement tax policies, a legal system and financial support in line with international practice. Shanghai's "twin track" plan to develop as a financial center and shipping hub includes a number of tax discounts and policies."

Shanghai is planning a shipping development experimental zone to enhance the competitiveness of domestic shipping enterprises. It is also examining tax policies designed to offer incentives to ship financing and leasing business.

The city is extending tax relief measures on Chinese-funded "flags of convenience" vessels for a further three years to June 2012. (A flag of convenience means a ship is owned in one country and registered in another). About a third of the world's merchant fleet operates under flags of convenience for tax reasons.

Enterprises registered in Yangshan Port, that are engaged in international shipping, cargo transport operations and warehousing operations will be exempted from business tax. Enterprises will be allowed to create offshore accounts, allowing convenient settlement of overseas business. Shanghai is also planning a port of departure tax rebate policy to encourage the development of transit operations in Yangshan.

The source added that as part of its twin-track plan, Shanghai plans to encourage the development of technologically advanced industries in Pudong.

(China.org.cn by Ma Yujia, April 2, 2009)