Source: China AGLOOK! 

Bonded warehouse is a warehouse established under the approval of the customs for storing bonded goods or other goods without going through customs. It has three functions of bonded storage, export processing and transit trade, enjoying the exemption certificate, tax - free, bonded policy, and adopting the operation way of “inside the territory while outside the customs”. In accordance with the current policy, the bonded area shall implement the closed management by the customs. The imported goods from outside China into the bonded area are managed under the related bonded zone regulations, while the goods from other regions all over China into the bonded area are regarded as exit from China. In addition, China’s departments such as MOFTEC(Ministry of Foreign Trade and Economic Cooperation), SAFE(State Administration of Foreign Exchange), etc. also adopt some relative preferential policies within the bonded area.