China's State Council on Wednesday approved the establishment of the Dayaowan Bonded Harbor Area in Dalian, Liaoning Province, the third such port area in China.

The other two are the Dongjiang Bonded Harbor Area in Tianjin, an industrial center in north China, and Yangshan Bonded Harbor Area in Shanghai.

The Dayaowan Bonded Harbor Area will benefit from preferential taxation and foreign exchange policies, according to Rong Xiaofan, deputy director of Dalian Customs.

The area will cover 6.88 square kilometers and will provide a range of services including terminal operation, logistics, processing and other services, according to Zhang Shikun, director of the area.

"The area is expected to increase China's market share in the northeast Asian shipping industry. It is also a major step towards forming a free trade zone between China, Japan and South Korea," Zhang said.

"The Dayaowan Bonded Harbor Area provides opportunities to Dalian and its nearby areas. It will facilitate the development of China's northeastern region, and boost economic and trade cooperation with northeast Asian countries," Xia Deren, mayor of Dalian, said.

Since it started operations in December 2005, the Yangshan Bonded Harbor Area has piqued capacities at Shanghai Port, which handled a record high 10.8 million TEUs (twenty-foot equivalent unit) in the first half of the year, up 17.8 percent year-on-year; 143 million tons of cargo including 89.45 million tons of exports, an increase of 7.5 and 9.5 percent respectively.

(Xinhua News Agency October 12, 2006)