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Introduction to the Investment Environment of Jiaxing

Jiaxing lies in the central region in the Yangtze River Delta in China's southeast coastal area. It is 90 km from Shanghai and Hangzhou and 70 km from Suzhou. Jiaxing is one of the regions with the greatest economic vitality and development potential. Jiaxing covers a total land area of 3,915 sq. km and has a population of 4.5 million.  Under its jurisdiction are two districts, Nanhu and Xiuzhou, three county-level cities, Pinghu, Haining and Tongxiang, and the two counties, Jiashan and Haiyan.

Jiaxing's total GDP in 2005 reached RMB 115 billion, an increase of 14% over the previous year. The per capita GDP of registered population was over USD 4,170. The per capita disposable income of urban residents was RMB 16,000 , while the per capita income of rural residents was RMB 8,000. The economic output is No.41 among cities above prefecture-level in China. All its five counties (county-level cities) are among China's top 30 counties.

Jiaxing is a renowned historical town with rich cultural heritage. It is scattered with cultural sights and full of the charms of a watery town. Jiaxing's culture features an integration of history with tides, lakes, rivers and the sea, among which are: South Lake Resort and Xiangjiadang Lake in the urban district, the ancient town of Xitang in Jiashan, the historical town of Wuzhen in Tongxiang, South Lake Revolution Memorial Hall, Former Residence of Mao Dun, Former Residence of Shen Junru and Mo Family Manor in Pinghu in addition to the South Lake revolutionary culture, sericulture & silk culture and the lantern culture in Xiashi.

Historically, Jiaxing nurtured numerous talents and celebrities, leaving behind a great number of historic residences and memorial halls. Among the over 1,800 celebrated figures recorded in the China Encyclopedia, more than 80 were native Jiaxingnese, for example, the famous poet Liu Yuxi and the famous minister Lu Zhi in the Tang Dynasty, the renowned calligrapher and painter Wu Zhen in the Yuan Dynasty and, more recently, celebrated people such as Mao Dun, Shen Junru, Wang Guowei, Zhang Leping, Feng Zikai, Xu Zhimo, Jiang Baili, Jin Yong and Qian Juntao.

Jiaxing is an important energy base in east China. Already put into operation are the first phase of Qinshan Nuclear Power Station with a generation capacity of 300 thousand KW, the second phase with 600 thousand KW and the third with 750 thousand KW, plus the first phase of Jiaxing Power Plant with a generation capacity of 300 thousand KW and the second phase with 600 thousand KW. The total generation capacity will reach 6 million KW when all phases are completed. There are altogether 7 water plants in Jiaxing with a daily supply of 1.6 million tons, guaranteeing industrial and domestic supplies. The daily capacity of sewage treatment is 630 thousand tons. The supply of industrial steam meets the production needs of industries and enterprises. Jiaxing Station of the Project of Natural Gas Transmission from West to East China is under construction. Jiaxing has an advanced telecommunications network, enabling instant communication with the world.

Jiaxing has easy access to all means of transportation. It is only 90 km from Shanghai Hongqiao Airport, 120 km from Shanghai Pudong Airport and 100 km from Hangzhou Xiaoshan Airport. With the existing Shanghai-Hangzhou and Zhapu-Jiaxing-Suzhou Expressways, it takes only one hour to get to Shanghai and Hangzhou, and 40 minutes to Suzhou. The ongoing Shanghai-Jiaxing-Hangzhou, Hangzhou-Pudong Expressways and Hangzhou Bay Across-sea Bridge linking Ningbo with Jiaxing will greatly save transportation costs. Shanghai-Hangzhou Railway is connected with national railway network and Jiaxing is a middle stop of it. The high-speed railway from Shanghai to Hangzhou will shorten the trip from Jiaxing to Shanghai and Hangzhou to only 15 minutes. Jiaxing Port is a national open port of first category and will be built into an important supporting port and a major feeding port for Shanghai Port and Ningbo Port. It currently has 8 berths of over 10 thousand tonnages each and 4 one-thousand-tonnage berths with a total volume of 15 million tons in 2005. The Beijing-Hangzhou Grand Canal connects Jiaxing with major cities like Shanghai, Hangzhou, Suzhou, Nanjing and Tianjin, etc. The crisscrossed inner rivers in Jiaxing, together with Shanghai Port, Yangshan Port and Jiaxing Port, constitute a river-sea transportation network.

In Jiaxing, all the investment and construction projects are provided with all-inclusive chain service from project initiation and approval, industry and commerce registration to bank account opening and tax levy, etc. There is a well-functioning financial and insurance service system. Jiaxing Customs and Jiaxing Import & Export Inspection & Quarantine Bureau exercises 24-hour inspection and control over import and export goods, and provides quick pass and direct pass customs service. We issue Direct Pass Card to foreign investors, entitling them to more preferential treatment in terms of investment, transportation, communications, medical care, traveling, as well as in receiving education and paying fees. Surrounded by major cities like Shanghai, Hangzhou and Suzhou in the Yangtze River Delta, Jiaxing is a center where information, technology, industries and finance congregate and radiate. It is a city low in investment costs, complete in industrial chains, rich in key resources and high in yield from investment.

Investment Policies

¡øEnterprise Income Tax

It is stipulated by the state that the income tax on enterprises with foreign investment shall be computed on the taxable income at the rate of 30%.

Enterprises with foreign investment of a production nature, located under the jurisdiction of Jiaxing, are levied at the reduced rate of 24% on enterprise income tax. Any enterprise with foreign investment of a production nature shall, from the year beginning to make profit, be exempted from income tax in the first and second years and allowed a fifty percent reduction in the third to fifth years ("2 years' Exemption and 3 years' Reduction" of tax policy for short).

Any foreign-invested export enterprise is, after the expiration of the tax-reduction-exemption term stipulated by the state, levied at half the rate on its income tax of that year if its export value exceeds 70% of that year's total output value.

Any foreign-invested hi-tech enterprise is, after the expiration of the tax-reduction-exemption term stipulated by the state, levied at half the present rate on its income tax for three more years.

Any enterprise with foreign investment, when purchasing equipment manufactured in China by using its invested capital, can be exempted from enterprise income tax.

¡øTax Refund for Reinvestment

Any enterprise with foreign investment which reinvests its share of profit obtained after tax directly into enterprises with foreign investment to operate for a period of not less than five years shall, besides being rebated forty percent of the income tax already paid on the reinvested amount, be further rebated 30%. If the above capital is invested into export enterprises or high-tech enterprises to operate for a period of not less than five years, the enterprise shall be fully rebated the paid income tax.

¡øIncome Remitting Tax

Any foreign-invested enterprise, when remitting its after-tax profit to another country, is exempted from the income tax levied on remittance.

¡øPre-Levied Income Tax

Any foreign investor who has no establishment in China but derives dividend, interest, rental, royalty or other income from sources in China, shall be pre-levied on income tax at a reduced rate of 10% except the kind of income stipulated as free of income tax according to law.

¡øDuty-Free for Imported Equipment

Foreign-invested enterprises encouraged by the state, when importing equipment, will be exempted from tariffs and import value added tax. Established enterprises encouraged by the state, which fall into the category of foreign-invested enterprise, foreign-invested R&D centers, foreign-invested hi-tech enterprises or foreign-invested, export-oriented enterprises, will be exempted from tariffs and value added tax when they import equipment, supporting techniques, machine parts and auxiliaries for self-use but which the domestic enterprises cannot produce or the performance of domestic products can not meet their requirements.

Featured Industries

After over ten years of development, Jiaxing has formed featured industries such as automobile components and parts, opto-electro-mechanical products, textiles, garments, leather cases, chemical products, warp knitting and timber, etc. Economic development zones have become the leading force of rapid economic development, the main field of developing featured industries and the booster to updating traditional industries. In 2005, the total output value of the 10 industries were: textiles, RMB 37.8 billion yuan; chemical fiber, RMB 19.8 billion yuan; leather, RMB 19.4 billion yuan; garments, RMB 17.1 billion yuan; general purpose equipment, RMB 11.1 billion yuan; chemical products, RMB 10 billion yuan; motors, RMB 9.7 billion yuan; building material, RMB 8.5 billion yuan; paper making, RMB 6.7 billion yuan and communications-electronics, RMB 5.8 billion yuan.

In terms of industrial layout, Jiaxing promotes industrialization and industrial competitiveness by giving priority to the four backbone industries: 1) harbor-based industries: petroleum chemicals (new chemical material), energy, new building material and vessel repairing; 2) high-tech industries: IT, new materials, bioengineering; 3) equipment manufacturing industries: auto parts, machinery standard component, electric equipment and 4) specialized traditional industries: modern textiles, leather, paper making and furniture. Combining the above with existing featured industries such as leather, home textiles, woolen sweaters, garments, wooden furniture and fastening pieces, etc., Jiaxing will provide more industrial support to investing enterprises.

Introduction to the Yangtze River Delta (Jiaxing) Investment Fair

The Yangtze River Delta (Jiaxing) Investment Fair is hosted by Jiaxing People's Government on Nov. 8th of every year. It is a window through which Jiaxing displays its achievements in reform and opening up. It is a platform where investment information is released and investments are attracted. It is also a channel by which enterprises find suppliers and match up their businesses.

Since the first in 2001, five fairs had been successfully held. 74 foreign-invested projects had been signed, totaling 2,061 billion US dollars in investment, among which negotiated foreign capital amounted to 0.866 billion US dollars.

The 2006 Yangtze River Delta (Jiaxing) Investment Fair was to be held on Nov. 8. Activities include investment introduction, signed-project certificate-awarding, product supply and project information release, business match-up talks, wine reception, etc.

Contact Information

Contact Us: Jiaxing Foreign Trade and Economic Cooperation Bureau

Address: No 168, Shaonian Road, Jiaxing, Zhejiang Province

Post Code: 314000

Contact person: Qiu Jinyue, Head of Foreign Investment Promotion Department

Tel: 0086-573-2072292, 2089457

Fax: 0086-573-2089457

Email: jinyue.qiu@163.com; 2089457@gmail.com