The number of returned students who applied to Shanghai Customs to buy domestically made cars surged last month. They are taking advantage of the Chinese Customs policy making such purchases tax-exempt, the agency said yesterday.

Overseas returnees who applied to buy cars last month were up 68 percent from the same month last year to 106 or a daily purchase order of 3.4 units.

"The big increase of orders is because more Chinese students returned during recent months, mainly attracted by a thriving domestic economy," said Yu Wujin, a Shanghai Customs official.

More than 400 Chinese students returned to Shanghai between September 1, 2003 and the end of last month, a fair increase from last year, according to Shanghai Personnel Bureau.

"Shanghai government announced preferential policies last year to attract returned overseas Chinese which took effect last September," said Xu Hui, an official with the bureau.

"The policies covering children's schooling and spouse's job arrangement have stimulated more Chinese students to return," he added.

The Santana 3000 Conqueror, which was only introduced a month ago, with prices between 145,000 yuan (US$17,470) and 173,600 yuan, became the top choice for returned students last month, taking 70 percent of the orders, Shanghai Customs said.

"Although only a small number of parts are imported, this model is better equipped than previous Santana models with little price change," said Gu Qing, an analyst with Haitong Securities Co Ltd.

Returned students who have studied abroad for more than a year can buy designated domestic cars without paying 10 percent purchase taxes and the tariffs on imported car components, if they returned within a year after graduation, according to a nearly decade-old policy published by the General Customs Administration.

Purchases should be made within six months after they return. In addition, they can only buy cars made by a few designated domestic carmakers including Shanghai Volkswagen Automotive Co Ltd and Shanghai General Motors Co Ltd.

Source: Shanghai Daily