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OFFICIAL REPLY OF THE STATE COUNCIL CONCERNING THE ESTABLISHMENT OF THE DALIAN BONDED AREA

    People's Government of Liaoning Province:

    The Report on the Establishment of the Bonded Area of Dayao Bay in Dalian
submitted by your Province in 1991 has been received. An official reply is
hereby made as follows:

    1. We have agreed to establish the Dalian Bonded Area. The Bonded Area
shall give full play to its advantage of contiguity to the port of Dayao Bay
in Dalian, actively serve the extension of entrepot trade, transit trade and
processing for export, and provide services for trade, such as processing and
sorting out, packaging, storage, transport and commodity display.

    2. The Dalian Bonded Area shall be established within the Dalian Economic
and Technological Development Zone, located in the northeast part of the
Development Zone and adjacent to the port of Dayao Bay. The east boundary of
the Bonded Area is the No.6 Highway of the Development Zone, south is the
Northeast Avenue of the Development Zone, west is the No.2 Highway of the
Development Zone, and north is the No.5 Highway of the Development Zone (all
not including the highways). It is 1.25 square kilometers in area. Separation
installation shall be equipped on all sides of the Bonded Area as required by
Customs and shall be put into use upon acceptance after checking by Customs.
No residence area shall be established within the Bonded Area. With the
exception of the security personnel, no other personnel shall be permitted to
reside in the Bonded Area.

    3. The Bonded Area shall be under the supervision and administration of
Customs. The Customs in Dalian may, in reference with the measures of the
General Customs Administration governing the Bonded Area of Outer Gaoqiao in
Shanghai approved by the State Council, formulate the detailed rules for the
supervision and administration of the Dalian Bonded Area and implement them
subject to the approval of the General Customs Administration.

    4. For the control of banking and foreign exchange in the Bonded Area, the
competent departments in Dalian City shall formulate detailed implementation
rules in accordance with the relevant State provisions governing bonded areas
in Tianjin and Shanghai, and shall implement them subject to the approval of
the competent departments of the State.

    5. The current policies for the Economic and Technological Development
Zone shall apply to the control of other matters in the Banded Area.

    6. With regard to the size of institution and personnel needed by the
Customs in the Bonded Area, your Province is allowed to study and report to
the State Council for approval and assignment.