"Previously, shipping overseas equipment back to China for maintenance took nearly four months and involved paying high taxes. Now, not only can it clear customs quickly, but costs are also significantly reduced. This gives us more confidence to 'go global.'" Recently, the bonded maintenance pilot for tunnel boring machine (TBM) with "two ends overseas" was officially approved in the China (Hunan) Pilot Free Trade Zone (Hunan FTZ). Leveraging this new foreign trade format, China Railway Construction Heavy Industry Corporation Limited (CRCHI) can now efficiently and conveniently return its exported TBM to the factory for maintenance, marking a zero breakthrough for Hunan in the bonded maintenance of large equipment.

Solving the TBM's Pain Point of "Difficult Return"

TBM is hailed as the "king of engineering machinery." It is extremely precise, complex, and customized piece of equipment that relies heavily on original factory after-sales service. However, an awkward problem has long troubled enterprises — after the products are sold, when the equipment needs to be returned to the factory for maintenance and refurbishment, it faces the dilemma of a "difficult return."

Under the traditional model, when overseas TBMs are returned to the Changsha factory for maintenance, they must go through general trade customs declaration with complicated import procedures. This includes entrusting third-party inspection at the place of dispatch in advance and applying for an import license for used mechanical and electrical products. The entire process is lengthy, severely affecting equipment turnover efficiency. In addition, enterprises must pay full import duties and VAT on top of high pre-shipment inspection fees, resulting in a sharp increase in the cost of returning each piece of equipment for repair.

This not only squeezes corporate cash flow but also weakens the competitiveness of domestically produced high-end equipment in using "repurchase strategies" to retain overseas long-term customers.

Solving this pain point is imperative.

The Hunan FTZ Changsha Area, in collaboration with the Changsha Economic and Technological Development Zone, and with support from entities such as the Department of Commerce of Hunan Province and the Xingsha Customs Authority, fully leveraged the role of the Hunan FTZ as a comprehensive experimental platform for reform and opening-up. It successfully facilitated CRCHI in launching a bonded maintenance pilot for TBMs with "two ends overseas" within the Hunan FTZ Changsha Area. This also represents Hunan's first breakthrough in the bonded maintenance of large equipment.

Bonded Maintenance with "Two Ends Overseas" Reduces Costs and Increases Efficiency

Bonded maintenance with "two ends overseas" is an innovative format supported by Hunan FTZ to facilitate the transformation and upgrading of foreign trade. The core features of this model are that both the source of goods and market are overseas: domestically produced equipment put into use overseas enters China for maintenance, and after the repair is completed, all of it is shipped back out of China without entering the domestic market for circulation or sale. It enjoys bonded policies, with import duties and VAT temporarily deferred during the maintenance period, significantly reducing financial pressure on enterprises and shortening customs clearance time.

Given the TBM characteristics of numerous components, complex processes, and multiple outsourced inspection and repair steps, relevant authorities abandoned the traditional process of "taxing first, declaring second, and inspecting last." Instead, they implemented targeted regulatory services tailored to each enterprise, custom-designing a bonded maintenance supervision plan suitable for large precision equipment.

After the implementation of the new bonded maintenance model, the entire process of equipment entering China for maintenance and being shipped back out enjoys convenient bonded policies. Customs clearance procedures are greatly streamlined, and turnover cycles are significantly shortened. Enterprises can quickly respond to global maintenance demands for overseas equipment, exporting high-quality and efficient "Chinese services" alongside "Chinese manufacturing," effectively revitalizing the existing global equipment market.

Li Minqiang, deputy secretary of the Party Working Committee and director of the Management Committee of the Hunan FTZ Changsha Area, introduced that in the future, the Changsha Area will explore promoting bonded maintenance for large equipment in sectors such as aerospace, rail transit equipment, and power transmission and transformation equipment. By lowering the barriers for returning large overseas equipment to the factory for maintenance, domestic enterprises can enhance overseas customer loyalty through "after-sales bonding."

Source: en.changsha.gov.cn