China has said that it will implement a special tax policy for the newly expanded Shanghai Free Trade Zone, in a bid to promote free trade as Beijing’s year-long trade dispute with Washington threatened to escalate into a full-blown economic war, reported Reuters.

China will also grant crude oil import licenses to qualified companies, the State Council said in a statement on its website, adding that it will provide preferential tax policies for firms operating in artificial intelligence, civil aviation, semiconductor and biopharmaceutical sectors.

The State Council did not elaborate further on the special tax policies, but deputy mayor of Shanghai Chen Yin later told a briefing that foreign companies may not be charged customs duties for goods transiting or stored in the zone.

The Shanghai government is working closely with the central government to draft the details, added Chen