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Report: China preparing special tax policy for Shanghai Free Trade Zone

China plans to introduce a special tax policy that may exempt foreign companies from customs duties for goods in the Shanghai Free Trade Zone, Reuters reported, citing the country's State Council website and Shanghai Deputy Mayor Chen Yin.

In addition, licenses for crude oil imports will be granted to qualified companies, according to the report, and preferential tax policies will be given to companies in the sectors of artificial intelligence, civil aviation, semiconductors and biopharmaceuticals.

Chen said the central and Shanghai governments are still drafting the details of the special tax policy.

The proposed tax policy comes amid China's deepening trade dispute with the U.S., which is set to levy an additional 10% tariff on $300 billion of Chinese goods starting Sept. 1.