The Shanghai municipal government is looking for retail space to open a duty-free store as part of its effort to promote the city as an international trading center.

The plan to open the outlet, which has been on the local government's drawing board for some time, was given the green light by Shanghai Municipal People's Congress Standing Committee on Wednesday when it approved a new policy to establish an international trading center in the city.

A sales representative assists a shopper at China Duty Free Group Co Ltd's outlet in Sanya, Hainan province. [Photo/China Daily]?

According to the policy, which will come into effect next year, the Shanghai government aims to open a duty-free store and set up a free-trade zone to benefit more consumers and local retailers.

China Duty Free Group Co Ltd, the only State-owned enterprise specializing in nationwide duty free business with approval from the State Council, signed a strategic cooperation agreement with Shanghai municipal government in 2011 to open a duty-free store in the city.

"We have always intended to open a duty-free store in Shanghai, which is a growing trade, consumer and tourism center," said Fan Jing, a marketing officer from China Duty Free Group.

China Duty Free Group also signed an agreement with Beijing's Chaoyang district government at the China Beijing International Fair for Trade in Services on May to launch the first duty-free store in downtown Beijing.

Experts suggested that Shanghai's duty-free store could be a supporting facility for the Shanghai Disneyland project, which is expected to open to the public in 2015.

"It is quite possible that the store will be opened in the area of Chuansha in Pudong district, where Shanghai Disneyland will be located, offering tourists a combined package of tourism, catering and shopping," said Zhu Lianqing, director of the Commerce Research Center of Shanghai Academy of Social Sciences.

Zhu added that it is a promising step that the policy was approved to open a duty-free store in the near future, although it will still take some time to iron out the details of how the store will be operated.

Zou Jianqing, a 32-year old businesswoman from Wenzhou, Zhejiang province, who frequently flies to Europe to buy luxury goods, welcomed the planned duty-free store.

"It's quite exciting that I won't have to fly overseas for reasonably priced luxury goods."

In addition, by introducing a departure tax-free policy for foreign tourists, the policy also shows that Shanghai intends to pay more attention to its development as an international tourism center.

The departure tax-free service refers to tax refunds available to overseas tourists if they purchase more than a designated amount of certain items.

Shanghai Municipal Tourism Administration said that the total number of overseas tourists visiting the city is expected to reach 8 million this year, around 3 percent higher than in 2011.

"If the items we purchase get a tax refund, we will probably buy more souvenirs and gifts for our friends and relatives," said Jez King, a 38-year old UK resident who is planning a family trip to Shanghai next year.

King added that China has become a popular destination for foreign travelers, adding that the tax-free policy would definitely attract more foreign visitors.

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