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Characteristics of Chinese Development Zones

At the end of 1984, Chinese government decided to establish Economic and Technological Development Zones in 14 coastal cities of Dalian, Tianjin, Shanghai, Guangzhou ,and others. After more than 10 years development, economic and technological development zones have been established in all the main industrial cities from coastal region to inland, and become the most flourishing economic areas. Economic and Technological Development Zones were also areas with the largest foreign investment and the highest economic growth in China.

The Office of Special Economic Zones of the State Council of PRC is a government organization responsible for administration of economic and technological development zones. "Window of China's Development Zones" provides information for investors home and abroad on fast growth, high efficiency, great potential, favorable environment and remarkable achievements in economic and technological development zones. All investors are welcome to joint hands there for mutual development.

Economic development zones with special supports of Chinese government
Establishment of economic and technological development zones were approved by central government and local governments.

Economic development zones with the largest foreign investment
The total area of the 48 economic and technological development zones are about 400 sq. km., equal to 0.004% of the total area of China. FDI attracted by them account for about 10% of national total. According to statistics, about 200 world well-known and competitive companies have invested and established offices in the development zones and made great achievements, such as MOTOROLA, PG, Pfizer, XEROX, Johnson & Johnson, Bristol-Myers Squibb, Coca-Cola, PEPSI, Mitsubishi, Panasonic, TOSHIBA, CANON, Sanyo, Unilever, Bayer AG, Hoechst, SEW, EIF, TOTAL, ABB, Nestle, Nortel Networks, Perfetti, DAEWOO, Samsung, HYUNDAI, Philips, AKZO, CHIA TAI and so on.

Area of fast economic development
Take the 13 coastal developing zones established in the early days for example, the total industrial output value was up from RMB0.3 billion in 1986 to RMB135 billion in 1996, an 450 times increase over ten years.

Low cost and high profit
In 1996, the labor productivity of some development zones like Minhang, Tianjin, Dalian, Rongqiao, Beijing and Kunshan exceeded £¤200,000 per person. Out of which the labor productivity of Minhang Economic &Technological Development Zone reached £¤419,000 per person, and Tianjin Economic &Technological Development Zone was £¤394,000 per person.

Capital-intensive enterprises and Hi-tech industries stand in dominant position
Projects with investment over US$ 10 million accounted for a large proportion in development zones. In 1996, more than 100 projects with US$ 10 million investment approved by the four developing zones in Guangzhou, Tianjin, Dalian, Minhang. Hi-tech and foreign exchange earning enterprises are the focus and account for a large proportion in the development zones. Development zones provide everything necessary for starting a new business and for the development of hatcheries in the area of science and technology. Science and technology centers , risk funds are ready there in support to hi-tech development and research.

Tremendous development potential & geological advantage
1. Economic & technological development zones are either in provincial capitals or in cities of economic center, or hub of communication
2. Economic & technological development zones are in highly developed areas with good industrial foundation, and a completely industrial system
3. Convenient communication

Advanced infrastructure & Sound supporting system
1. Economic & technological development zones are committed to build and perfect the infrastructure. By the end of 1996, investment in infrastructure totaled £¤50 billion.
2. High efficiency and low cost in water, power , gas and heat supply, in telecommunication, road network.
3. Developed information industry. Each developing zone has access to Internet, and easy access to outside world.
4. High quality engineers and skilled workers to employ.

Area that according with international regulation and high opening for outside
Chinese government awards corresponding economic managing right to management committee of Economic-Technological Development Area, and development area has simple and speedy adaptive working procedure for approving foreign investment projects.
Each Economic-Technological Development Area provides good services to foreign investment enterprises for their building, producing and managing, and commonly set up service center for foreign investment enterprises and complaining center for foreign businessmen.

Area with ascendant investing policy and good law condition
1. Foreign investment enterprises for production in economic-technological development area are collected income tax for 15%. Of which, enterprise's management period are more than 10 years, from the lucrative year income tax free in the first and the second year, half income tax from the third to the fifth year. (That's the lowest income tax rate of enterprises in China)
2. When de-rating of enterprise's income tax expired, which according to national regulation, enterprises which are affirmed to export products and export value account for more than 70% of the total value in the same year, then hand in enterprise's income tax for 10%. Enterprises, which are affirmed of advanced technological enterprises, hand in half of enterprise's income tax for other 3 years.
3. Foreign businessmen of Sino-foreign Equity Joint Ventures in Development Area remit the profit, which earn from enterprises, outside China, then the remitted tax is free.
4. Businessmen who don't set up institution in China but have bonus stock, interest, rent license using fee and other income from Development Area, are collected income tax for 10% except free income tax according to law. If businessmen can apply favorable financing and equipments or transferential advanced technology, they will be affirmed by municipal government, which Development Area is affiliated with, if they need to take more tax reducing or free.
5. China carries out favorable policy on Development Area's finance and credit in order to support the basic establishment construction.
6. Provincial People's Congress, which each Development Area is affiliated with, approves "Managing Statute of Economic-technological Development Area", and it has credible ensuring by law.
7. Chinese government awards economic managing right, which is equal to that of local government, to management committee of Economic-Technological Development Area, and the circulating mechanism is high-efficiency and canonical

The Open Policy is basic national policy of China, and China actively support the development and constructing of Development Area. Each Development Area has improved investing condition and advanced The Open Policy to wider field and high level. We fervidly welcome foreign investors investing in China's Development Area on economy, technology and trade. Looking after cooperating opportunity and common development.