Dalian, a port city in Liaoning Province, aims to make its port the first "free trade zone" on the Chinese mainland, the city mayor revealed yesterday.

Speaking on the sidelines of the ongoing annual session of the National People's Congress, Xia Deren said that the city is trying to gain approval from the State Council to grant Dalian Port the position of a "bonded port" and ultimately make it a free trade zone.

It means it could allow exemptions or reductions in import and export duties.

Xia wants to expand the city's current bonded zone, the only one in northeast China, which covers an area less than 2 square kilometers in the center of the city, to the whole port area, which is as big as 80 square kilometers.

Jia Qinglin, chairman of the Chinese People's Political Consultative Conference (CPPCC), China's top advisory body, said in his annual report that the central government is paying considerable attention to the plan to turn Dalian Port into a bonded port. 

And Dalian is approaching steadily towards its goal to become an important international transportation pivot in northeast Asia, Xia said.

The city is gradually shifting all its cargo transportation tasks to its new port, which is located in Dayao Bay in the city's northern part.

A 300,000-ton crude oil dock and a 300,000-ton ore dock have been put into operation in the new port area. A container terminal, which can handle an annual throughput of 8 million TEU containers, is under construction.

Xia predicts that by 2010, Dalian will have the capability to handle 530 million tons of cargo, nearly half of which will be from the sea.

The city mapped out its plan to set up inland ports in all the major cities in northeast China to facilitate them to export goods through Dalian Port, and therefore win more customers.

As one of the major ports in northern China, Dalian Port is already feeling the pressure in competition from its neighboring foreign ports.

Xia cited Busan and Incheon in the Republic of Korea as an example, as many customers had dropped Dalian and picked them as new transfer stations.

"Last year, 40 percent of the increase of Busan Port's transportation volume was originally the business of the ports in northern China," he said.

Many of China's major port cities are hoping to become bonded ports, which experts say would greatly enhance the competitiveness of China's ports.

Earlier this year, Yangshan in Shanghai and Yantian in Shenzhen, became bonded ports in China.

And the metropolis of Tianjin, which is a little more than 100 kilometers from Beijing, has received full support to build the next, and China's largest, bonded port, which would be more than 30 square kilometers.

And Xia called for the central government to increase its support to the revitalization of the old industrial bases in northeast China, especially to grant more preferential policies to give a boost to the development of the region.

He hoped that Dalian Port, as the most important port in northeast China, could have this privilege first to balance the development of the region.

"The competition is so heated," he said, "If we don't get the position of bonded port, I don't think we could beat our foreign competitors."

The total cargo volume of Dalian Port was 170 million tons last year, a year-on-year increase of 17 percent.

(China Daily March 10, 2006)