Investment Environment

　　Quzhou municipality is situated in the west of Zhejiang Province, adjoining Fujian, Jiangxi, Anhui province, called "the thoroughfare leading to four provinces", and connecting with developed area and developing area. With a subtropical monsoon climate, Quzhou has sufficient sunshine and rainfall. Its yearly average temperature is between 16.3-17.3 Celsius degree and precipitation 1,843 mm, no-frost periods 251-261 days. The municipality covers an area of 8837 square kilometers, with a population of 2,450,000.

　　Six counties (cities, districts), such as Kecheng district, Qujiang district, Jiangshan county-level city, Changshan county, Kaihua county, Longyou county are under its jurisdiction.

　　Quzhou has long been known as the thoroughfare leading to four provinces. The transportation is very convenient. The municipality has various transport facilities with railway, the Hangzhou-Jinhua-Quzhou expressway, highway, water transportation and civil aviation in full play. Quzhou has initially formed its transportation circle of about 3-hour ride to Ningbo and Shanghai, 2-hour ride to Hangzhou and half-hour ride to each pertaining counties. And its transportation advantage will be further strengthened with the accomplishment of the Jiu-Jing-Qu Railway, Huang-Qu-Nan Highway, Long-Li-Wen Highway, and Hang-Xin-Jing Highway as well as the construction of Qu River Channel Dredging Project.

　　Quzhou is bestowed with rich resources, whose natural resources, mineral resources and labor force resource all come out top in Zhejiang Province. So far more than 50 kinds of minerals have been explored and verified, limestone,  granite, marble, bone coal, bauxite, fluorite rank the first concerning reserves in Zhejiang province. Its stone coal and limestone reserves account separately for 3/5 and 1/3 that of the whole province. Quzhou, as the source of Qiantang River, is also a national ecology demonstration area, one of the nine areas throughout China that see favorable ecology, and one of twelve areas that enjoy biological diversity of international significance. It is an ecological barrier for Zhejiang Province, whose forest coverage rate is 71%, water resources occupies 10% that of the province with water amount per capita almost twice of the provincial average level. Per capita land resources also ranks front in the province, with per capita agricultural acreage well above the provincial level. Quzhou is bestowed with rich labor resource, enjoying 1.60 million high-qualified labor force from villages and towns.

　　Founded in Dong Han Dynasty, Quzhou is the national-level historical and cultural famous city and has a history of more than 1813 years. The Nanzong Confucian Temple is one of the only two Confucian Temples remained in China, while Lanke Mountain is the important cradle of go (a kind of chess) culture. In the beginning of 2006, Quzhou was titled "National Excellent Tourism City", whose beautiful scenes of green hills and blue waters can be demonstrated by Longyou Rock Cave, Jianglang Mountain, Confucian Temple, Lanke Mountain and Source of Qiantang River, each representing the unique feature of "saint, divinity, oddness, comeliness, mystery and source".

　　In 2005, the GDP of Quzhou reached 32.554 billion yuan, an increase of 13.6% compared with last year. The governable income reached 13006 yuan, an increase of 13.3%. The investment in fixed assets of the whole society reached 21.2 billion yuan; Import-export volume and total export have increased respectively among them by 16.2% and 36.7%. The actual foreign capital increased by 88.8%

　　At present, Quzhou enjoys the most favorable policy to invite investment: relatively abundant land resources, reliable and stable electricity supply, easy access to communication and internet, superior ecological environment, grade one surface water quality, fast development in water supply and smooth logistic. Quzhou is an ideal place for investment where enterprises can enjoy low operation expenses and efficient government services: 1. the newly-built Quzhou Administrative Service Center can offer whole-day one-stop service that is standardized, qualified and efficient. 2. Apply parallel-typed examination and approval system to foreign-funded enterprises.

Preferential Policy

　　Quzhou Municipal Party Committee and Government have attached great importance to the utilization of foreign capital: apart from being actively involved in the construction of an excellent environment, the municipal government issued in 2005 No.20 File "Opinion to Further Strengthen the Utilization of Foreign Capital",  which stipulated that enterprises with foreign investment can be granted following supports apart from national or provincial preferential policies:

　　(a). Encourage foreign investor to set up new enterprises (including enterprises engaged in agricultural products) in each development zone and park, offer 20-30% land price discount on the basis of their actual foreign investment scale. "Special negotiation for special issue" policy can be applied to World Top 500 Enterprises or projects with actual foreign capital utilization surpassing USD 13 million (include USD 13 million), so that more favorable land price can be offered. At the same time, its value added tax and sales tax within 6 years from the year of approval for establishment of the enterprise and the income tax within 11 years from the profit-making year that are retained in the development zones and parks will be wholly returned to the enterprises. The enterprises can at the same time enjoy preferential income tax time limit regulated by the state law.

　　(b). Encourage enterprises to increase their capital and enlarge stocks. If the enterprises increase foreign capital by over USD 1.50 million to enlarge its registered capital and investment scale, the local finance will return 15% of the increased value added tax (if that of this year exceeding last year¨s) that are retained in the local finance for successively 3 years.

　　(c). Encourage foreign investors to set up certain-scaled commercial, logistic services, agricultural and tourist enterprises as well as schools and hospitals. Hotels above three stars with actual foreign capital utilization over USD 3 million, large supermarkets with business area over 8,000 square meters and modern logistic projects with actual foreign capital utilization over USD 1.50 million can regain 15% of the levied value added tax and sales tax retained in the local finance within 3 years since the project is approved for establishment, as well as 30% of the levied income tax retained in the local finance within 3 years since they are put into production. Hospitals, schools and environmental protection project with actual foreign capital utilization over USD 2.00 million and modern agriculture projects with actual foreign capital utilization over USD 1.50 million can regain 30% of the levied value added tax and sales tax retained in the local finance within 3 years since the project is approved for establishment, and 50% of the levied income tax retained in the local finance within 3 years since they are put into production. For investment in scenic areas (spots), the above-mentioned preferential award for sales tax, value added tax and income tax will be prolonged for another one year.

　　(d). Encourage foreign investment in infrastructure projects like transportation, water conservancy, city construction, etc. Their preferential treatment can be determined by the municipal government as per "special negotiation for special issue" policy.

　　Above-mentioned tax award can be separately fulfilled according to present taxation subordinate relationship. All of the related enterprises may choose the most beneficial award instead of enjoying all of them at the same time.

　　(e). Export enterprises are encouraged  to grow large and strong. New point of growth for imports and exports should be fostered. The Municipal government issued "Several Opinions Regarding the Further Promotion of Foreign Trade Development",  which stipulated: four-level increase reward, i.e. RMB 400, 550, 600 and 700 for each USD ten-thousand export, will be offered to export value ranging from USD 500 thousand to 5 million. For the processing trade export, after the amount calculated on the basis of the increased value canceled after verification by the Customs, each USD ten thousand will be rewarded RMB 1000; for the export of agricultural products and finished products, each USD ten thousand will be rewarded RMB 200; for enterprises in municipal economic development zone, they will be offered another RMB 300 by the development zone committee apart from above-mentioned awards. For enterprises importing sophisticated equipment and technology for self use, they will be awarded RMB 200 for each USD ten thousand as per customs statistics.

　　(f). Encourage the development of manufacturing industry. The municipal government issued No. 50 File "Several Opinions Regarding the Enforcement of Prospering the City with Industry and Speeding up the Construction of Quzhou Manufacturing Base", which stipulated as follows: related preferential policies and awards should be granted for registration, examination and approval and technical innovation. Subsidize equipment investment: for those "410 Engineering￣ projects accorded with industry planning and in favor of industrial colony and upgrade, the local government will award 2% of the introduced equipment value when the project is put into production (award 3% of the value for particularly important projects, high-tech projects, and projects with large industrial association). Encourage enterprises to grow large and strong and strengthen technical innovation support: for enterprises introducing international advanced technology and purchasing sophisticated equipment from both home and abroad, they can be awarded 2% of the equipment value from the local government when the project is put into production. Encourage enterprises to build famous brands: for those titled "Well-known Trademark in Zhejiang Province" and "Famous Brand in Zhejiang", the local government will award RMB 100 thousand; for those titled "National Well-known Trademark" and "National Famous Brand", the local government will award RMB 500 thousand. Encourage enterprises to exalt industrial competitiveness and form an industrial colony with certain association degree. For leading enterprises with sales volume surpassing RMB 500 million and contribution over RMB 10 million to the local fiscal revenue, the local government will give an award of RMB 300 thousand.

Quzhou-featured Industry

　　The industry in Quzhou sees solid foundation, complete varieties, and healthy development momentum. The municipal party committee and municipal government are carrying out "410 Engineering" Projects, that is, to foster and establish four national manufacturing centers of fluorization industry, organic amine, mine pneumatic machinery, organosilicon & monocrystalline silicon, to construct ten featured industrial bases of new-style dry-method cement, electric light source, top-grade specialized paper, metalwork, electric transmission and transformation equipment, fine chemical industry, calcium product, bamboo and wood processing, fire-fighting equipment, and bee products, as well as to bring the preferential support for financing, land use and electricity supply for "410 Engineering" Projects. By doing so, the regional-featured competitiveness can be promoted, and the epoch-making economic development can be expedited. The municipal government will focus on the industrial development of fluorination industry in Quzhou High-Tech Park and mine pneumatic machinery, metalwork, electric transmission and transformation equipment in Quzhou Economic Development Zone. In 2005, the total output value of fluorination industry reached RMB 4.4 billion, and that of metalwork RMB 4.7 billion, both of which have become the mighty engines promoting our economic development.

　　According to the "410 Engineering" development planning, the mine pneumatic machinery industry will be mainly laid out in Quzhou urban area and form a characteristic industrial zone with the development zone as the center. By 2010, mine pneumatic machinery industrial colony in Quzhou will have occupied certain scale and obtained relatively strong competitiveness, with sales income exceeding RMB 5 billion. A structure of national technology research and development center, product manufacturing center, market transaction center and information center for mine pneumatic machinery industry will have been initially taken shape. Air sinker and monomer hydraulic prop have occupied over 60% of the domestic market; rock drill, rock drill cart, drill, air compressor for industrial purpose have occupied over 20% of the domestic market.

　　Electric transmission and transformation equipment industry will be mainly located in the two industrial belts of Quzhou urban area and the city of Jiangshan , where four industry chains of complete set of switch control equipment, transformer, components and parts for high-voltage electrical apparatus and wire & cable will be established. By 2010, there will be 3 to 4 large-scaled enterprises. Sales income of above-scale enterprises will reach RMB 3 billion, occupying over 35% that of the whole mechanical industries in Quzhou.

　　Metalwork industry will principally be spotted in Metalwork Park, Donggang Industrial Park, Changshan Industrial Park, Jiangshan and Longyou to form a producing distribution situation of "Three Parks and Two Places￣. By 2010, there will be 5 industrial colonies that is basically accorded with advanced manufacturing base, over 5 industrial backbone enterprises, including one with sales income surpassing RMB 5 billion and four surpassing RMB 500 million. Sales income of above-scale enterprises will reach RMB 15 billion.

　　Quzhou is one of the main agricultural product manufacturing base in Zhejiang, whose subsidiary agricultural products like orange, bamboo, wood, and tea take an important place in the province. Quzhou has won as many as 17 titles for its special agricultural products like "Hometown of Organs in China" "Hometown of Shaddock in China", "Hometown of Honeybee in China￣. By 2010, the bee industry will obtain output value of over RMB 1 billion, including RMB 185 million from apiculture and RMB 815 million from honeybee product processing.

The Important Investment Zones

　　Quzhou Economic Development Zone

　　Quzhou Economic Development Zone, the provincial level one, is a new modern comprehensive district of Quzhou city. It covers an area of 48.5 square kilometers including industry area, business and trade area, storehouse area, etc. The railway freight yard, container transportation station, three transformer stations and water supply system with capability of 0.1 million tons daily have been set up here. For ten years' developing, some advantage industries such as machinery, fashion, food processing, electronics have been formed. Living facilities are also available such as apartment building, hotel, bank, school, hospital, entertainment center and gymnasiums etc.

　　Shengjia Economic Development Zone

　　Shengjia Economic Development Zone is approved to be a provincial one by Zhejiang provincial government in Nov.1993. The planned area is 6.8 square kilometers. It is an important place for industry developing and for opening up. It is located in the east suburban of Quzhou city and transportation is very convenient. For ten years' developing, the infrastructure is being perfected, and the zone has formed the patterns of one zone with several parks such as ecological industry park, farm products processing park, paper products processing park, etc.

　　Jiangshan Economic Development Zone

　　Jiangshan Economic Development Zone belongs to the government of Jiangshan city. It has an area of 7.76 square kilometers. The purpose of the zone is to develop the outside-oriented industrial bases. At present, the zone is developing a special industrial park covering an area of 7.0 square kilometers. Various of land for industry building, storehouse is available, and the main industry of which is fine chemical.

　　Quzhou High-techIindustrial Park

　　Quzhou high-tech industrial park is a provincial-level one. The planned area is 9 square kilometers including 2 square kilometers Sino-Russia science and technology cooperation base which is approved by national science and technology department. The park is divided into producing areas and scientific research aereas such as Sino-Russia science and technology cooperation base, pioneer service center (incubator), fluoro-chemical district, fine chemical district, bio-chemical district, electric and machine industrial district and other high-tech industrial districts.

　　Quzhou West District Administrative Committee

　　West District, which has a  planned area covering 30 square kilometers, will be the center of politics, culture, finance, business, commerce, logistics of Quzhou as well as an optimal choice for habitation in the near future. The construction started up in 2002 has seen the initial accomplishment of infrastructure like transportation network and water and electricity supply in the Stage I planning area of 10.4 square kilometers,  as well as the entire commencement of the construction of educational parks and administrative centers. In addition, over 20 large-scaled public utilities projects have set about construction, a large batch of projects including hospital, hotel, school and emporias are under hot investment inviting. A brand-new modern city is emerging from the west shore of the Qujiang River.

Introduction of Huzhou-featured Industries

　　In 2005, major enterprises of Huzhou¨s four hi-tech manufacturing industries, including chemical and mechanical, construction material, new textile as well as electromechanical industries, achieved a total sales revenue of RMB 53.2 billion that accounts for 58% of that of major enterprises citywide. Major enterprises in ten other manufacturing industries including biochemical industry is expected to have a sales revenue of RMB 47.2 billion that accounts for 52% of that of major enterprises citywide. The manufacturing bases of metal piping industry, stainless steel industry, quality cement industry, distinctive electromechanical industry, modern seating industry and others have basically been established. The production facilities of Shenghua Biok¨s colistin sulfate premix and flavomycin, Jiuli Steel¨s continuously cast and rolled stainless steel with an annual output of 200,000t, Jinzhou Group¨s 630ERW high-frequency butt welded pipes with an annual output of 300,000t and other high-standard big projects have been launched into production and substantially accelerate Huzhou¨s industrial restructuring.

　　During the ＾Tenth Five-year Plan" Period, Huzhou has strived to accelerate the conglomeration of similar industrial enterprises. Firstly, the two industrial belts of Southern Taihu and Linhang Industrial Belts have been established where various industrial development zones and parks have got onto the fast track of development. Their industrial output now occupies a bigger share in the total of Huzhou. Secondly, a lot of counties with high industrial output have also been created based on such development zones and parks. Year 2005 witnessed 12 towns with sales revenues up to RMB 5 billion and 4 towns with sales revenues up to RMB 10 billion. Thirdly, conglomeration of similar industries has been well realized. The 46 industrial conglomerations generated an average sales revenue of RMB 2 billion each, of which Zhili kidswear, Nanxun wooden flooring, Deqing biomedicine, Changxing cement (clinker), Anji seating, water treatment equipment of Huzhou Economic and Technological Development Zone have a big market share and influence nationwide.

　　1. An annual output of 2 million storage batteries with an annual sales revenue of RMB 270 million (Year 2002, same for the following figures); leading enterprises include Tianneng, Chaowei, etc. Tianneng¨s storage batteries for electric bicycle are the best seller with a market share of over 50% in China.

　　2. An annual output of 80,000 tons of electromagnetic wires with an annual sales revenue of RMB 1.44 billion; leading enterprises include Xiandeng, Great Wall, Hongbo, etc that have a total of 10 cutting-edge production lines imported from Austria and 5 sets of oxygen-free copper continuous casting machine. This industry enjoys advantages in scale, equipment and brand and occupies 16% of the domestic market.

　　3. An annual sales revenue of RMB 600 million from motorcycles and their chains and other components; leading enterprises include Shuangshi whose motorcycle transmission chains have a 60% market share in China.

　　4. Other industries including abrasive powders and grinding tools, painting equipment, household micromotors, etc also enjoy apparent advantages. For instance, the leading enterprise of abrasive powders and grinding tools is the biggest manufacturing base in Eastern China that occupies 90% market share of China and has the biggest output in the world.

　　5. Xinminghui, Huaying and other leading enterprises of microwave indicator lights, infrared lamps, light bulbs, glass tubes and other electric light source products achieves an annual sales revenue of RMB 160 million, which makes Huzhou an industrial base of such products in Zhejiang Province. This industry is well-furnished with cutting-edge equipment. The output and sales revenues of indicator lights are leading in China with a market share of 70%; infrared light bulbs 40% and glass tubes 10%.

　　6. Swivel chairs and components: leading enterprises of Chaoya, Dakang, etc achieve an annual output of 10 million chairs with an annual sales revenue of RMB 150 million that accounts for 40% of domestic market; this industry is furnished with such state-of-the-art equipment of automatic edge-bonding machine, automatic feeding machine, static electricity laminating machine, etc.

　　7. Anji Village is renowned for its bamboo products including bamboo mats, bamboo wires, bamboo flooring, bamboo fabrics and bamboo craftworks with an annual sales revenue of RMB 2.2 billion. There is a multitude of enterprises here and the export market is also looking up.

　　8. There are also 1,200-plus production enterprises of various other products like leather products with an annual sales revenue of RMB 1.24 billion. There is an annual output of 10,000 units of pianos with an annual revenue of RMB 150 million.

Contact:

　　Quzhou Foreign Trade & Economic Cooperation Bureau
　　Mr.Yongming Jiang
　　Tel: 0570-3022439
　　Fax: 0570-3022709
　　E-mail: qzjym2003@sina.com