Beijing's culture free port to open?

China's art market to see potential boost from free trade zone

"A free trade zone is not a freeport," said Shen Mingchu, the deputy president of Beijing Gehua Cultural Development Group, referring to the recent discussion stirred by a report from The Art Newspaper with the headline, "Beijing to get freeport to challenge Hong Kong's supremacy."

The Gehua group and the management committee of Beijing Tianzhu free trade zone have jointly established a culture free trade zone in Tianzhu, near Beijing Capital International Airport.

The project, which aims to promote cultural communication and trade by offering different levels of policy advantages in that area, was supported by the people's government of Beijing and the Ministry of Culture.

Changing policies

Since the ground-breaking ceremony in March, discussion about the free trade zone has not stopped.

In April, China changed its policies surrounding custom duties. The tariff rate on artworks was reduced but supervision became tighter.

A few large transportation companies providing services to auction houses faced pressure from customs. The 17 percent value-added tax did not change.

Many art collectors and auction companies have complained about the changing policy in China while anticipating the arrival of a free trade zone to bring in relief for the market.

The free trade zone will allow international companies to exhibit, trade and hold auctions for cultural products, tax free in the given area. Many see this as a positive influence on the Chinese mainland art market.

"People are unclear about the idea of a free trade zone. It has little effect on collectors who want to bring art to China," said Shen, who explained that the concept of a free trade zone was mistaken by many media organizations as a "freeport".

"The cultural environment in Beijing is not comparable to Hong Kong. The art transaction market is mature in Hong Kong, a real free port," said Shen.

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