A Hon Hai Precision Industry Co (鴻海精密) subsidiary in China has won approval from the Shanxi Provincial Government to operate a maintenance service for Apple Inc’s iPhones outside the province’s tax-protected zone.
The subsidiary has been granted permission to import iPhones to its manufacturing plant for repairs and export the restored handsets, the Shanxi Department of Commerce said yesterday in a brief news statement.
The repair business would reside outside the province’s tax-protected zone, the statement said.
China’s tax-protected zones, which are similar to free-trade zones, are one of the major measures taken by local governments to attract foreign investment.
The custom-supervised zones are allowed to process export goods, engage in foreign trade and are eligible for special customs policies, such as foreign companies do not pay import taxes for their goods within the zones.
The department said its approval completes a one-stop service for Hon Hai in Shanxi to import electronics components, manufacture iPhones and offer a maintenance service for the handsets.
The move could help Shanxi accelerate its industrial transformation, maintain economic growth and increase job opportunities, the department said.
Market analysts said the approval could help Hon Hai expand its iPhone after-sales service and help reduce tariff costs.
Hon Hai has been increasing its smartphone manufacturing investments in Shanxi in recent years.
Smartphones manufactured by Hon Hai were the largest export item in the province in the first quarter of this year, China’s Sohu.com Inc (搜狐) reported.
In the first eight months of this year, Shanxi exported 16.11 million smartphones, up 79.8 percent from a year ago, the report said, citing provincial government data.
The cumulative export value of smartphones in Shanxi soared by 92.1 percent annually to 24.38 billion yuan (US$3.66 billion) from January to last month, the report said.
Hon Hai in October last year initiated a program to import iPhones or smartphone components for after-sales and testing services in a tax-protected zone in Zhengzhou, Henan Province, without first transferring through its warehouses in Hong Kong.
The move reduced Hon Hai’s processing time for iPhone repairs and maintenance, and reduced logistics costs, analysts said.
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