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Chinese Smart Cities: an ecosystem of software and data platforms to store and process...

Chinese Smart Cities: an ecosystem of software and data platforms to store and process information in real-time.

Last week, the 15th China Smart City Conference took place over two days in Beijing. The theme of the event was “Promoting data sharing and integration, serving the people full-time.” The conference included an award ceremony for pioneering smart city apps and software.


Freedo 北京飞渡科技 was one of the companies that received an award. The company’s founder, Sòng Bīn 宋彬, gave an acceptance speech in which he discussed Freedo’s self-developed platform as a service (Paas) application and database, a 3D computational engine that uses artificial intelligence (AI) to integrate real and virtual data for developing digital twin models of cities.


Such digital twins can be used to model and plan different types of urban spaces, and manage resource usage, for example water supply and conservation.



Smart and super smart cities

Freedo is one of a range of new start-ups in China that are developing apps and software for managing smart cities. Technically, a smart city — or a digital, intelligent or wired city — is an urban area in which technology and sensors are used to collect data, which is then applied in real-time to manage the city’s utilities and resources, such as by improving the quality of infrastructure and services, and reducing waste, energy consumption, and pollution. Smart cities are based on key technology like 5G and the Internet of Things — for machines, vehicles, systems and devices to communicate with each other — and an ecosystem of software and data platforms to store and process information in real-time.


The use and management of renewable energy is a key component of smart cities. This includes the application of smart grids, green construction technology, lithium-ion batteries for energy storage, and smart waste management and water conservation systems. Other key focus areas are smart and autonomous transportation and traffic management, and data-driven public health management.


In China, the scale of digital infrastructure has developed rapidly. Per an interview with a director of the Cyberspace Administration of China published last week, China already has:

  • 29 “dual-gigabit” cities with wired and wireless gigabit broadband (this number is expected to rise to 100 cities by the end of 2023);
  • 1.85 million 5G base stations with 450 million 5G mobile users;
  • 5.2 million standard data center racks, 19 million data center servers, and storage capacity of 800 exabytes.


The concept of smart city development has been incorporated in the 14th Five Year Plan (2021 to 2025) development goals of nearly all Chinese provinces and regions. These include delivering smart governance and services: China’s national e-government service platform has more than a billion users and more than 10,000 standardized services.


Unsurprisingly, China’s smartest cities are its first tier cities, especially Beijing, Shanghai, and Shenzhen. The latter city in particular has taken the lead in releasing specific plans for constructing a smart city and developing digital governance.


In an interview published in July 2002, the vice chairperson of Deloitte China, Shī Néngzì 施能自, stated that China’s smart city development is now transitioning to the “super smart city” stage in which cities will have “ AI city brains” that can analyze vast amounts of data instantly and implement decisions on services and city management in real-time. Super smart cities will also be able to intelligently connect suppliers with consumers, and provide citizens with more diverse consumption scenarios.



Smart city projects around China

“Smart pipes” in Chongqing

As of the end of June, 36 districts in Chongqing have been connected to a comprehensive urban pipeline management network that makes use of a digital twin command center. The system allows for real-time management of the pipe network with the ability to identify leaks. The system has also been installed in the cities of Wuxi (Jiangsu Province) and Shijiazhuang (Hebei Province), and is being rolled out to other cities across China.


Beijing Smart City 2.0

An official from the Beijing Municipal government stated at a press conference on September 20 that the city has now transitioned to the Smart City 2.0 stage, which includes:


  • The Beijing International Data Exchange platform that incorporates 333 data trading entities controlling 773 million transactions.
  • The Beijing High-level Autonomous Driving Demonstration Zone, which is being expanded to cover 500 square kilometers (193 square miles) of the city.
  • An urban spaces pilot computing and design system to manage a million square meters (10.76 million square feet) in the Haidian District.
  • And currently in development: Digital community governance models, industry-research integrated blockchain systems, and a metaverse experience center.


Beijing smart city start-up program in Fengtai

The Fengtai District of Beijing has implemented a smart city incentive program to attract high-tech companies with subsidies, and the district now claims to have 1,900 high-tech enterprises. On September 22, the district government held a special press conference that highlighted several smart city start-ups operating in the district:


  • Jiu-Yi Technology 久译科技 has installed an early warning system in the city’s rail and subway lines that monitors passenger flows, equipment, and facilities, and which can detect safety issues such as waterlogged platforms and dead bodies on the tracks.

  • Yunlu Technology 北京云庐科技 has installed a heating pipe network intelligent monitoring platform that can automatically detect leaks and conduct smart temperature adjustments.

  • HES Group 北京豪尔赛智慧城域科技 is developing an immerse tourism experience in Beijing with installations of 3D LED screens, interactive displays, and colored buildings.

  • All in Tech 傲林科技 has developed an industrial metaverse application that the company claims can transform any industrial problem into manageable datasets.


Smart city decarbonization

On September 21, Terminus 特斯联, which describes itself as an Artificial Intelligence of Things (AIoT) company, launched the latest version of its urban decarbonization operating system for smart cities to comprehensively monitor key indicators like temperature and humidity, manage energy supply and consumption, and optimize energy usage via a digital twin system.


The takeaway

There is a great deal of jargon connected to smart cities, and a lot of speculative investment. It’s also unclear to what extent the new technologies will actually make life more convenient for residents as opposed to providing the government with ever more invasive techniques to surveil and control citizens.


Source: By Barry Van Wyk for the China Project






Located in the southwest of the Pearl River estuary in Guangdong Province, with Hong Kong in the east and Macao in the south. It is a key point of the 21st-Century Maritime Silk Road. In just three decades Zhuhai has gone from a poor fishing village to a prosperous modern city as one of China’s first special economic zones: the city has always prioritized ecological development, boasting one of the best environments in China. Since the Hengqin FTZ (Free Trade Zone) came into operation in 2015, the city has played an increasingly important role in China’s Belt & Road Initiative. It has cooperated with Macao to build a world-class tourism and leisure center and China-Portugal economic and trade cooperation platform. Economic and trade relations with Latin American countries have also been continuously strengthened through diversification and the furthering of secure access to the outside world.



The second largest port city (behind Shenzhen) in China it has population of 1.6 million (2015. Zhuhai has three districts(Xiangzhou, Doumen and Jinwan) and five economic zones (Gaolan Port Economic, Zhuhai Hi-Tech, Zhuhai Free Trade, Hengqin FTZ, and Zhuhai Wanshan Marine Development Experimental).



The city has focused its industrial development on high-end services, high-end manufacturing, hi-tech industry, marine economy and eco-agriculture.  It is home to high-end manufacturing enterprises such as China National Offshore Oil Corporation’s (CNOOC) deep ocean engineering equipment department, Sany Heavy Industry, Ferretti, China Aviation Industry General Aircraft Co (CAIGA) and Gree Electric Appliances. The high-tech field is represented by Kingsoft, Xiaomi Tech, Meizu and United Laboratories.



Transport Links



The 55km Hong Kong-Zuhai-Macao bridge is an ongoing project due to open in 2018.



Gaolan deep water port is one of the leading International ports in Guandong province. Specializing in petrochemicals, energy and equipment the port handled 107 million tons of cargo in 2014. Following the opening of the Guangzhou-Zhuhai Railway and Gaolan Port Expressway at the end of 2012, the port has advanced its distribution and collection network. A harbor industry cluster involving fine chemicals, petrochemicals, electric power, energy, offshore equipment manufacturing, and leisure tourism has been formed, too.

Port logistics is a supporting industry of this zone. Fortune Global 500 enterprises such as BP, SANY, Shell, Lubrizol, Solvay, Hutchison Whampoa as well as central enterprises like CNOOC, PetroChina, SinoChem, COSCO, and Shenhua have settled here.



Zhuhai Airport accommodated 4.08 million flights in 2014, this is expected to increase to 12 million by 2020.



Hengqin Free Trade Zone

Situated in the south of Zhuhai the Hengqin FTZ (Free Trade Zone) is only 34 nautical miles from Hong Kong. Covering 28 sq km, the FTZ plans a land reclamation project to double in land mass by 2020.



Preferential policies

  • Eligible enterprises in Hengqin are taxed at a reduced rate of 15 percent.
  • Administration of bonded or tax exempt production-related goods entering Hengqin from abroad has been conducted.
  • Production-related goods sold from areas of the Chinese mainland to Hengqin are treated as exports and enjoy tax refunds.
  • Transactions among enterprises located within the Hengqin FTZ are exempted from any value-added tax and/or consumption tax.
  • Hong Kong/Macao residents working in Hengqin receive the appropriate China Individual Income Tax (IIT) deduction from the Guangdong Provincial Government so that their effective China IIT burden would be close to what they would pay if they instead had been working where they are domiciled.
  • Clearance procedures for residents of Hong Kong and Macao entering and leaving Hengqin are simplified, with 24-hour passage at the Lotus Bridge Checkpoint.
  • Administrative regulations for Macao vehicles with single license plates (to be operated exclusively within Hengqin) have been issued.



Industrial Parks

These include: Zhuhai Hi-Tech Industrial Development Zone, Zhuhai Free Trade Zone, Wanshan Marine Development Experimental Zone, Zhuhai Aviation Industrial Park, Fushan Industrial Park.




LETS Creative Park


LETS Cultural District is located in the former Daishan Industrial Park, Qianshan, in the Xiangzhou District of Zhuhai. The Xiangzhou District is the political, economic and financial center of Zhuhai, hence, the ideal spot for a cultural park. The creative park will cover an area of 80,000 square meters and will be inaugurated this coming September. LETS is now renting the shop and office areas to interested clients.


By combining business with tourism, culture and recreation, LETS Cultural District will be able to cover different needs. A large business area will welcome creative companies and start-ups, and give them a platform where they can turn their ideas into innovations. Apart from office buildings, shared offices and a park, this quarter will also include interactive workshop areas that can be rented for the long run or as a pop-up workshop for a short period.


The new Hong Kong-Zhuhai-Macau Bridge which will be located in the Xiangzhou District will be completed soon. For this reason, Zhuhai’s business center will flourish in the upcoming years. Zhuhai is expected to become an economic power due to its new proximity to the international business centers Hong Kong and Macau. LETS Cultural District is ideally located in between the Nanping Bridge and the Qianshan Bridge. Hong Kong and Macau, therefore, are just a short journey over a bridge away.




The slow down of Chinese economy has been making headlines around the world, however there are a number of Chinese emerging cities where the economy is not only growing, but by double digits and accelerating.



Guiyang is the capital of Guizhou province in Southwest China. Guizhou has traditionally been a poor province with an economy heavily relying on state owned enterprises. With the population of 2.8 million, it is now fast becoming a hub of operations for Chinese telecom companies and “Big Data”. Private companies are also following the lead with Alibaba setting up cloud-computing facilities in the city.




Guiyang also serves as an important transportation hub for South Western China: the Guiyang–Guangzhou High-Speed Railway began operations in December 2014. Three more high-speed rail lines to Chongqing, Kunming, and Changsha will commence operations within the next few years. Whilst disposable income per person is currently around USD 5,100/year, almost half of China’s average of USD 9,800/year, this is quickly rising..




Major Industries:



Phosphorus-coal-based chemicals

The city of Guiyang is one of China's three largest phosphate ore bases, with phosphate ore reserves of 428 million tons and more than 70 percent of the country's phosphate ore. The ore reserves in Kaiyang county alone amount to 390 million tons, or a third of the nation’s high-grade ore. The high-grade phosphorus pentoxide ore accounts for 78 percent of China's total. It also has three chemical industry bases -- the Kaiyang Phosphorus and Coal Chemical Ecological Industrial Demonstration Base, Xifeng Phosphorus and Coal Chemical Ecological Industrial Demonstration Base, and Qingzhen Coal Chemical Base. Total output value of the phosphorus-coal-based chemical sectors in Guiyang, in 2011, was 26.3 billion yuan ($4.29 billion).



The phosphorus-coal-based chemical industry is focused on improving output and efficiency, combining its phosphorus, coal, water, and electricity resources.


Aluminum and aluminum processing

With proven reserves of 424 million tons of bauxite resources the province is a major Aluminum producer. Leading enterprises and producers are: Aluminum Corp of China (Chalco), Guizhou Aluminum Industrial Base, Galuminium Group and R&D institutes such as the Guiyang Aluminum Magnesium Design and Research Institute and the Chalco Guizhou Branch. The industry can produce 3 million tons of bauxite annually, as well as 1.2 million tons of alumina, 450,000 tons of electrolytic aluminum, 300,000 tons of carbon for aluminum use, 50 million tons of refined aluminum, and 200,000 tons of high purity aluminum.


Developing the downstream aluminum industry is a current focus in the province. The start of the Chalco aluminium strips project in 2010, with total amount of 150,000 tons and a total investment of 700 million yuan, marked a significant breakthrough in the aluminum deep processing industry in Guiyang.




In 2015 Geely Holding Group Co began construction of its new-energy car manufacturing base in Guiyang. The 0.6-square-kilometer factory consists of a modernized production line of punching press, welding, painting and assembly, and will make methanol-powered automobiles. Geely has made a total investment of around 10.2 billion yuan ($1.6 billion) and expects the first car off the production line in 2017.



Tobacco and food industry

Guiyang's Cigarette Factory, a subsidiary of the China Tobacco Guizhou Industrial Co, is a leading provincial enterprise. In the food sector, Guiyang has 47 food companies, covering poultry, chili peppers, corn, soybeans, rapeseed, peanuts, ginger, onions, and garlic, and 10 other product categories, with hundreds of types of food.



The Nanming Food Industry Park and Wudang Food Industry Park are leaders in the food sector in Guiyang. Work on the Longdongbao Food and Light Industry Park, on a 903 hectare space, began in September 2010 and will be completed in 2017. It is expected to pull in 13.6 billion yuan in investment. Work continues on the Wudang Food Industry Park and is expected to bring in nine enterprises during Phase I, and have 1 billion yuan in output value.



Equipment manufacturing

Guiyang's equipment manufacturing sector is rapidly and becoming a pillar of industry. Guiyang has a comprehensive array of mid-sized to large equipment manufacturers. The Guizhou Jonyang Kinetics Co is a domestic leader in hydraulic excavators, Guizhou Xianfeng Industrial Co is one of the Top 10 producers of large slide grinders and forging equipment and the Guiyang Xintian Oetech Co. focuses on the production of high-tech optical instruments. With its abundance of skilled workforce R&D capacity and production strengths, Guiyang has been able to build an industrial capacity that covers seven equipment manufacturing industries. It has industrial clusters in construction machinery, automobiles and automobile parts and electronic components.




With the support of the municipal government, Guiyang's logistics sector has grown and is playing an important role in the local economy. Guiyang is headed to become a regional logistics center with it`s two logistics hubs -- the Guizhou Mengguan International Logistics Center and Longdongbao International Aviation Logistics Park (and three regional logistics parks: Zhazuo Logistics, Qingzhen Logistics, and Jinhua Logistics). It further expects to build: cargo logistics, more distribution centers, dry ports and a bonded zone.




Guizhou province is known for its herbal medicines and has turned its pharmaceutical sector into a pillar of industry over the past decade It now has 74 pharmaceutical companies and an industrial structure that covers a diverse range of biological products, Chinese patent medicines, pharmaceutical chemicals, medical consumables, and Chinese medicinal decoctions.



New Tech & Telecoms.

China Telecom will invest 4-billion yuan ($469 million) in optical network construction, cloud computing, and big data development over the next three years. The aim being to turn Guiyang into a major data center for China: the municipal government sees the big data industry as key to its future economic development and has already established preferential policies for big data entrepreneurs.



The China Telecom Cloud Computing Guizhou Information Park covers an area of (33.3 hectares) in the Gui'an near the city. The first phase of the park , already completed, comprises eight datacentres, one power centre and two support centres. It is expected to accommodate one million servers.



By the end of 2017, cities and towns in the province are expected to have 100-megabyte broadband coverage and a fourth generation network in rural and urban areas and, at the same time, the two will cooperate in a Guiyang cloud computing platform, a municipal data sharing platform, and a Guizhou Internet exchange center.



Preferential policies

1. Encouraged industries located in West China are levied corporate income taxes at a discount of 15 percent. Resource taxes for those enterprises are levied via ad valorem instead of specific duties.

2. Qualified high-tech enterprises located in the high-tech industrial development zone approved by the State Council are levied corporate income taxes at a discount of 15 percent.

3. Enterprises established in the different districts and industrial development zones within Guiyang can enjoy local preferential policies.

Beijing`s satellite towns: Jing-Jin...

Beijing`s satellite towns: Jing-Jin-Ji

Beijing`s satellite townships are now in the spotlight in view of the Governments aim for the integrated development of Beijing, Tianjing and Hebei provinces, know as Jing-Jin-Ji. Over the next 15 years it is planed to transfer non-essential functions out of Beijing to the new townships.




A 40 minute metro ride east of Beijing`s CBD area is Tongzhou (pop.1.3 million est.), where construction of a new CBD area and Universal studios theme park are well under way: built at the intersection of the Beijing & Hangzhou Grand Canals, the new town is expected to cover over 80 square kilometers. Tongzhou will also be home to the new Beijing city Municipal Governmental Offices at Lucheng town: some 6km east of the new CBD.  Also expected to relocate are state-owned-enterprises, hospitals and universities. Planners hope the area will draw in a further million people, the first phase of the project due to be opened in 2017.





The local government has agreed to fund 86 key projects in the area, setting aside over 160 Billon RMB. Currently housing prices run in the 30,000-40,000 rmb/sqm range.





As part of a move to connect and integrate transport, Beijing is to build its third civil airport, Daxing International Airport, located adjacent to Daxing district in Beijing and Langfang in Hebei province. It is due to be completed by the end of 2017 and operational in 2018 it is expected to carry 120 million passengers by 2050.



The Biomedical base is 60 minutes, via metro, from Bejing`s CBD area with numerous office and residential complexes already completed. As part of the district's growth, a new 391,000 sq m above- and belowground mixed-use development—dubbed the Vanke-Shoukai Mixed-Use Development Daxing—is also under way, scheduled to be completed in 2017.







Key aims and development outline

Beijing will remain the national center of political, cultural, and international exchange activities as well as a technological innovation center.



Tianjin municipality will be a national research and development base for advanced manufacturing industry, a shipping hub for north China, a demonstration area for financial innovation, and an experimental area for further reform and opening up.



Hebei province will be an important national base for trade and logistics, an experimental area for industrial transition and upgrading, a demonstration area of modern urbanization and coordinated development of urban and rural areas, and an ecological buffer zone.



A medium-term aim of the strategy is to control the permanent population of Beijing within 23 million and to relieve air pollution and congestion. Long term, the strategy aims to form an integrated region of Beijing-Tianjin-Hebei, with a better economic structure, a cleaner environment and improved public services.



Industrial Parks in the Jing-Jin-Ji area.



Tongzhou Industrial Park.

Established in 2006, Tongzhou Industrial Park covers two industrial bases: Opto-Mechatronics Industrial Park and Jinqiao Science and Technology Industrial Base. The park has a total planned area of 14.5 square kilometers of which 11.41 square kilometers have already been developed. 360 enterprises have accessed the park, including 30 high and new-tech enterprises at national level and 76 at Zhongguancun park level.



Tongzhou Park prioritizes world-class industries of optic-mechanical integration, environmental protection and new energy, high-end equipment manufacturing. The park features microelectronics, optoelectronics, automotive electronics, avionics, advanced equipment manufacturing, intellectual instruments, laser technology, numerical control machine, printing machinery, medical equipment, semiconductor material, environmental protection equipment and auto parts.



The park project has so far invested 2.2 billion yuan ($346.28 million) to construct essential infrastructure and thus creates a favorable environment for production and R&D,.



Daxing Biomedicine Industrial Base.

Daxing Biomedicine Industrial Base is a biotechnology industrialization base built by the Beijing Municipal Government to revitalize its modern manufacturing industry. Being a bio-industry cluster area for the Bohai Economic Zone and the entire northern region, the base holds industrial functions such as biotechnology indigenous innovation, product R&D, industrialization of technical achievements, R&D and producer services in Beijing.



Situated in Daxing New Town in Beijing, 20 kilometers away from the urban area, 50 minutes' drive to Beijing Capital International Airport. The base is not far from Subway Line No.4 and the new international second capital airport.



The base has four development and support priorities – biopharmaceutical projects centering on vaccine and protein drugs; the import of modernized and internationalized TCM enterprises to drive the growth of medicine, health care products; the introduction of medical instrument programs to consolidate the leading position of Beijing in the field of instrument and diagnosis; and last but not least is to bring in innovative drugs and high-end generic drug industrialization projects to form preparation products that meet international certification standards.




Fengtai Science and Technology Park was established in 1991. It was listed as a national high and new-tech zone in April 1994 and was one of the earliest three sub-parks of the Zhongguancun Science and Technology Park.



Fengtai S&T Park realized a total revenue of 195 billion yuan ($30.69) in 2010, and has obtained strong industrial agglomeration effects. The major industries in the park include: electronic information, biomedicine, new materials, new energy, as well as engineering services, rail transit, military aerospace, cultural and creative industries and producer service industry. With more than ten years of development, the park has gradually formed the headquarters of an economic zone and is playing an increasingly important role in the development of southern Beijing.



Yizhuang Beijing Economic Technological Development Area

The Beijing Economic Technological Development Area (Yizhuang) is the only state-level economic and technological development zone in the city, a core region for high-tech and modern manufacturing industries. It will become a cluster for the high-tech manufacturing and strategic-emerging industries in southern Beijing.



In 2010, the administrative resources of Daxing District and the BDA were integrated to form an industrial development pattern of "one base and six parks" with the BDA as an industrial development main platform to stimulate the planning and construction of six special parks: Daxing Biological Medicine Base, New Media Industrial Park, New-Energy-Vehicle Industrial Park, Military-Civilian Combination Industrial Park, Manufacturing Services Industrial Park and New Airport Industrial Park.



By the end of 2011, more than 4,800 enterprises from more than 30 countries and regions had come to the BDA, along with more than 100 projects invested in by 77 of the global top 500 corporations, along with high quality, domestically funded projects.



The leading industries are electronic information, bio-medicine, equipment manufacturing and automobile production industries; a communications industry cluster led by Nokia, a display industry cluster led by BOE, a microelectronics industry cluster led by SMIC, a medical equipment industry cluster led by GE, a bio-pharmaceutical industry cluster led by Bayer and an automobile industry cluster led by Beijing Mercedes have also been established.




Yanqing Park, a sub-organization of Zhongguancun Science Park, was founded in October 2010. Located in the northwest of Beijing the park covers an area of 4.91 square kilometers.



Part of the Beijing new energy base, the park has founded a high-end service industry area with the development of high-end equipment manufacturing, general aviation and modern service industries, finance and insurance background services, and research and development training.



Fangshan Park.

Fangshan Park is composed of Beijing Petrochemical New Materials High-Tech Industry Base, Beijing High-end Manufactureing Industry Base, Liangxiang Economic Development Area, Beijing Haiju Foundation and Higher Education Park. It has an area of 15.73 square kilometers.



(1) Beijing Petrochemical New Materials High-tech Tech Industry Base.

It is one of the first 62 new industrialization demonstration bases in China. It is an important carrier of strategic cooperation between the Beijing municipal government and Sinopec and one of five industry bases under planned construction in Fangshan district.



The East District focuses on fine chemistry, petrochemical new materials and crucial projects. The West District is the core area of Yanshan Petrochemical.



(2) Beijing High-End Manufacturing Industry Base.

Changan Automobile, BWI Group, China CNR Corporation Limited, National Energy and Jinpengpa Unmanned Aerial Vehicle have settled here.



The fixed-asset investment of the base is 2.21 billion yuan ($359.2 million). The annual output of the three companies that have been put into operation total around 800 million yuan



(3) Liangxiang Economic Development Area in Beijing

Established in 1992 with an area of 109.5 hectares. The development and assignment have been completed. Currently, 63 companies have settled here



(4) Industrialization base of Haiju Project

Haiju Base is a new effort to adjust the industry structure in the district. It complies with the National Thousands of Talents Plan and Beijing Haiju Project and is a focal point for leaders in the city and district.



Currently, there are eight projects in the base, including Beijing Feihang Jida Aviation Technology, the Environmental Protection of Xishan district project, Ntong Technology Co, Beijing Grish Co and Beijing Dongfang Xupu Technology Co.



(5) Liangxiang Higher Education Park in Beijing

It is one of the two higher education parks approved by the Beijing municipal government. The park is divided into the college park, central landscape area, central device area and allocation area.



There are six colleges and universities in the park. The construction of the graduate school of the Chinese Academy of Social Sciences, Beijing Institute of Technology, Capital Normal University, and Beijing Technology and Business University in the first stage has been completed with over 27,000 students and teachers. Plans are underway to construct Beijing University of Chinese Medicine and Beijing Vocational College of Transportation.



(6) Beijing Liangxiang Logistics Base

Located in Yuan Wutun village, Yancun town, Fangshan district,





A snapshot


Aptly known as the Phoenix city, Yinchuan is a city that is gradually rising into economic prominence. Located in the North West of China in the Ningxia Hui autonomous region, a third of Niangxia’s population is Muslim, compared to the national average of 1.8% in 2010. In recent years, Ningxia has been the centre of a government campaign to promote Arab investment there, resulting in promising investments and high tech development on top of the existing coal and mineral industries.


Province: Ningxia Hui autonomous region, North West China

Population: 2 million (3 million including those without residence permits)

Average residential cost: 5000RMB/sqm

Key Industries: Coal, metallurgy, Chemical manufacture, Agriculture, High-tech industry.

Provincial Government website:



Development zones


Yinchuan Economic and Technological Development Zone (YETDZ), established in 2001 is home to over 2000 enterprises, focussing on pioneering high tech progression and information industry developments to modernise existing industries. The development forms part of the national ‘Go West’ development programme (西部大开发) designed to increase the infrastructure and industrial output of inland China. The area is rated a BB standard development zone indicating the area is still in the development stage. Within the development zone are 4 sections: the Overseas Returnees Pioneering Park, the Ningxia Software Park, the Ningxia SMEs Pioneering Park and the Ningxia High- and New-Tech Pioneering Service Center.




In 2012 Yinchuan was also designated as an Inland Opening-Up Economic pilot zone. Given that Muslims make up one third of the Ningxia population, in 2013, the China-Arab States Expo was help in Yinchuan, and the government has invested in developing this area as a hub for trade between China and Arab states. This drive has resulted in rapid increase in foreign investment and trade, in 2013 the total foreign trade in Yinchuan amounted to US$2.41 billion, up 80.9% year from 2012, and 2013 Utilised FDI in Yinchuan stood at $129 million. The gross industrial output value of the zone reached RMB 23.5 billion in 2012.




In 2012 construction was begun on a new CBD in Yinchuan, with around CNY 800 million invested in the project in that year. Named the Yue Haiwan CBD, it will complement the existing development parks and forge the way for further investment and development, with a view to being specially aimed at Arab investors. In mid 2013, the CBD development had already attracted 24 projects with a total investment of 17.9 billion yuan. While Yinchuan’s existing CBD is mostly empty, the imminent opening of the new project should create a thriving hub in the heart of the city.



Key industries


Aside from the development zone, Yinchuan has a strong infrastructure of existing industries contributing to the city’s GDP of RMB 127.35 billion in 2013, up 10% from 2012 and accounting for approximately 49.6% of Ningxia’s total. In an area rich in energy and mineral reserves, the energy industry is a key source of income to the area. 9 out of 10 Chinese national coal companies have bases in Yinchuan and Yinchuan is also a centre for petroleum processing and chemical manufacture. This heavy industry realised RMB 41.26 billion in 2013, up 12.5% from a year earlier.


Yinchuan is also a hub for certain agricultural industries. It is a designated national centre for beef and mutton imports, hosting the International Beef and Mutton Industry Development Forum in 2014. Yinchuan is also the most prolific area in China for the production of Chinese wolfberry products (also known as goji berries).


Logistics hub


Located on the end of the new Silk Road and near the Yellow river, Yinchuan has become a logistics hub both for land transport into and out of China and for transport between the East and West of Hina itself. By the end of 2015, Yinchuan will be linked to the high speed rail network, further improving its transport links. The main existing railway connections are the Baotou-Lanzhou railway and Baoji-Zhongwei railway, with an average 15 hour journey from Yinchuan to Beijing.


Foreign Investment preferential policies


Article 1: All the natural resources, industries, and marketsin Ningxia except those especially stipulated by the state are open to the whole country. State-owned, collective-owned, private-operated, the three types of enterprises, businessmen working on their own, colleges, universities, and research institutes in and outside of Ningxia are welcome to carry out multi-level, multi-form, multi-factor economic and technological cooperation or run enterprises with investment of their tangible and intangible assets. The autonomous region shall render prompt, satisfactory service in registration, approval of the establishment of projects, and the creation of necessary conditions.


Article 2: Productive enterprises with exclusive foreign investment (including bases established for the production of raw materials) may enjoy exemption from the income tax for five years upon the commission of the enterprises and a refund of 25 percent of the value-added tax, urban construction and maintenance tax, tax regulating the orientation of investment of fixed assets, and house tax within a period of five years after the enterprises are in operation. They shall be exempt from the tax for the use of land during the period of construction and for another five years after they are in operation. Enterprises engaged in the development of resources shall be entitled to a refund of the resource tax for three to five years and exemption from the additional fees of the circulation tax. The income of the enterprises during the income-tax exemption period shall be regarded as duty-paid. After the expiration of tax exemption, proper tax reduction shall be granted to the enterprises which have difficulties in operation or need a large amount of investment for technical renovations and expansions. Preferential policies can be liberalized to a proper extent in Taole County and the eight counties in the mountain area of southern Ningxia.


Article 3: Productive joint ventures and cooperative enterprises newly established in Ningxia as well as key extension projects approved by the state and autonomous region with the amount of investment by outside partners accounting for more than 25 percent of the total investment and the term of joint venture and cooperation more than ten years may enjoy a three-five years’ exemption of the income tax for the newly-added economic result in accordance with the ratio of investment by the outside partners, a 25 percent refund of the value-added tax and a 50 percent refund of the urban construction and maintenance tax, tax regulating the orientation of investment of fixed assets, tax for land-use, and house tax for five years. They shall also be entitled to exemption from the additional fees of the circulation tax as stipulated by the government of the autonomous region. During the tax exemption and reduction period, the profits distributed to them shall be regarded as duty-paid. Preferential policies may be liberalized in the eight counties in the southern mountain area and Taole County to a proper extent.


Article 4: Ventures with exclusive foreign investment and cooperative enterprises (with outside partner’s investment more than 500,000 yuan and the term of cooperation longer than five years) in tertiary industry (not including the development of real estate, recreational businesses, catering industry, and hotel industry) shall be entitled to a 3-4 years’ exemption from the income tax, a 1-2 years’ refund of the business tax, a three years’ refund of 50 percent of the urban construction and maintenance tax, tax regulating the orientation of investment of fixed assets, tax for land-use, and house tax.


Article 5: Ventures with exclusive foreign investment, joint ventures, and cooperative enterprises established in the autonomous region may enjoy a 30-50 percent discount of the fixed land price for using cultivated land upon approval by the government. They shall be allowed to transfer the right for the use of land after five years of operation.


Article 6: Those engaged in the development of agriculture, forestry, animal husbandry, and fishery shall be exempt from the agricultural tax and tax for special agricultural and forestry products for six years from the year they begin to make profit. Those engaged in the development of poverty-relief projects in the eight counties in the mountain area and Taole County shall be exempt from the agricultural tax and tax for special agricultural and forestry products for ten years. The wasteland they need can be provided by means of assignment.


Article 7: Ventures exclusively with one’s own investment and proprietary cooperative enterprises engaged in highly-processing agricultural resources and the amount of investment surpassing two million yuan shall be exempt from the income tax for eight years beginning with the year they are in operation. Those with investment surpassing five million yuan may enjoy income-tax exemption for ten years beginning with the year of operation.




A Snapshot


Qingdao is one of China's most dynamic, and possibly livable costal cities. An important international trade port located along the western coast of the Pacific Ocean in the south of the Shandong Peninsula, it is a main transportation hub for Northeast Asia. The original port built in 1892, then know as Tsingtao, now connects with 450 ports in 150 countries. The city currently boast numerous development and trade zone including: National Qingdao Economic and Technological Development Zone, Qingdao High and New-Tech Development Zone, Qingdao Qianwan Bonded Port Area, Qingdao Export Processing Zone, Qingdao West Coast Export Processing Zone, Sino-Germany Ecological Park, and Jiaozhou Economic and Technological Development Zone.



With a population of just under 8 million, Qingdao is also a major National Tourism city, know for it`s restored European buildings, beaches and International Conference venues. The city hosts the China International Consumer Electronics Show (SINOCES), the China International Marine Fair, Qingdao International Fashion Week, and the Qingdao International Beer Festival annually.


In recent years, Qingdao has been positively promoting the construction of a blue economic zone (for marine sciences) and a high-end industrial cluster, to build a advanced manufacturing base lead by companies such as Haier and Hisense.





Valued at 412 Billion USD in 2011 the modern logistics industry in Qingdao has developed quickly in recent years: 6 major logistics parks, including Qianwan International Bonded Port. Four logistic centers, including the west coast export processing area, and six distribution centers, including Jiaozhou and Fu’an. Qingdao is now home to over 30 domestic and international logistics companies. Small and medium-sized logistics companies, in particular, are being actively encouraged to strengthen resource integration to meet the demands of national diversified logistics.




More than 50 million tourists visited Qingdao in 2013 catered to by over 155 star-rated hotels, including the international: Intercontinental, Hyatt, Kempinski, Accor chains. The city is currently focused on developing resort and vacation facilities and accelerating the development of Shi Laoren Resort, Phoenix Island, Langyatai, Tianheng Island, Lingshan Bay and Aoshan Mountain Hot Spring areas.


The municipal government is currently implementing plans to expand it`s port facilities to allow the city to become the `Home Port’ for a domestic cruise industry with an annual capacity of over 1 million passengers. Cruise operator Carnival expects to carry 500,000 Chinese cruise passengers in 2015, up from 350,000 this year.



Service Outsourcing.

The city currently has 167 outsourcing companies registered, employing around 30,000 university graduates, the largest seven companies accumulated accounting for over $10 million USD in revenue, including Lucent Technologies, Caterpillar, Qingdao Risong, and Unihub.


The city's Preferential Policy on Developing Service Outsourcing in Qingdao was launched in 2008, to provide financial support for the service-outsourcing sector. A supplemental policy on Service Outsourcing came out the following year to provide financial incentives to pay income and business taxes. It put more than 40 million RMB into the development of service outsourcing, a major force behind development in the city.


The city has a number of service outsourcing parks, with a total area of 1 million square meters, and more than 500 companies focusing on: software development, digital animation, data processing, integrated circuitry design and industrial engineering.



New Energy Companies.

Currently, there are five companies specializing in producing solar photovoltaic devices in Qingdao: Qingdao GIGA Solar New Energy Co (specializes in producing single crystal silicon, polysilicon, film solar cells and components). Abo New Energy Co. NESI Solar Co (solar film batteries). China Creative Wind Energy Co (on-grid wind power generation apparatus). Shandong Datang Corporation (wind power generation apparatus).



Established Industries.

Electric appliances- The leading companies, such as Haier, Hisense, and AUCMA are developing quickly and developing support companies so that, now the city has almost 1,000 supporting manufacturers, producing a range of goods.


Petrochemicals- As one of China`s major ports a whole range of companies have established industrial facilities in the city including: Sinopec Qingdao Refining & Chemical Co, Anbang Petrochemical, Huanhai Oil Technology, Yellow Sea Rubber Group, Guangming Tire, Huntsman Textile & Dying and BASF Pigment.


Automobiles - The city has 20 automobile manufacturers (18 for special models) and 260 spare-parts manufacturers, 82 of them large-scale.


Textiles and garments- The textile and garments industry has been evolving from traditional textiles to garments, household textiles, materials for fabric, dying and textile machinery which are all done in large scale production plants.


Ship and marine engineering- A ship and marine engineering area has been established on Huang Island at Haixi Bay, and at Jimo and Jiaonan. The Haixi Bay site is a production base for large barges, offshore platforms, low speed diesel machinery, large rollers, decks, ship electrical systems, and water loading. The Jimo and Jiaonan areas are bases for R&D centers for high value-added oil tanks with a 100,000-ton capacity, special ships, high-tech barge equipment, and support products. Companies, such as the China Shipbuilding Industry Corp, Branch Five, CNOOC Offshore Engineering, PetroChina Offshore Engineering, Yangfan Shipbuilding, and Harbin Engineering University research center all have facilities here.



Located near the geographical center of China but culturally part of Western China, Xining is the Capital of Qinghai province and at the heart of the governments Go West policy. With a population of about 2.25 million inhabitants about half of whom live in the main four urban areas, it is a prefectural level, third tier city with a GDP per capita of ¥19,494 RMB (US$2,800) in 2008, placing it roughly in the middle of all Chinese cities. Its main industries are currently wool spinning and textiles, fur, high altitude animal husbandry, dairy products, salt extraction & processing, Traditional Tibetan medicines, and light processing industries.


Xining has a relatively high percentage of ethnic minorities, the majority being Hui with also a sizeable Tibetan population. It is home to significant religious sites for both Muslims and Buddhists. Xining has a cold, semi-arid climate due to its high altitude.



Major Economic Indicators (2012)



Land Area (km2)




   GDP (RMB billion)



GDP Composition


          Primary Industry (Agriculture)


          Secondary Industry (Industry & Construction)


          Tertiary Industry (Service)


    GDP Per Capita (RMB)


    Unemployment Rate


    Fixed Asset Investment (RMB billion)


    Total Import & Export (USD million)


          Export (USD million)


          Import (USD million)


    Sales of Social Consumer Goods (RMB billion)


Source: Xining Economic and Social Development Report 2012


Xining has seen substantial economic growth over the past few years with 15% growth in GDP in 2012 from a year earlier. It’s GDP makes up nearly half of the total province (45.2% in 2012). In the same year, Xining’s value added industrial output rose 19.5% and foreign trade 14.5% year on year.


It is at the center of the so called Silk Road Economic Belt being a hub for both logistics and investment for increased economic ties with Central Asia. Key to this development plan is the currently ongoing Industrial Transfer process where manufacturing in the eastern costal cities are being actively encouraged to re-locate to the area, with a special focus on renewables.




One of the largest development projects in recent years was the Xining Economic and Technological Development Zone, completed in 2010. XETDZ lies in the east of Xining and is the first of its kind at the national level on the Qinghai-Tibet plateau as part of the country’s attempt to further develop the western region. XETDZ focuses on export-oriented industrial projects. It has an area of 12.8 square kilometers with a GDP over 18 billion in 2010.


Ferrosilicon, machine tools, bearings and cotton yarn are major exports of Xining. Japan, South Korea and the U.S. are the most important trading partners of the city.


The province is rich in natural resources, and current has an economy based on mineral extraction, hydropower, and Highland agro-husbandry. Oil and natural gas from the Chaidamu Basin have also been important contributors to the economy. Underdeveloped infrastructure however has thus far prohibited it from fully capitalizing on these advantages. For the future however, the focus will be very much on “Inclusive and Sustainable’ development revolving around solar, wind, and low-carbon energy projects.


Major Companies:

Qinghai Salt Lake Industry Group is a leading producer and distributor of potassium fertilizers. Headquartered in Xining, it posted RMB 5.9 billion in revenues and RMB 1.5 billion in net profits for 2010.


West Mining Co is a private company headquartered in Xining. It is engaged in the mining, smelting and trade of zinc, lead, copper and aluminum. It is China’s second-largest producer of lead concentrate. It posted RMB 18.51 billion in revenues and RMB 989.43 million in net profits for 2010. West Mining Co listed its A shares on the Shanghai Stock Exchange in 2007.


Xining Special Steel (Group) Co., Ltd. is the largest special steel enterprise in Northwest China with annual output of 400,000 tons. It produces steel bars and reinforced bars and machinery. It posted RMB 7.05 billion in revenues and RMB 233.12 million in net profits for 2010.


Qinghai Jinrui Mineral Development Co., Ltd. is principally engaged in the research, development, production, processing and sale of strontium products and castings. It was listed on the Shanghai Stock Exchange in 1996 and has total assets worth over 1.3 billion as of 2012.


Xining New Energy Development Co., Ltd. is a high-tech and joint stocking enterprises and engages in solar energy power generation. It is the largest production base of household solar energy power generation system in China.


      Golmud 200 MW PV solar plant


Qinghai Supower Titanium Co., Ltd. is the only company in Qinghai which produces and processes titanium and titanium alloy. Located in XETDZ, the company employs about 200 people with an annual output of 8,000 tons of titanium. It was founded in 2008 and has a registered fund of RMB 240 million.


Qinghai Huanghe Hydropower Development Co. Ltd. is a comprehensive energy enterprise focused on the development and construction of power stations as well as the production and sale of silicon products and solar power generating equipment. It was established in 1999 under China Power Investment Corporation and now has total assets worth over 57 billion RMB.



Xining is rich in mineral resources. Its reserves of potassium, magnesium, lithium, iodine, natural sulfur, silica and asbestos rank the first in China.



As a provincial capital, Xining is the center of education of the province. As of the end of 2012, the city had 9 colleges and universities with a total of 61,858 students. The major universities include Qinghai University, Qinghai Normal University, and Qinghai University for Nationalities.



Xining's main station is the first stop on the Qinghai-Tibet train line. This line, completed in 2006, is the world’s highest railway. As a result, Xining has considerable tourism from travelers passing through on their way to Tibet, especially as this is considered the best place to start the journey in order to acclimate to the altitude. Xining is also the connecting point for trains heading the opposite way on the Lanzhou-Qinghai Railway.


The main station has almost been completed for the high-speed rail link to Lanzhou and Urumqi, with construction due to finish in August.


Xining Airport (IATA: XNN) is located about 30km east of downtown Xining. It has 13 airlines operating out of it heading to more than 20 domestic destinations and Hong Kong.


There are long distance buses out of Xining to about ten surrounding cities ranging from 4-20 hours away. These buses run on China National Highway 214 out of Xining.


Within the city there is a low-cost bus system (flat-rate 1 RMB) that runs until about 9 p.m., sometimes ending earlier in the winter.



Xining is a popular tourist destination in the summer, especially as it is an important religious location with the Ta’er Monastery(one of six famous monasteries in the Gelugpa Sect of Tibetan Buddhism) and the Dongguan Mosque (one of the most famous mosques in the northwest region of China).


Tourism is also an important pillar in Xining. In 2012, it hosted 11.28 million tourists, with a tourist income of RMB 7.52 billion, up 33.9% year on year.


History and Culture

There are about 37 nationalities living in Xining, though only a few groups are numerically significant. According to the 2010 Census, Han Chinese make up 74.04 percent of the total population of Xining, while Hui (16.26 percent), Tibetan (5.51 percent) and Tu (2.6 percent) are the main minority groups in the city.


Xining has a history of over 2,100 years and was part of the Northern Silk Road. It was also significant as a western stronghold against foreign attacks in the Han, Sui, Tang, and Song dynasties.




For years, investment opportunities in China seemed restricted to bustling coastal cities like Shanghai, Shenzhen, and Guangzhou. The Chinese hinterland—where the bulk of the world’s largest population resides—received comparatively little attention.


Over a decade into the 21st century, the situation in China has changed. Previously emerging markets on the east coast have become  increasingly  saturated,  leading  savvy  investors  to  look  elsewhere.  Meanwhile,  infrastructure  investment  and favourable economic incentives have transformed China’s vast hinterland, opening up opportunities in cities most investors previously never knew existed.



Wuhan City                                                                                    Wujiashan Taiwan Development zone


Most  investors know that inland China has tremendous economic potential. What  most people don’t understand are the practical mechanics of accessing these increasingly vibrant engines of growth.


Wuhan —central China’s largest metropolis and a city at the nexus of China’s transport network. Once billed as the “Detroit” of China due to its massive auto manufacturing industry, Wuhan has reinvented itself for the 21st century as an environmentally-friendly venue for high-tech investment.


A Snapshot


Compared with similar size cities around the globe, Wuhan could seem awkward. Larger than London or New York, having over 1 million university and college students alone, yet with only three metro lines. Wuhan, as a city, started to exist only in 1926, when three ancient towns, Wuchang, Hangkou and Hanyang, were conjoined. Wuchang, by using its favorable position on the Yangtze River has always been a busy port. Nowadays, Wuhan’s position as a transportation hub is even stronger, as it lies on the two most important railway corridors in China, Shanghai-Chengdu and Beijing-Guangzhou and is the biggest inland port in the country. This has allowed the city to become a hub for major delivery and shipping companies.



Today the city offers a lot more, besides good transportation links. Wuhan is the largest city in central China, with the population of 10.5 million, 5th largest in the country. The city has seen its GDP grow by 10-12% each year reaching 900 billion CNY ($144.3 billion) in 2013, the 9th highest in the country. According to reports, it is one of the fastest growing cities globally in terms of GDP. Wuhan is also a burgeoning high-tech city, with 3 Special Development Zones and a Pudong-style skyline in the planning stage. According to British government estimates, ¥3.9 trillion ($625 billion) will be invested in Wuhan’s infrastructure by 2030.



State-level special industrial zones could be considered as Wuhan’s economic backbone. Both foreign and domestic companies have been taking advantage of them for the last two decades.



Wuhan East Lake Hi-Tech Development Zone (EDZ) includes many opto-electronics, telecommunications, biotechnology, laser and engineering companies from China and abroad. Enterprises receive tax breaks, subsidies for exports, and priority in government procurement. All Wuhan registered companies can receive subsidies for hired experts and office space. From these industries its optical telecommunications that are the pride of the EDZ, as the largest fiber-optic cable manufacturer and the largest research institute in China are located in the zone.



The original Dongfeng Motors’ production site and headquarters are located in Wuhan Economic & Technological Development Zone (WEDZ) making it one of the most automotive industry-concentrated areas in China. Honda and Peugeot-Citroen cars are manufactured here, as well as various domestic brands. Another pillar of industry in the WEDZ is electronics manufacturing, as it is one of the main production sites for LCD monitors and air conditioners in China. The zone also has a packaging, biopharmaceuticals, food and resources & materials industrial cluster, as well as industry parks designated for French and Japanese enterprises.


                                                The Citroen production line in Wuhan


The latest, Wuhan Wujianshan Economics and Technological Development Zone is mostly dedicated to Taiwanese-funded enterprises and is aimed to become the largest Taiwanese businesses’ cluster in Central China.



Wuhan loves all things French. According to Hubei government’s statistics, a third of the ¥144 billion ($23.2 billion) French FDI in China is invested in Wuhan. More than 80 French companies have a presence in the city; a rate higher than anywhere else in China. According to France’s Consul General in Wuhan, the partnerships started with the Peugeot-Dongfeng joint venture in the early 90s and intensified after Sarkozy’s visit to China in 2007. French companies are mostly focused on construction, waste processing, energy, transportation and retail industries. Prominent enterprises in Wuhan are Peugeot-Citroen, AXA, and TOTAL. GE as well as General Motors also have production facilities in the city.



However Wuhan`s greatest draw is Education, the city has over 1 million students, more than any other in China, enrolled in more than 80 higher education institutions. Furthermore, Wuhan University, Wuhan University of Technology and Huazhong University of Science and Technology (HUST) constantly appear in Chinese and Asian universities’ leagues tables’ top positions. Finally, there are plenty of national research centers and laboratories, most of which closely work with private enterprises in the city.



Wuhan is planning to seriously change its skyline and become the Shanghai of Central China. The development projects are just stunning. When it comes to super-tall skyscrapers (over 300 meters), there are 4 being built at the moment, and more than 10 proposed to be built, not to mention countless skyscrapers under 300 meters. The most noticeable one is Greenland Centre, a 636-meters tall multifunctional building, which eventually should become China’s third tallest building. It is estimated to cost around ¥30 billion ($4.8 billion) and to cover the area of 300 thousand square meters. Another project is Riverview Plaza (Wuhan Tiandi A1), a 460 meters skyscraper in Yongqing area. The whole Tiandi project is also estimated to cost about ¥30 billion, but cover a larger area of 1.5 million square meters. Shanghai’s Xintiandi reconstruction was done by the same developer – Shui On Land, with some of the same architects working on the project. Wuhan Center will be part of Wuhan’s CBD district, the 438-meter super-tall will be the first to be built among Wuhan’s skyscrapers and be the first building in the city to break 400 meter mark. To service these buildings the Metro will see a further extensions of the current lines, 4 new ones currently being under construction (to be completed in 2017 and another 6 in the planning phase.



                                    The proposed CDB area development


Wuhan’s expansion plans are very ambitious and the city wants to compete with the likes of Shenzhen or even Shanghai and Wuhan might just become one of those global cities due to its strategic geographic location: a 2-hour or shorter flight time from all other major Chinese cities to Tianhe International Airport and its shear audacity in its ambition.



Due to its large volume of University graduates both the municipality and provincial governments are determined to provide as many jobs as there are graduates to further fuel growth.. This can only contribute to the growing investment of foreign enterprises looking for a relatively cheap and skilled workforce.



However although the ambitions to build skyscrapers are high, the majority of them are still at the proposal stage, which makes any development plans susceptible to a slowdown in the economy. Moreover, there is no clear, public data on occupancy rates of recently built and under construction buildings.



As with many developing cities a major problem is pollution: a few weeks ago “water panic” erupted in the city, as the public water supply was cut due to an excess of chemicals in the supply as well as the ever prevalent API figure.



Government Policy and Investment Incentives


The Wuhan municipal government offers certain incentives to both wholly-owned foreign enterprises and Sino-foreign joint ventures invested in the city. These incentives, once limited to export-heavy industries,  have  expanded  to  include  a  wider  variety  of  industries  in  the  years  following  China’s accession to the World Trade Organisation.


Wuhan has tied incentives into industries that establish themselves inside one of the city’s economic development zones. These development zones, of which the two largest are the Wuhan East Lake High- Tech  Development  Zone  and  the  Wuhan  Economic  and  Technological  Development  Zone,  offer additional advantages to firms that include proximity to transport modes and access to a large pool of qualified university graduates.


In general, most investment-incentives accorded to firms operating in Wuhan come in the form of tax relief. According to the Wuhan municipal government, the following incentives are available to foreign invested enterprises:


1      Full exemption from 30 percent corporate income taxes, 20 percent withholding tax, and 3 percent local corporate income taxes

1.1      A permanent corporate income tax holiday is available to foreign financial institutions for interests on loans to the Chinese government and to China’s National Bank- these are available for profits derived from royalties on technologies deemed to be advanced

1.2      A five-year corporate income tax holiday is available for the first five profitable years of Sino-foreign joint ventures in energy, transport, and infrastructure with an operating term of at least 15 years. The holiday is also available for the first five profitable years of approved integrated circuit manufacturers with an operating term of at least 15 years.

1.3      A two-year corporate income tax holiday is available for the first two profitable years of investment for high-tech industries located in Wuhan’s development zone. It’s available for the first two profitable years of approved integrated circuit and software enterprises.

1.4      Exemptions  from  a 20  percent  standard  withholding  tax  are available  for:  foreign investors’  gains secured by the right to share profits by proportion of investment, stock rights, or other non-creditor rights business; for interest on loans by international financial institutions to the Chinese government and China’s National Bank; for interest at preferential rates on loans to China’s National Bank by foreign banks;  and  for  gains  from  chartered  rights  and  use  fees  acquired  by  providing  special  approved technology for scientific research, energy exploitation, and transportation development.

1.5      Exemptions from a 3 percent local corporate income tax are available for all investments which qualify for federal corporate income tax exemptions or reductions.


2      Concessionary Tax Rates


2.1      A six year 7.5 percent tax rate is available for profitable years six through eleven of high-tech industries located in Wuhan’s development zones.

2.2      A five-year 7.5 percent tax rate is available for profitable years six through ten of approved integrated circuit manufacturers with an operating term of at least 15 years and is available for years six through then of infrastructure construction projects.

2.3      A one-year renewable 10 percent tax rate is available in Wuhan’s  development zones for profitable years after the tax holiday and reduced rates have expired for companies exporting more than 40 percent of total production in any given year. The rate is also available in the development zones for profitable years after the tax holiday and reduced rate have expired, and for companies exporting more than 70 percent of total production in any given year.

2.4      A continuous 10 percent tax rate is available for profits derived from royalties on technical knowledge from scientific research, exploitation of energy resources, development of the communications industry, agricultural, forestry, and animal husbandry production. The rate is also available to software companies deemed to be key enterprises by the state, regardless of their location, when other preferential tax rates no longer apply.

2.5      A continuous 15 percent tax rate is available for investments in manufacturing located outside of the special zones for companies engaged in high-tech projects, energy, communications, and port construction, or having a value of more than USD 30m with a long investment payback period. The rate is also  available  for  high-tech investments in the  development zones after  the  initial tax  holiday  and reduction periods expire, and for approved integrated circuit manufacturers, regardless of location, that do not qualify for other preferential tax rates.

2.6      A continuous 24 percent tax rate is available for foreign investments in manufacturing not listed above that have an operating term of over 10 years.


3      Income Tax Deductions, Allowances, and Credits


3.1      Income tax losses can offset the following year’s gains. A ‘carry forward’ of any unused portion is permitted for up to five additional consecutive years.

3.2     Accelerated depreciation is available for software and for machinery and equipment of approved manufacturers of integrated circuits.

3.3      Software and approved integrated circuit enterprises may be eligible for a tax deduction of 50 percent of research and development expenses incurred during a single year, provided that those expenses exceed the previous year’s research and development (R&D) expenses by not less than 10 percent

3.4      Foreign investors reinvesting their share of profits in the same investments or in new businesses that employ advanced technologies, with an operating term of at least five years, may receive a refund of 100 percent of the income tax already levied on the reinvested amount

3.5      Foreign investors reinvesting their share of profits in the same investments or in new businesses not employing advanced technologies, with an operating term of at least five years, may receive a refund of 40 percent of the income tax already levied on the reinvested amount.


4      Non-income Taxes


4.1      Exemptions from the Value-Added Tax (VAT) are available for imported goods used in the processing of export products and to approved integrated circuit manufacturers and software enterprises for the import of raw materials for production and consumption goods for their own use, and for the import of technology and special equipment necessary to production.

4.2      Rebate of a portion of the 17 percent VAT paid by software manufacturers: the amount of VAT in excess of 6 percent charged to integrated circuit manufacturers for the sale of IC products may be rebated until the end of 2010, provided the differential is used for research and development or expanded production of software products. The rebated amount may be treated as tax-exempt income for income tax products

4.3      Rebate of a portion of the 17 percent VAT paid by software manufacturers: the amount of VAT in excess of 3 percent charged to software manufacturers for the sale of software products may be rebated until the end of 2010, provided the differential is used for R&D or expanded production of software products.The rebated amount may be treated as tax-exempt income for income tax purposes


5      Visas and Work Permits


5.1      Employees engaged in major high-tech projects, and employees and senior managers of large-scale investments may receive multiple-entrance visas.

5.2      Employees engaged in major high-tech projects, and employees and senior managers of large-scale investments may receive residency permits of a duration lasting from 3 to 5 years.


Wuhan Municipal Government website (Chinese):

And its English version: 



A Snapshot.

Big, bustling, and growing, Chengdu has emerged as one of the most dynamic cities in the Chinese hinterland and is an increasingly essential gear in the nation’s economic engine. As the capital of Sichuan Province—among the most populous in China—Chengdu has become a centre for both business and logistics in western China. The city, once a backwater lagging far behind its coastal counterparts, has now firmly arrived on the business scene.



The rise of Chengdu is due to the convergence of two distinct, but related, factors. One is the Western Development  Strategy,  in  which  Chengdu  figures  prominently  as  a  key  city.  In  an  effort  to  spread economic growth more equitably within the country, Beijing allowed cities like Chengdu to offer foreign firms extensive  investment  incentives,  spurring the interest of multinationals and small  to medium enterprises (SME) looking to lower costs.


The second factor attracting outside investment to Chengdu is its vast supply of cheap and talented labour.  As  the  city  turned  its  focus  toward  high-tech  industries,  local  universities  developed  well- regarded programmes in IT, churning out a pool of qualified workers. The low cost of living in Chengdu allowed producers to benefit from lower labour costs, with average salaries for skilled labour lower than cities like Beijing, Shanghai or Shenzhen. The ensuing cost-benefits have drawn major investors like Intel, Toyota,   and   Motorola,   reinvigorating   the   once  neglected backwater.


One factor that historically limited development of the city was the high transport cost for primary and secondary sectors. This has however in many ways become a blessing in disguise. Lacking adequate containerised rail infrastructure or the proximity to ports that cities like Shanghai enjoy, Chengdu was forced to focus on development of service industries and high- value manufacturing such as semi-conductors and pharmaceuticals. Industries which are less dependant upon cheap transport costs may insulate the city from the global downturn  –  in  stark  contrast  to  regions  heavily  dependant upon low cost manufacturing such as Guangdong.


With both the Central and Provincial governments working hard to improve the overall investment environment  of  the  city,  and  the  province  at  large,  huge  sums  are  being  invested  in  financing construction  of  several  major  intercity  highway  and  rail  networks.  Within  the  city  limits  itself, construction is underway on its metro system.



                                          Expanding rail capacity


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