Beijing Investment Guide  2008-2009

With the opening of the Games of the XXIX Olympiad on August 8, 2008, Beijing will have entered a new phase in its quest for reform and opening and urban transformation. Beijing has been an important centre in China for commercial, cultural and international activities throughout its more than 3,000 years of recorded civilization, including more than 850 years as a capital city. Now, in the 59th year of the People’s Republic of China, China’s capital is emerging as a vibrant, more confident and energetic metropolis than many could ever have imagined. China’s reform and opening has brought previously undreamed of socio- economic development to its people, along with an unprecedentedly higher standard of living, especially in Beijing. This has created jobs for the people and business opportunities for local and foreign businesspeople and investors. In 2007, the gross domestic product (GDP) increased by 12 percent over that of 2006; the per capita GDP of Beijing’s urban residents exceeded US$7,300. Investors from 136 countries and regions have invested in 27,000 projects in Beijing with a total investment value of US$36.78 billion. More than 200 of the world’s top-500 companies have established operations or headquarters/representative offices in the capital. Beijing has emerged as one of the most exciting, forward-looking cities in the Asia-Pacific Region. The Olympic Games, guided by the “Green Olympics, High-Tech Olympics and People’s Olympics” concepts, have brought added energy and focus to Beijing’s urban and economic development. Through the Games, a solid foundation has been laid for Beijing’s peaceful emergence on the world stage where it expects to play an important and helpful role in world political and economic affairs. The Games will help people around the world better understand China and the import of Beijing’s modernization and its plans for the future. During this Olympic moment, whether you’ve come to China as a tourist, businessperson or investor, we warmly welcome you to the New Beijing.

Cheng Hong, Deputy Mayor of Beijing Municipality

Beijing Investment Guide  2008-2009

1 Beijing Facts p04 1 National Capital ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯ p08 2 International City ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯ p09 3 Cultural City ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p10 4 Liveable City ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p12

2 Beijing’s Economy p14

1 Overall Economy ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p16 2 Olympic Economy ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p22

3 Key Industries p24

1 Catalogue for the Guidance of Foreign Investment Industries ⋯p26 2 Setting up Company Headquarters in Beijing⋯⋯⋯⋯⋯⋯⋯p28 3 High-Tech Industries ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p31 4 Producer Services Industry ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p33 5 Cultural and Creative Industry ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p34 6 Outsourcing Service ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p36 7 Socialist New Countryside and Urban Agriculture ⋯⋯⋯⋯⋯p37

4 Regional Investment Guidance p38

1 Map of Investment Sites ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p41 2 The Four Urban Function Areas ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p42 3 The Six High-End Industrial Function Districts ⋯⋯⋯⋯⋯⋯p42 4 Zhongguancun Science and Technology Park ⋯⋯⋯⋯⋯⋯p44 5 Beijing Economic and Technological Development Area⋯⋯⋯p46 6 Beijing Tianzhu Export Processing Zone ⋯⋯⋯⋯⋯⋯⋯⋯p47 7 Beijing City-Level Development Zones⋯⋯⋯⋯⋯⋯⋯⋯⋯p48 8 Beijing’s New Towns ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p50

5 Investment Policies and Management p52

1 How to Invest ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p54 2 Procedures for Enterprise Establishment⋯⋯⋯⋯⋯⋯⋯⋯p54 3 Taxes and Fees⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p55 4 Labour and Social Security⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p60

6 Investment Services p64

1 Government Service Departments ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯p66 2 Commercial Chambers and Investment Organizations ⋯⋯⋯p67 3 Catalogues of Rules and Regulations for Foreign Investment ⋯p70

Beijing Facts 1 National Capital 2 International City 3 Cultural City 4 Liveable City Beijing Investment Guide 2008-2009

Heilongjiang

Jilin

Xinjiang Liaoning Inner Mongolia Tianjin Hebei Ningxia Shanxi Shandong Qinghai Gansu Shaanxi Henan Jiangsu Tibet Anhui Shanghai Sichuan Hubei Chongqing Zhejiang

Hunan Jiangxi Guizhou Fujian

Yunnan Guangdong Taiwan Guangxi Hong Kong Macao

Hainan

Geographical Location Planned Urban Area Beijing is located at 39.56 degrees north latitude 1,041 square kilometres and 116.20 degrees east longitude, on about the same latitude as that of Rome, Italy; Madrid, Administration Divisions Spain; or Philadelphia in the United States. Beijing 16 districts and two counties is protected by mountains to its west, north and northeast, but slopes gently south-eastward on Population the North China Plain toward Bohai (the Bo Sea). 16.33 million, with about 12.13 million permanent Total Area residents and 4.2 million 16,410.54 square kilometres temporary residents. Beijing Facts 

Administration Divisions

Huairou District

Yanqing County Miyun County

Changping District Pinggu District Shunyi District

Haidian District

Mentougou District Chaoyang Shijingshan District District

Fengtai District

Tongzhou District

Fangshan District

Daxing District

Nationality City Flowers 56 nationalities with the Han Chinese as the major- China rose and ity; Hui, Manchu and Mongolian are the majority chrysanthemum among the ethnic minorities.

Climate City Trees “Continental monsoon”: four seasons are distinctly The Chinese scholar- recognizable, featuring short springs and autumns, tree and oriental long summers and winters. The average temperature cypress throughout the year is 13.5 degrees Celsius. Beijing Investment Guide 2008-2009

1.1 National Capital Beijing, the capital of People’s Republic of China, is China’s political, culture and international exchange centre. It is a headquarters city, the home base of the ruling Communist Party of China (CPC) and the country’s central political and military organs, but it is also a headquarters for the country’s numerous national corporations, industrial associations, and financial institutions. It is the financial and economic information centre with the most developed and prosperous institutions that focus on science and technology, education and culture. As China’s capital city, Beijing has always abided by the concept of building a “prime place” of China and continuously intensifying the “prime place” sense. Its goals are to achieve democracy and legal administration, fairness and justice, credit and amity, vibrancy, stability and order, and the harmonious coexistence of humans in nature. The construction of a harmonious society in Beijing has always been in a leading objective. The city is devoted to providing “four services” with high standards and strict requirements, which are: serve the normal work of the central government of China, the CPC, political and military organs; serve the development of the nation’s education, science Beijing Facts 

and technology, culture and sanitation undertakings; serve the expansion of international exchanges; serve the work and lives of citizens of the capital city.

1.2 International City After 30 years of reform and opening, Beijing’s internationalization has been continuously improved; it is gradually taking on the features of an international city with regard to its economic development, international opening and exchange, infrastructural construction, social and natural environmental construction and in many other aspects. In terms of economic development, the per capita GDP of Beijing exceeded US$7,300 in 2007 and is now comparable with middle-income countries and regions in other parts of the world. Beijing is actively engaged in industrial restructuring with a focus on forging an industrial structure led by the producers’ services and high-tech industries. In terms of international opening and exchange, Beijing, as the prime bridge to China’s international political, economic and cultural exchanges, enjoys a leading role in global exchanges, and has become the regional international affairs exchange centre in the Asia-Pacific region. Among the 170 Beijing Investment Guide 2008-2009

countries that have established diplomatic relationships with China, 158 have set up embassies in Beijing. Beijing is also a host of representative offices of 23 international organizations and 269 foreign media organizations. It has formed sister-city ties with 42 cities around the globe; it’s also connected with all the countries and regions by post. About 260 countries and regions are reachable by international direct-lines. At the end of 2007, there were 110,000 permanent foreign residents in Beijing. The capital received 4.4 million foreign visitors. Thirty-five percent of Beijing’s residents speak a foreign language. Beijing has vastly improved its infrastructure, including its transportation network, its water, wastewater, electrical and garbage-handling systems, its housing developments and other infrastructures directly related to people’s daily lives. It now has one of the best, most integrated communications systems of any modern city in the world. High-speed routes form a skeleton supporting Beijing’s traffic north–south, east–west traffic grid that is being improved by the day to meet or exceed existing international standards. Public transportation provided makes it possible to reach even the farthest corners of the municipality by bus, train, light rail or subway and provides great convenience within the central urban area. The Beijing Capital International Airport serves more than 200 routes to major countries, regions and to most of the cities in China. It is predicted that the turnover of passengers in 2008 will exceed 60 million passengers, ranking in the global top five in terms of passenger flow. In its social and natural environmental work, Beijing has made significant improvements in its handling of air pollution, with stricter standards for industrial emissions, auto and public transport tail-gas emissions and garbage disposal, resulting in the creation of a more eco-friendly environment, more green space and park lands and improvements in the living environment. (See the “Cultural City” and “Liveable City” sections).

1.3 Cultural City Beijing is a cultured city with a history that disappears into the recesses of time, yet this history is attested in its numerous sites of archaeological interest: the Great Wall of China; the Forbidden City; the remains of Peking Man (Beijing Cave Man) in Zhoukoudian; the Summer Palace; Temple of Heaven and Beijing Facts 11

the Ming Tombs to name only a few. There is hardly a square metre of Beijing that has not been touched by some of China and the world’s most historical or cultural events. This record has been preserved in the city’s 141 museums, the National Library of China and at the National Grand Theatre. Other cultural venues containing precious remnants of history are located throughout the city. Among them are: former residences of personalities, temples and other religious places, hutong (alleyways), courtyard residences (siheyuan), famous bridges, passes and rivers. But there’s also a modern cultural awakening that is exemplified by everything from the National Grand Theatre, the National Art Museum of China, the 798 Art District, the Songzhuang Art Museum and arts community, to the nightspots found around Houhai, the Bell and Drum towers, the Workers’ Stadium and elsewhere in what is now a 24-hour city. Beijing has more scientific, technological and educated and skilled personnel of any city in the country. It has more than 200 national scientific research centres, 83 universities, 30 percent of the country’s laboratories and 408,000 scientific and technological personnel. At the end of 2007, there were 187,000 post-graduate students in Beijing, along with 53,000 people who hold doctorates.

2007 Beijing Cultural Industrial Fact Name Quantity Newspapers published 256 kinds Films screened 347,000 shows Periodicals published 2,804 kinds Museums 141 Books published 140,000 kinds Cultural relics preserved 3.3 million Popularization rate of cable TV programmes 73.3 percent National comprehensive archives 19 units National key cultural heritage protection units 98 Archives for opening 833,000 copies Public libraries 25 State-Level Intangible Cultural Heritage Sites 14 Beijing Investment Guide 2008-2009

1.4 Liveable City Ensuring harmony between human beings and nature is a goal of the Beijing Municipal Government: the aim is to make the capital a more liveable city. Environmental protection is a top priority, and not just for the 2008 Olympic Games, although environmental protection was a big part of the city's preparatory work for the Games. Beijing’s energy structure and management was greatly improved with additional soft-coal pollution, vehicle pollution, dust pollution and industrial air pollution controls and treatment. As a result, the city's air quality is much better. The relocation of Shougang Group out of Central Beijing is aiding this effort. An ecological water system that integrates the functions of flood prevention, drainage, environment, cityscape and recreation was created. A modern city waste treatment system was also built. The life quality of the citizens and social security system were improved greatly.

2007 Beijing Construction Index for a More Liveable City Sort Name Number Environmental Protection Forest greening rate 51.6 percent Urban area greening rate 43 percent Day rate of air quality equal with Grade-II or above 67.4 percent Energy saving and Energy consumption per 10,000 yuan GDP 0.7 tons of standard coal emissions reduction Water consumption per 10,000 yuan GDP 38.6 cubic metres Urban wastewater treatment rate 92 percent Urban domestic garbage harmless treatment rate 96.5 percent People’s lives Per capita disposable income of urban residents 21,989 yuan Per capita disposable income of rural residents 9,559 yuan Per capita residential floor space of urban residents 20.3 square metres Per capita residential floor space of rural residents 39.5 square metres Medical-care beds for per 1,000 persons 6.2 Doctors for per 1,000 persons 4.29 Nurses for per 1,000 persons 4 Social security People with basic endowment insurance 6.72 million People with basic health insurance 7.83 million People with rural endowment insurance 490,000 People with new rural corporative medical insurance 2.69 million Registered unemployment rate in the urban area 1.8 percent Beijing Facts 13

Beijing’s Economy 1 Overall Economy 2 Olympic Economy Beijing Investment Guide 2008-2009

2.1 Overall Economy Major economic indexes: In 2007, Beijing’s regional gross domestic product (GDP) increased to 900.62 billion yuan (US$130.87 billion), an increase of 12.3 percent year-on-year and the ninth consecutive year with double-digit growth. Counted on the basis of permanent residents, the per capita GDP rose to 56,044 yuan (US$7,370 if counted by the annual average exchange rate), 8.9 percent higher than 2006.

Beijing's GDP Growth (100 million yuan) 10000 9006.2 7970.3 8000 6886.3 6060.3 6000 5023.8 4330.4 4000 3710.5 3161

2000

0 2000 2001 2002 2003 2004 2005 2006 2007 (year)

In 2007, Beijing realized fixed asset investments of 396.66 billion yuan, 17.6 percent higher than 2006; the value of retail revenues for consumer goods was 380.02 billion yuan, an increase of 16.0 percent. A favourable investment environment and great market potential has prompted many internationally renowned enterprises to do business from bases in Beijing. Industrial structure: The industrial structure of Beijing is improving gradually with the portion of the tertiary industry increasing continually. The ratio of agricultural, manufacturing and services sectors has changed from 1.3:27.8:70.9 in 2006 to 1.1:27.5:71.4 in 2007. The fast and sound development of the producer services industry, cultural and creative industry and high-tech industry has become an important force to promote the industrial structure optimization of Beijing. According to the Development Plan of Services Industry during Beijing’s 11th Five-Year Plan, by 2010, the annual growth rate of the ter- tiary industry will hover at about 10 percent, with its value-added component accounting for 72 percent of the city’s GDP. Beijing’s Economy 17

Beijing's Industrial Structural Changes Rate（%） 80

70.9 71.4 70 69.2 68.6 67.8 69.1 67 64.8 60

50

40 32.7 30.8 30.6 28.9 29.6 29.5 30 27.8 27.5

20

10 2.5 2.2 1.9 1.8 1.6 1.4 1.3 1.1 0 2000 2001 2002 2003 2004 2005 2006 2007 Agricultural Manufacturing Services

2006 Beijing's Modern Manufacturing Industrial Structure

Medicine Other 10% 4% Transportation equipment Electronic information manufacturing 44% 21%

Electronical 21%

2006 Beijing's Service Industrial Structure

Education Other Financial 7% 20% 17% Information transfer, computer service and solftware Transportation, 12% storage and post 8%

Scientific services and Real estate geogrophical surveys 9% Wholesale and retail Rentals and business 7% 13% services 7% Beijing Investment Guide 2008-2009

City construction: Beijing has seen rapid growth in its urban development in the fields of road construction, public transportation, Olympic construction and more. In 2008, many Olympic-related projects were finished, including the 11 new venues, 12 renovated/expanded venues, 8 temporary venues and 5 related Olympics projects: the National Convention Centre; the Airport Expressway, Olympic Branch Line, BeijingTianjin Intercity Railway and Subway Lines 4 and 10.

2007 Beijing City Construction Index

Category Name Data Comparison

Traffic construction Total length of highways

in the eight urban districts 4,460 kilometres Up by 9%

Density of road network 1.26 kilometres Up by 0.015 kilometre

in the rural areas per square kilometres per square kilometre

Total length of railway 142 kilomtres Up by 28 kilometres

Public transportation Total length of public

transportation of the city 175,000 kilometres Down by 6%

Annual total passenger traffic 4.88 billion persons Up by 4.3%

Taxis 66,600 Equal

Public affairs Investment in energy

infrastructure 20.02 billion yuan Up by 4.9%

Electricity consumption 66.7 billion kWh Up by 9.1%

Natural gas supply 4.273 billion cubic metres Up by 11.3%

Liquid oil gas supply 37.66 tonnes Down by 9.97%

Central heating area 392 million square metres Up by 12.16% Beijing’s Economy 19

International economy and trade: Beijing’s mode of opening is comprehensive in scope, multi-layered and broad-reaching. By the end of 2007, more than 136 countries and regions had invested in more than 27,000 projects with an accumulated foreign investment of US$36.78 billion in the city. Toshiba, Panasonic, Nokia, Motorola, Samsung and many world-renowned multinational companies have set up regional headquarters in Beijing. Beijing is host to more than 40 regional headquarters of multinational companies, 153 investment

Realized FDI in Beijing (US$100 million)

54 45.5 50.7

35.3 36 30.8

21.5 17.7 17.9 18

0 2001 2002 2003 2004 2005 2006 2007 (year)

1980-2007 Cumulative Actual Investment Industrial Status Rate（％） 80.0

60.0

40.0

20.0

0 Agricultural Manufacturing Services

1.5 27.6 70.9 Beijing Investment Guide 2008-2009

companies and 277 research and development-oriented foreign-invested companies. The desired “headquarters economy effect” is taking shape. Beijing is an important non-port trade centre in China. In 2007, the export-import volume in Beijing was valued at US$192.95 billion, 22.1 percent higher than 2006. Manufacturing exports were valued at US$20.24 billion, accounting for 41.4 percent of exports, an increase of 36.6 percent year-on-year. Import-export trade in technologies was valued at US$4.712 billion; externally

1980-2007 Cumulative Actual Foreign Investment Patterns Status

Other 6.6%

Joint venture 23.8%

Sole investment 56.7% Cooperative 12.9%

1980-2007 Cumulative Investment from Other Main Countries and Regions

Hong Kong Other countries US$9.57 billion US$10.86 billion 25.4％ 28.9％

Isle of Man US$2.47 billion 6.6％ Germany United States Japan United States Virgin Islands US$2.07 billion US$2.63 billion US$4.48 billion US$5.53 billion 5.5％ 7％ 11.9％ 14.7％ Beijing’s Economy 21

contracted projects and labour cooperation achieved revenues of US$940 million; exports of high-tech products and software were valued at US$17.09 billion and US$459 million, an increase of 24 percent and 28.9 percent. Since 2003, the trade of services in Beijing has maintained an annual growth rate of 30 percent, accounting for one-fifth of the country’s entire services trade.

2006 Beijing Income Rate in the New Services Trade Field of China

Rate(%) 120 100 100 100 100 100 100 100 100 82 80 68 60 49 39 44 46 40 36 20 0

and and fees video fees industry services telecom-industry and installation Financial and services Royalty Computer Consulting Film insurance Post labour information munication Constructionand 2006 Beijing Payout Rate in the New Service Trade Field of China Rate (%) 120 100 100 100 100 100

80 70 72 60 55

40 30 Rate of Beijing in China 20 Entire country 0

video telecom- and installation and Advertising services Film Post munications labour Constructionand Beijing Investment Guide 2008-2009

2.2 Olympic Economy The Beijing 2008 Olympic Games inspired development of the “Olympic Economy”; business opportunities came to the fore in three aspects. Direct investment in the construction and renovation of Olympic venues was the first opportunity. The investment budget for the 31 competition venues and 45 training venues was 20.5 billion yuan (US$3 billion). To prepare for the Olympic Games, the Beijing Municipal Government invested 180 billion yuan (US$26.33 billion) in the city’s infrastructural construction during the five years prior to the Games: 90 billion yuan (US$13.17 billion) for building subways, light-rail lines, expressways, airport facilities and more to improve the transportation network; 45 billion yuan (US$6.58 billion) was spent on environmental cleansing, such as city greening, on water systems, air quality and more; 30 billion yuan (US$4.39 billion) went to information-service Beijing’s Economy 23

construction, business commerce, high-speed information services, broadband networks, long distance education; and 15 billion yuan (US$2.19 billion) was spent to improve water, electricity and gas facilities. A second business opportunity was found by partners of the International Olympic Committee (IOC) and the Beijing Organizing Committee for the Games of the XXIX Olympiad. The 12 Beijing Olympic Partners include Coca Cola, Atos Origin, GE, Johnson & Johnson, Kodak, Lenovo, Manulife, Mcdonald's, Panasonic, OMEGA, Samsung, Visa; 11 sponsors include Bank of China, China Netcom, CNPC, SINOPEC, China Mobile, Volkswagen, adidas, Johnson & Johnson, Air China, PICC and State Grid. Fourteen Exclusive Suppliers include UPS, Haier, Budweiser, SOHO.com, Yili, Tsingtao Beer, Yanjing Beer, BHP Billiton; Heng Yuan Xiang, Uni-President, Great Wall Wine, J Kerry Oils & Grains (China) Limited (Arawana), Gehua Ticketmaster Ticketing, MengNa, Beifa, Vatti, Yadu, Snickers, Qianxihe Food Group Limited, Synear Food, Royal, Staples, Technogym, and Schenker. There are also eight other suppliers including EF, Crystal CG, Yuanpei Translation, Der Floor, Aokang, Liby, PricewaterhouseCoopers and Mondo. Still another opportunity, the third, came with general business activity, the most important and influential business opportunity accompanying the Olympic Games. Opportunities arose from innovations in products and services. New business opportunities came in the high-tech and modern manufacturing industries, featuring electronic information, autos and auto parts; in the producer services industry, featuring financial and insurance consulting services and exhibitions; cultural and creative industry, featuring culture and art, software and information services, industrial design; the modern circulation industry, featuring chain and convenience store development and modern logistics; and in the tourism industry, featuring new tourism products. All provided new investment channels for companies from home and abroad. The 2008 Olympic Games has six co-host cities: Qingdao (29th Olympic Sailing Regatta), Hong Kong (equestrian), Tianjin, Qinhuangdao, Shenyang and Shanghai (football preliminaries). Most of these cities are located within the Bohai Sea Rim Economic Circle. Through co-hosting the Olympic Games, the area’s overall industrial structural level and urban infrastructural construction have been heightened, accelerating regional cooperation in the Bohai Rim area and, thusly, the speed of the capital city’s progress toward becoming a modern metropolis.

Key Industries 1 Catalogue for the Guidance of Foreign Investment Industries 2 Setting up Company Headquarters in Beijing 3 High-Tech Industries 4 Producer Services Industry 5 Cultural and Creative Industry 6 Outsourcing Services 7 Socialist New Countryside and Urban Agriculture Beijing Investment Guide 2008-2009

3.1 Catalogue for the Guidance of Foreign Investment Industries On December 1, 2007, the Catalogue for the Guidance of Foreign Investment Industries (2007) (hereafter referred to as Catalogue, with details on the “Policies and Rules” section of http://www.bjmbc.gov.cn), jointly released by the National Development and Reform Commission and the Ministry of Commerce, was put into practice. The major amendments to the content of the new Catalogue include: 1.) The number of “encouraged” items has been greatly increased. In total, 478 encouraged, “limited” and “prohibited” items have been listed in the new Catalogue, of which 351 are encouraged items, 87 are limited items, and 40 are prohibited items. Compared with the original Catalogue, 94, 9 and 5 items are added in the respective categories, with encouraged items increas- ing by 37 percent. 2.) The opening-up of the service industry has been expanded even more. In the encouraged Catalogue, items like “service outsourcing” and “modern logistics” are added; the originally limited items of “goods leasing” and “cargo agent” are adjusted to authorized items; and the originally prohibited “futures company” and “construction and operation of power grid” are listed in the opening-up scope for the first time. 3.) Foreign investment in the developing recycling economy, clean production, renewable energy, eco-environment protection, as well as comprehensive utilization of resources is encouraged. More than 40 items in the encouraged category are added in the new Catalogue. 4.) A prudent, open attitude is adopted in some strategic and sensitive indus- tries related to national economic security, and relevant items are properly adjusted to restrict the accession of foreign capital or raise the restriction on share ratios. 5.) The convenience of foreign investment is further enhanced. Industrial poli- cies and exclusive planning, which have been approved for enforcement or agreed on in principle by the State Council, are summarized, and related con- tent of foreign investment accession policies is all listed into the Catalogue. Key Industries 27

The provisions in the Catalogue stating the share proportion of “restricted to joint ventures and cooperative enterprises,” “holding of shares by the Chi- nese party” or the “Chinese party taking a relative majority stake” are applicable to foreign investment access of newly established projects and to foreign invested projects like capital increase and mergers and acquisitions of foreign invested enterprises. The State shall continue to offer certain preferential taxation policies to foreign investment projects in the encouraged category of the Catalogue. The imported equipment of the referred projects shall enjoy preferential poli- cies of exemption of import duties and value-added taxes of imports, as well as that of value-added tax refunds for purchased domestic equipment. For foreign investment projects ratified after December 1, the related preferential policies of the new Catalogue shall prevail. Projects ratified before the same date will be subject to the original policies in effect during the ratification of the projects. For those prohibited projects newly added in the Catalogue, if they have been in existence and operation, policies concerning their approval shall be adopted. Under the new Catalogue, however, in the capital increase and equity transfer of original enterprises or overseas listing of domestic enterprises, the new Catalogue shall prevail for those involving newly added prohibited projects. Beijing Investment Guide 2008-2009

3.2 Setting up a Company Headquarters in Beijing In 2007, Beijing had the largest number of world top-500 company headquarters in China; it ranks fourth in the world in world top-500 company headquarters. Ninety-six of China’s top-500 enterprises have established headquarters in Beijing, the most of any Chinese city. Beijing is a host to the regional headquarters of more than 40 multinational companies and 153 investment companies that have the nature of regional headquarters, topping all Chinese cities. Six banks, including JPMorgan and Hana Financial Group have established banking institutions with foreign legal persons. The Beijing Financial Street, Beijing CBD and Zhongguancun Science and Technology Park (ZSTP) are important financial clusters in the capital; these are

List of Foreign-funded Investment Companies in Beijing

Ericsson (China) Company, Limited

Epson (China) Limited

Canon (China) Company, Limited

OMRON (China) Limited

Matsushita Electric (China) Company, Limited

Sony (China) Limited

Siemens Limited, China

GlaxoSmithKline (China) Investment Company, Limited

ABB (China) Investment Company, Limited

Kraft Foods (China) Company Limited

Motorola (China) Investment Company, Limited Key Industries 29

important areas that sustain China’s economic and financial development. In 2006, the GDP of the three areas accounted for 23.4 percent of that of the city. Beijing has strengthened its headquarters economy. A series favourable policies were adopted to bolster the economy, such as tax preferences, senior talent encouragement and financial support. A working committee for investment enterprises was established to resolve real problems facing regional headquarters and enterprises and to provide more convenient service. For the Confirmation Measure on the Notice of the Regulations to Encourage the Multinational Companies to Establish Headquarters in Beijing and Confirmation Measure on the Establishment of Multinational Headquarters in Beijing, please visit http://www.bjmbc.gov.cn" www.bjmbc.gov.cn.

Hitachi (China) Limited

Nissan (China) Investment Company, Limited

Toyota Motor (China) Investment Company, Limited

Samsung (China) Investment Company, Limited

ITOCHU (China)

Volkswagen (China) Investment Company, Limited

Shell (China) Limited

NEC (China) Limited

Honda Motor (China) Investment Company, Limited

Alstom (China) Investment Company, Limited

AREVA (Beijing) Consulting Limited Beijing Investment Guide 2008-2009

Baxter (China) Investment Company, Limited

Nortel Networks (China) Limited

ToTo (China) Company, Limited

Toshiba Corporation

IBM China Company Limited

Caterpillar (China) Investment Company, Limited

Compaq (China) Investment Company, Limited

Cummins (China) Investment Company, Limited

Lucent Technologies (China) Company, Limited

LG Electronics (China) Company, Limited

Mannesmann (China) Investment Company, Limited

Nokia (China) Investment Company, Limited

Novozymes (China) Investment Company, Limited

Nestle (China) Limited

Schneider Electric (China) Investment Company, Limited

Chia Tai (China) Investment Company, Limited Key Industries 31

3.3 High-Tech Industries Beijing’s high-tech industries mainly focus on the research and development (R&D) and services for high-tech industries and the manufacturing of high-tech products. In 2007, among the industrial enterprises that were large enough for State statistical compilation, the value added of high-tech industries rose to 55.73 billion yuan (US$8.1 billion) with a 22.1 percent increase over that of 2006, accounting for 28 percent of the value-added of industrial enterprises above a designated size and 45.5 percent contribution rate to the industrial growth. To make full and efficient use of talented personnel, available science and technology and scientific research facilities, to welcome international R&D institutions moving to Beijing, and to meet the need for economic innovation in the capital, Beijing strongly encourages enterprises and organizations to establish R&D institutions in Beijing. Policies encouraging this trend have been adopted to define the requirements establishing R&D institutions and incentives that may be offered for attracting talented personnel, including tax reductions or exemptions and financial support.

Requirements for Establishing R&D Institutions in Beijing: • Must be engaged in basic, applied, high-tech and social public welfare scientific and technological research, technological R&D or experimentation in the natural sciences. • Must have a definite R&D programme, in accordance with State and municipal technology and industrial policies, a fixed location for work, equipment and other necessary scientific research necessities. Buildings Beijing Investment Guide 2008-2009

housing scientific research efforts should have an area of more than 200 square metres and the total assets should be valued at more than 5 million yuan (US$726,535) (the total assets of an R&D institution involved in the software industry should be more than 1 million yuan (US$145,286). • Must have more than 10 staff members, while the technological personnel that have bachelor’s degrees or above should be no less than 50 percent of the entire staff of the institution and the R&D personnel should be no less than 60 percent. • Revenues from technological products or services should be more than 60 percent of the total income. For R&D institutions of independent legal persons, the R&D expenses should be more than 20 percent of the total income; for the institutions of non-independent legal persons, the R&D expense should be no less than 5 million yuan (US$726,681) or account for more than 5 percent of the product sales income of the enterprise.

To get information about these incentive policies, see the Beijing Regulations on Encouraging the Establishment of Science and Technology Research and Development Institutions in Beijing (Beijing Government Issue [2002] No. 23), Beijing Awards for the Senior Talents of the Science and Technology Research and Development Institutions and Beijing Special Fund for the Self-Innovation of the Science and Technology Research and Development Institutions at: http://www. bjkw.gov.cn. Key Industries 33

3.4 Producer Services Industry The producer services industry is major aspect of Beijing’s modern service industry. In 2006, the producer services industry accounted for 50 percent of the modern service industry, and in 2007 it accounted for 55 percent. In Beijing 11th Five-Year Plan, Beijing proposed to greatly enhance the producer services industry including the financial insurance, modern logistics, international trade, information service, modern exhibition and intermediary service industries. The financial industry is the largest and most rapidly developing industry in the producer services industry, making it the leading and pillar industry of Beijing. Beijing has an excellent financial services system that functions well, relying upon clusters of large-scale financial institutions including banking, securities and insurance firms. As of 2007, there were 430 financial institutions, including six foreign banks. The balance of domestic and foreign currency deposits of financial institutions (including foreign-funded institutions) of Beijing was 3.77 trillion yuan (US$527.8 billion), up by 389.36 billion yuan (US$54.5 billion) over that at the beginning of the year. The balance of domestic and foreign currency loans of financial institutions (including foreign-funded lenders) was 1.99 trillion yuan (US$278.06 billion), up by 240.81 billion yuan (US$33.7 billion) over that at the beginning of 2007. The trade volume of various securities on the securities market in 2007 exceeded 9.80 trillion yuan (US$1.37 trillion), growing by four times over that of 2006. By the end of 2007, there were 91 insurance companies in Beijing. Insurance income in 2007 totalled 49.81 billion yuan (US$7.24 billion), up by 21 percent over that of 2006. Beijing Investment Guide 2008-2009

In recent years, the internationalization of Beijing’s producer services industry increased rapidly with the accumulation of more multinational and professional service enterprises. Beijing encourages foreign funders to participate in asset reorganizations and the shareholding reform of the service industry, to introduce advanced technologies, management experience and high-quality talents and to improve service levels and international competitiveness. Relying upon industrial convergence, market development and human resource training, foreign funders are encouraged to cooperate with the service industries in the finance, logistics, education, technology and tourism.

3.5 Cultural and Creative Industry As China’s cultural centre, Beijing has abundant scientific, educational and cultural resources and creative talents. Since the 1990s, the Beijing Municipal Committee of the CPC and the Beijing Municipal Government have begun to emphasize the cultural and creative industry and have proposed to develop this industry, mainly focusing on the six industries involved in cultural performances, publishing and distribution, copyright trade, TV and film programme production and trade, animation and cartoons, network games, cultural exhibitions and the antiques trade. There are already 10 cultural and creative industry cluster zones in Beijing, involving in more than 10 categories such as the arts, software and information services, industrial design, the Internet, animation and cartoons and games. From January to November 2007, Beijing’s cultural and creative industry reported an income of 382.77 billion yuan (US$55.61 billion), an increase of 19.4 percent, and provided jobs for 579,000 people, with a year-on-year growth of 6.3 percent. The total assets of Beijing’s cultural and creative industry rose to 616.1 billion yuan (US$89.52 billion), up by 19.9 percent. By 2010, the realized industrial value-added of Beijing’s cultural and creative industry is expected to exceed 100 billion yuan (US$14.53 billion), more than 10 percent of the total output value of Beijing. Key Industries 35

Beijing’s cultural and creative industry will concentrate on high-end development. To boost its cultural and creative industry, Beijing issued its Policies for Promoting the Cultural and Creative Industry Development in Beijing, Confirmation and Management of Beijing Cultural and Creative Industry Cluster Zones and Catalogue for the Guidance of Beijing Cultural and Creative Industry Investment. For more information, please visit Beijing creative industry Web site at: http://www.bjci.gov.cn. Beijing Investment Guide 2008-2009

3.6 Outsourcing Services Beijing is the outsourcing service base of China. Its services play a leading role in software and information, financial, technology, business, logistics, bio-medical, financial management and human resources management services. As of 2007, this outsourcing activity was valued at US$459 million, and the income of offshore service outsourcing surpassed US$2 billion, up by 30.8 percent: 30 percent more than that of 2006. In the next three years, the growth rate of outsourcing services will rise to 40 percent. To seize the development opportunity of international outsourcing service transfers, Beijing took action to lend policy support to information collection and business statistics, talent training, intellectual property rights protection, indus- trial association construction, public information service platforms, public training service platforms, publicity and investment promotion. The city established its own outsourcing service association and launched an outsourcing service Web site. Based on trends toward the internationalization of Beijing’s financial industry, the city issued its Opinions of the Beijing Municipal People’s Government about Ac- celerating the Construction of the Capital’s Financial Back-office Service Support Sys- tem and launched four financial support offices, including the Chaoyang Jinzhan Financial Service Zone, Haidian Daoxianghu Financial Service Zone, Tongzhou New Town Financial Service Zone and Xicheng Desheng Science Park Financial Service Zone. For more information, please visit the Beijing outsourcing service Web site at: http://www.beijingsourcing.org.cn. Key Industries 37

3.7 Socialist New Countryside and Urban Agriculture Beijing has worked hard to strengthen its socialist new countryside construc- tion and to adjust economic development involving urban and rural areas accordingly. Investment in rural-area infrastructure was enhanced. In 2006, investment in rural areas surpassed that of the urban area by 52 percent; as of 2007, investment in the countryside had risen to 30.99 billion yuan (US$4.50 billion), up by 8.7 percent. The rate of opening to traffic grew by 95 percent in the villages of the municipality. Beijing is enhancing the construction of its modern agricultural system to develop its urban agricultural setting and to increase the incomes of villag- ers. The city is focusing on “three kinds of agriculture”: high-end and high-tech breeding, processing and sightseeing agriculture. As of 2007, the added-value of agricultural pursuits totalled 10.13 billion yuan (US$1.47 billion); there were at least 1,302 agricultural and tourism gardens that received 26.14 million visitors, up by 19.2 percent; 891 agricultural products were awarded harmless agricultural product certificates by the Ministry of Agriculture, and 117 products won green- food certificates. The per capita net incomes of the villagers rose to 9,559 yuan (US$1,389.37), up by 10.9 percent. In the coming years, Beijing will put more emphasis on harmless, green and organic agricultural products and high-end products designed to meet personal needs. Known-brand creation, value-added agricultural products and the comparative benefits of agriculture will also be considered. Beijing will speed up its foreign investment in the agricultural sector and will encourage investment in breeding, processing and sightseeing agricultural pursuits. Beijing issued its Policies for Encouraging Beijing Agriculture to Utilize the Foreign Investment. For details, please visit: http://www.bjpc.gov.cn.

Regional Investment Guidance

1 Map of Investment Sites 2 The Four Urban Function Areas 3 The Six High-End Industrial Function Districts 4 Zhongguancun Science and Technology Park 5 Beijing Economic and Technological Development Area 6 Beijing Tianzhu Export Processing Zone 7 Beijing City-Level Development Zones 8 Beijing's New Towns Beijing Investment Guide 2008-2009

According to the scientific development concept and Beijing’s real conditions, the Beijing Urban Master Plan (2004-2020) outlined a new urban spatial development plan based on “two axes, two belts and multiple centres.” Beijing will adopt the multiple centres and new towns development strat- egy, guide the layout of urban functional areas and construct a modern city structure in accordance with the city’s development guidelines. Scattered re- sources and functions will be integrated into several specific areas to achieve the intensive development of the city. “Two axes” refers the east–west axis along Chang’an Jie (Chang’an Avenue) and the traditional central axis (from north to south) which compose the backbones of the city. “Two belts” refers to an “East Development Belt” in eastern Beijing and a “West Development Belt” in western Beijing. The East Development Belt contains the districts of Huairou, Shunyi, Tongzhou and Pinggu, Miyun County and the Yizhuang Development Area (BDA). The West Development Belt includes one county and five districts in western Beijing: Yanqing County, Changping, Mentougou, Fangshan and Daxing districts. “Multiple Centres” means to construct several urban functional cen- tres to serve the entire country and to face to the world, to strengthen core functionality and comprehensive competitiveness. It refers to the urban func- tional areas of the city, including the Zhongguancun Science and Technology Park (ZSTP), the Olympic Central Area, the CBD (Central Business District), the Science and Technology Innovation Centre in the Haidian Shanhou Area, the Shunyi Modern Manufacturing Base, Tongzhou Comprehensive Services Centre, Yizhuang High-Tech Industry Development Centre and Shijingshan Comprehensive Services Centre. Regional Investment Guidance 41

4.1 Map of Investment Sites of Beijing Beijing Investment Guide 2008-2009

4.2 The Four Urban Function Areas

Space Function District Development Key Points Capital Function Core District Emphasizes modern service industries related to finance, culture and tourism, and innovating and promoting traditional service industries. Urban Function Expansion District Gives priority to modern service industries, scien- tific educational, cultural, sports, business ser- vices, modern logistics, and information services, high and new technological industries and expands the economic scale of the headquarters economy. New Urban Development District Emphasizes the construction of new cities and industrial parks, concentrates efforts to develop the modern manufacturing industry and the production and human-oriented services indus- try, and develops high-end farm products and agricultural products suited to a metropolis. Ecological Conservation Development District Highlight the development of environmentally friendly industries and metropolitan industries such as ecological agriculture, characteristic forestry and fruit businesses, tourism, leisure and metropolitan industries.

4.3 The Six High-End Industrial Function Districts The six high-end industrial functional districts, including the ZSTP, Beijing Financial Street, BDA, CBD, Airport-Based Economic District and Olympic Central Zone, are the main forces that support the economic development of Beijing. In 2006, these six districts provided jobs for 32 percent of the workers in 7 percent of Beijing; with only 44 percent of the city’s total assets, these districts created 48 percent of the benefit to the entire city, along with 42 percent of the city's revenues and 36 percent of its GDP. In the same year, the six districts realized added values of 281.36 billion yuan (US$41.04 billion), up by 19.6 percent; the Regional Investment Guidance 43

new value-added accounted for 47 percent of Beijing’s GDP; revenues were 79.5 billion yuan (US$11.6 billion), up by 44 percent; the revenue added accounted for 57 percent of the city’s revenue added. Facts of the Six High-End Industrial Function Districts Industrial Function District Development Key Points Zhongguancun Science and A national knowledge and innovation centre, a technical Technology Park R&D base and a scientific and technological results trans- formation base. Central Business District (CBD) Forms an international modern business centre with advanced business services offering complete functions. Finance Street Core District Strengthens financial services for the national financial decision-making supervision centre, financial assets administration centre and financial information conver- gence centre. Olympic Central Zone Emphasizes development of the sports, cultural, tourism and exhibition industries; constructs sports, cultural, enter- tainment and exhibition centres of an international stature and develops Olympic landmark tourist sites. Beijing Economic and Technological Continue building this high-end industrial park, with the Development Area Beijing–Tianjin–Tanggu Expressway and the Beijing– Tian jin Inter-City Express Railway as links, relying on high- end industries and the headquarters economy for support and with an international market orientation; construct the southeastern industrial development zone and foster new “poles” for development. Airport-Based Economic District Organize and plan the Beijing Tianzhu Export Processing Zone, Airport Bonded Logistics Centre, the Airport Indus- trial District, Airport Logistics Base and surrounding areas; build an airport-based economic district with the Beijing Capital International Airport at its core; actively develop airport-based industry and advance the airport economy.

Note: The ZSTP, BDA and Beijing Tianzhu Export Processing Zone are State-level development areas. Beijing Investment Guide 2008-2009

4.4 Zhongguancun Science and Technology Park (ZSTP) The ZSTP, also named as China’s “Silicon Valley,” was inaugurated in 1998 with approval of the State Council, as the country’s first State-level, new- and high-tech development zone. This 232.52-square-kilometre area gathers the most intensive science and technology, intellectual, talent and information resource of Beijing. It is home to 39 universities including China’s top-rated uni- versities such as the Peking University and Tsinghua University. About 400,000 students study here. There are 213 scientific research institutions including the Chinese Academy of Sciences, 41 national engineering centres, 42 key labora- Regional Investment Guidance 45

tories and 10 State-level enterprise technical centres. The historical sites and beautiful scenic spots in this area such as the Summer Palace, Yuanmingyuan Ruins Park (the old Summer Palace) and Fragrant Hill supply a good environ- ment for people to work and live. After nearly two decades of operation, this park has entered a new de- velopment stage. From a original “electronic street” of Haidian District, this area developed as a “one zone and ten parks” structure, including the Haidian Park, Fengtai Park, Changping Park, the Electronic City Science Park, Yizhuang Science Park, Desheng Park, Yonghe Park, Shijingshan Park, Tongzhou Park and Daxing Ecological Medicine Base. Haidian Park is the main body and core of ZSTP. ZSTP has an obvious industrial character, specializing in the software, integrated-circuits, computers, networking and communications industries. The leading electronic information industry made 58 percent of the ZSTP’s total in- come in 2007. In addition, cleaning technologies, ecological medicine and new materials have become new areas for economic growth. The high-tech service industry, involving information, research and development (R&D) service and creative design, is developing rapidly, taking up half of the park’s surface area. The cultural and creative industry that integrates science and technology and culture has sprung up, taking up 40 percent of the economic scale. Since its establishment in the ZSTP, the high-tech industry has maintained a 25 percent growth rate; its total income accounts for 14.3 percent of the 54 national high- tech development zones of China; its gross domestic product (GDP) accounts for 18 percent of that of Beijing, with the contribution to the GDP of Beijing growing by more than 20 percent per year in recent years.

Contact: The Administrative Committee of Zhongguancun Science and Technology Park Address: 36 Suzhou Jie, Haidian District, Beijing 100080 Tel: +86 10 8269 0500/1700 Fax: +86 10 8269 0506 WWW: www.zgc.gov.cn Beijing Investment Guide 2008-2009

4.5 Beijing Economic and Technological Development Area The Beijing Economic and Technological Development Area (BDA) is located in Yizhang on the East Development Belt. It was inaugurated on August 25, 1994, as a State-level economic development area by the State Council. In June 1999, the Yizhuang Park of ZSTP was launched in the BDA, making it the only State-level development zone in the Chinese capital. It enjoys policy privileges granted by the State to both State-level development zones and State-level high-tech industrial zones. It covers 46.8 square kilometres, which includes an industrial area, business area and residential area. During ten years’ development, an industrial base featuring the foreign investment attraction, high-tech attraction and export enterprises took in shape in this area. BDA is making efforts to promote the cluster development of the electronic information, ecological medicine, equipment manufacturing and auto industries. As of 2007, its high-tech industries had achieved a total output valued at 176.83 billion yuan (US$25.7 billion), with growth of 24.26 percent, and sales income of 281.77 billion yuan (US$40.95 billion), up by 20.35 percent. The BDA has a good investment environment. It has been certified as an ISO14001 Environmental Management System and was approved as an ISO14001 State Model Area, National State-Owned Land Capital Operation Pilot Area, and as a National Industry Water-Saving Model Area and Beijing Community Construction Pilot Area. The BDA has firmed up its high-tech industrial and modern manufacturing base with its excellent accessory facilities and equipment. By the end of 2007, about 2,356 companies were operating in this area, which involved a combined investment of US$16.86 billion, including actual foreign-funded investments totalling US$3.36 billion.

Contact: The Administrative Committee of Beijing Economic and Technological Development Area Address: 4 Wanyuan Jie, Beijing Economic and Technological Development Area Tel: +86 10 6788 1457 WWW: www.bda.gov.cn Regional Investment Guidance 47

4.6 Beijing Tianzhu Export Processing Zone The Beijing Tianzhu Export Processing Zone is located one kilometre from the Beijing Capital International Airport. It was established with the approval of the State Council in April 2000, covering 2.73 square kilometres. It is the most open special area under the supervision of the customs enjoying the most favourable policies, fastest customs clearance, simplest management and most perfect infrastructures, to provide export processing enterprises with an easier and more convenient operational environment. In December 2006, the Beijing Tianzhu Export Processing Zone became one of the seven pioneering export processing zones of China, besides the function of manufacturing, to expand in bonded logistics, research and development, maintenance and examinations, making it an excellent functional special area under the closed management of the customs. Large- scale multinational companies can establish international purchasing and distribution centres to achieve the coordinated development of manufacturing and modern logistics industries. In this zone, when business exports self-used equipment, models or maintenance components, it will be exempted from import customs duty and import linkage taxes; its raw materials and packaging materials enjoy full-amount bonded taxes; the processed export products enjoy exemptions from value-added taxes; products from other domestic regions into this export processing zone can be treated as export products to enjoy export rebates, and the customs service will process declarations based the regulations on export goods. More than 40 enterprises are operating in this zone including enterprises from the United States, Canada, France, United Kingdom, Japan and Hong Kong. These enterprises are involved in electronic information, bioengineering and medicine, jewel processing and mechanical automation. In 2007, this zone realized total imports and exports valued at US$830 million, up by 196 percent.

Contact: The Administrative Committee of Beijing Tianzhu Export Processing Zone Address: R615, Sky Tower, Beijing Tianzhu Airport Industrial Zone, 101312 Tel: +86 10 8048 9510/6307 Fax: +86 10 8048 9505/9605 WWW: www.chinabaiz.com.cn Beijing Investment Guide 2008-2009

4.7 Beijing City-Level Development Zones

Beijing Shilong Economical Devel- Beijing Miyun Economical Devel- opment Area opment Area Key industries: Machinery, bioengi- Key industries: Electronics, auto parts, neering and medicine food Tel: +86 10 6980 3474, 6980 3454 Tel: +86 10 8909 5058, 6904 4661 WWW: www.shilong.com.cn WWW: www.bmida.gov.cn

Beijing Liangxiang Economical Beijing Yanqing Economical Devel- Development Area opment Area Key industries: Bioengineering, medi- Key industries: Bioengineering, medi- cine, new materials, machinery cine, building materials, food Tel: +86 10 8936 0867, 6935 1878 Tel: +86 10 6918 1349 WWW: www.lxgyq.com.cn WWW: www.badaling.com.cn

Beijing Linhe Economical Develop- Beijing Badaling Economical De- ment Area velopment Area Key industries: Autos and auto parts, Key industries: New building materi- optical-mechanical-electronics als, textile, bioengineering, medicine integration, bioengineering and Tel: +86 10 6116 4927/4939 medicine WWW: www.bdlkfq.com.cn Tel: +86 10 8949 2548 WWW: www.lhkfq.com.cn Beijing Yongle Economical Devel- opment Area Beijing Daxing Economical Devel- Key industries: Machinery, building opment Area materials, bioengineering, medicine Key industries: Machinery, electronics, Tel: +86 10 8051 1472/1459 textile WWW: www.yongl.com Tel: +86 10 6021 6786 WWW: www.didz.com.cn Regional Investment Guidance 49

Beijing Fangshan Industrial Devel- Beijing Xinggu Economical Devel- opment Zone opment Area Key industries: Petrochemicals, new Key industries: Auto parts, food, materials, machinery machinery Tel: +86 10 8130 7189 Tel: +86 10 8998 4541, 6996 4071 WWW: cggyy.bjfsh.gov.cn WWW: www.xidz.com

Beijing Tianzhu Airport Industrial Zone Beijing Yanqi Industrial Develop- Key industries: Electronics, optical- ment Zone mechanical-electronics integration, Key industries: Food, auto parts, bioengineering and medicine electronics Tel: +86 10 8048 9568 Tel: +86 10 6166 6615/6617 WWW: www.chinabaiz.com.cn WWW: www.zxjj.com

Beijing Tongzhou Economical Beijing Mafang Industrial Develop- Development Area ment Zone Key industries: Building materials, Key industries: Building materials, machinery, new materials bioengineering and medicine Tel: +86 10 6957 1700/3459 Tel: +86 10 6099 6072, 6099 5867 WWW: www.beijingtidz.com WWW: www.mfgyq.gov.cn

Beijing Changping Xiaotangshan Beijing Caiyu Economical Develop- Industrial Development Zone ment Area Key industries: New materials, food, Key industries: New materials, food machinery Tel: +86 10 8027 1229 Tel: +86 10 6171 4201 WWW: www.caiyu.gov.cn Beijing Investment Guide 2008-2009

4.8 Beijing’s New Towns Beijing will create 11 new towns in Miyun, Pinggu, Huairou, Changping, Mentougou, Fangshan, Daxing, Yizhuang, Shunyi, Tongzhou and Yanqing new towns. The plan for the 11 new towns is already completed and construction of the first three key new towns was launched in 2007, including the Tongzhou New Town, Shunyi New Town and Yizhuang New Town.

Tongzhou New Town The future Tongzhou New Town will be a comprehensive service new town for the sustainable development and the important base for Beijing par- ticipating in the cooperation around Bohai Sea Rim Region. It will be a regional service centre, cultural industrial base and a more liveable waterfront new town. To 2020, the planned population of Tongzhou New Town will be 900,000, and the construction land of the new town will be restricted to 85 square kilo- metres. Shunyi New Town The future Shunyi New Town will become an international hub airport and airport-based industry centre and advanced manufacturing base for driving the regional development. It will be a modern international airport, regional industry engine and green and liveable new town. To 2020, Shunyi New Town’s population will be about 900,000, and the construction land will be 103.9 square metres. Yizhuang New Town Yizhuang New Town will become a comprehensive industrial new town based on high-tech and advanced modern manufacturing industries, which will be a regional industrial centre the industrial development of the Beijing-Tianjin Intercity Corridor. It will be a high-tech industrial centre, high-end service base and international new town that is pleasant for living and working. To 2020, the population of Yizhuang New Town will be about 700,000, and the construction land will occupy 100 square kilometres. Regional Investment Guidance 51

Investment Policies and Management 1 How to Invest 2 Procedures for Enterprise Establishment 3 Taxes and Fees 4 Labour and Social Security Beijing Investment Guide 2008-2009

5.1 How to Invest For foreign investors, any of the following business modes may be used to establish a business entity in Beijing: a joint venture, cooperation, solely foreign- owned enterprises; a foreign-funded joint-stock limited company, cooperative development, foreign companies seeking investment, or a group company for foreign investment enterprises.

5.2 Procedures for Enterprise Establishment

Selecting investment projects, negotiations regarding operational condi- tions, signing of a letter of intent of joint venture and cooperative project

Special field Investment project

Examination and approval by Submission of project proposals to the the relevant department Municipal Development and Reform Com- mission

Submission by the Chinese Pre-registration of corporate party of documents verified by name, applying to proper the proper authorities in case administration of industry and it shares the corporate entity commerce with State-owned assets

Examination and approval of contract and articles of association by the Bu- reau of Commerce

Pre-verification of cor- porate code, to process at Beijing municipal or district or county Admin- Obtainment of approval certificate istration of Quality and Technology Supervision

Business registration with relevant administration of industry and commerce,to register within 30 days after obtainment of the certificate Investment Policies and Management 55

5.3 Taxes and Fees The Enterprise Income Tax Law of the People’s Republic of China issued in 2007 adopts the 25 percent income tax on the foreign investment and foreign enterprises and the preferential policy of “industry preference as principal and regional preference as assistance.” (For details, please see: http://www.bjmbc. gov.cn/web2/index.jsp)

The taxes and fees on the foreign investment and foreign enterprises: Enterprise income tax: 1. Income generated from farming, forestry, animal husbandry and fishery industries enjoys an exemption or 50 percent reduction on the income taxes. 2. Income generated from environmental protection, water and energy saving projects that are in accordance with specific standards get a tax exemption for three years from the year the first operational income is generated, and a 50 percent income tax reduction during another three years in succession. 3. For small-size and lower profit enterprises in accordance with some standards, 20 percent income taxes will be practiced. 4. The high-tech enterprises supported by the State enjoy 15 percent income tax policy. 5. Where a start-up investment enterprise has invested in any small or medium unlisted new and high-tech enterprise by way of equity investment for two or more years, 70 percent of the amount of investment in the small or medium unlisted new and high-tech enterprise may be deducted from the taxable amount of start-up investment enterprise in the year that the enterprise held the stock right for two years; if its not sufficient fro deduction, it can be deducted in the future years.

Value-added tax The three-level value-added tax rates: 1. Seventeen percent taxation rate on selling or importing goods and providing processing and repairing labour services; 13 percent taxation rate on selling or importing goods including foodstuff, edible vegetable oil, coal gas, natural gas, coal/charcoal products for household use; tax-free on exporting goods, except as otherwise stipulated by the State Council. Beijing Investment Guide 2008-2009

2. Enterprises or individuals engaged in goods producing or that provide labour services with annual sales amounts of no more than 1 billion yuan (US$145,751) and enterprises or individuals engaging in goods wholesale or retail with annual sales amounts no higher than 1.8 million yuan (US$262,351) that are confirmed by the tax department as small-scale taxpayers should pay taxes at a 6 percent rate. 3. Foreign investment enterprises engaged in goods exportation, except the crude oil, product oil and other objects stipulated by the State Council, are exempted from value-added taxation.

Business tax All units and individuals engaged in the provision of taxable labour services, transfer of intangible assets or the sale of immovable properties within the territory of the People's Republic of China shall be taxpayers of Business Tax. There are nine business tax items ranging from 3 percent (in the transportation industry) to 20 percent (in the entertainment industry).

Personal income tax 1. For personal wages and commissions of foreigners, the balance after deducting 4,800 yuan (deducting 2,000 yuan of reduction cost and 2,800 yuan of additional reduction cost) from the monthly income is the taxable income. Wages and commissions are applicable to nine-level incremental tax rate. 2. According to the provisions of the taxation law, for labour payments, concession rights fees and property leasing income, a certain standard cost should be deducted, and the balance is the taxable income, applicable to a tax rate of 20 percent. In which, for once-off labour-payment income, if the balance after deducting the cost exceeds 20,000 yuan to 50,000 yuan, it is applicable to the tax rate of 30 percent; and the part exceeding 50,000 yuan will be applicable to the tax rate of 40 percent. Investment Policies and Management 57

3. Property transfer (deducting original value of property), interest, dividends and bonus income, and incidental income are applicable to the tax rate of 20 percent.

Urban real-estate tax Payers of the urban real-estate tax shall be foreign-funded enterprises, foreign-owned enterprises, individual foreign nationals, overseas Chinese and compatriots from Hong Kong, Macao and Taiwan who own property rights in Beijing Municipality. If the property right owner is not in Beijing, the custodian or user (including the renter) of the property should pay the tax instead. The annual urban real-estate tax shall account for 1.2 percent of the original value of property. It shall be collected in two instalments, both within 15 days ahead of April and October, with a 30 percent deduction made in the actual payment of the tax.

Land added-value tax Four-grade progressive rates shall apply to collection of land value added land tax: A 30 percent value added land tax shall be collected on the portion of the added value that does not exceed 50 percent of the total deduction. The rate shall be 40 percent for the portion of the added value that exceeds 50 percent of the total deduction but does not exceed 100 percent of the total deduction. The rate shall be 50 percent for the portion of the added value that exceeds the total deduction by 100 percent but does not exceed the total deduction by 200 percent. The rate shall be 60 percent for the portion of the added value that exceeds the total deduction by 200 percent. Beijing Investment Guide 2008-2009

Stamp Duty The calculation of stamp duty is based on two tax rates: the proportional tax rate and norm-quota tax rate. The proportional tax rate ranges from one in a thousand, five in ten thousand, three in ten thousand to 0.5 in ten thousand; the norm-quota tax rate is five yuan (US$0.73) for each. Urban land use tax The urban land use tax calculates in the six-bracket norm-quota tax rates, ranging from 30 yuan for Bracket I, 24 yuan for Bracket II, 18 yuan for Bracket III, 12 yuan for Bracket IV, 3 yuan for Bracket V to 1.5 yuan for Bracket VI. Deed tax A deed tax is a tariff levied on the recipient of transferred land and housing. The deed tax rate practiced in Beijing is 3 percent. Investment Policies and Management 59

Customs duties Imports: Customs duties and import added-value taxes shall be exempted for equipment imported by a foreign-funded project for its own use provided the project falls in line with the Guidance Catalogue of Industries for Foreign Investment and the equipment is a par with the capital investment for the project. Items in the List of Goods Imported by Foreign-Funded Projects Not Eligible for Exemption from Customs Duties shall be exceptions. Exports: Foreign-funded enterprises shall be exempted from export duties for products produced by themselves except those whose export is restricted or otherwise stipulated by the State. Bonding: Customs shall oversee and administer raw and processed materials, fuel, parts, accessories, devices and subsidiary and packaging materials imported for implementing export contracts the same way as bonded goods. Beijing Investment Guide 2008-2009

5.4 Labour and Social Security The Law of the People’s Republic of China on Employment Contracts, effective January 1, 2008, makes provisions on employment relationships as following:

Labour recruitment Recruitment: When recruiting urban jobless residents and newly growing-up labour forces of Beijing, foreign-funded enterprises (the employer) shall go through the normal procedures of employment used at the job and labour service centres of the districts or counties where they are based. When recruiting Beijing’s agricultural residents, employees shall record the recruitment at the township labour and social security section where the labourers are based, submitting the employment registration. In employing personnel from Taiwan, Hong Kong and Macao for jobs in Beijing, foreign-funded enterprises shall apply to the Beijing Municipal Bureau of Labour and Social Insurance for work permits on their behalf. Make an employment contract: The employer should sign an employment contract with the employee when labour relations are established. When the employer employs an employee dispatched by an organization, the employer should sign the labour dispatch agreement. Probation period: When the period of employment contract is more than three months but less than one year, the probation period should not be longer than one month; when the employment contract is more than one year but no more than three years, the probation period should be no more than two months; when the fixed-term employment contract or open-ended employment contract is more than three years, the probation period should no longer than six months. Change an employment contract: If an employer and an employee agree, an employment contract can be changed. Conclude an employment contract: An employment contract will be concluded when it expires. The employment contract can be extended upon the agreement of the two parties. Rescind an employment contract: When implementing an employment contract, the contract can be Investment Policies and Management 61

rescinded via negotiations between the two parties; either party has the right to terminate a contract if legally entitled. Economic indemnity and compensation: The enterprise, in accordance with the relevant State and municipal legislation, shall pay an employee an indemnity for cancellation of an employment contract not arising from error on the part of the employee. In a given enterprise, the party that acts in violation of the Law of the People’s Republic of China on Employment Contract and thus causes economic losses to the other should compensate the victimized party.

Labour Protection The system of work hours and vacation The employee shall, under normal circumstances, work for not longer than 8 hours per day, and 40 hours per week. With the approval by the Beijing Municipal Bureau of Labour and Social Security, enterprises may practice the system of integrated work hours or the system of irregular work hours. Statutory holidays for the general public are: New Year’s Day, the Spring Festival (the Chinese Lunar New Year), Qingming Festival (Tomb-sweeping Day), Duanwu Festival (Dragon Boat Festival), Mid-Autumn Festival, International Labours’ Day and National Day. Protection of females and minors The employee shall follow through the regulations of China and Beijing on the protection of females and minors. Wages Foreign-funded enterprises may independently decide their own ways of distribution and the rates and scales of wages paid to their employees. Wages paid to the labourers who engage in full-time work must on no account be lower than the lowest rates prescribed by the municipal government, which is 730 yuan per month. As regards the labourers who engage in part-time work, the wages paid to them shall not be less than 8.7 yuan per hour. For work during the statutory holidays, the rate of payment shall not be lower than 20 yuan per hour. In 2007, wages and salaries averaged 3,322 yuan per worker for each month in Beijing. Beijing Investment Guide 2008-2009

Social Security Item Paid by the Enterprise Paid by the Employees Base Value of the Charge Pension Fund 20 percent 8 percent Insurant average monthly wages in the previous year Unemployment 1.5 percent 0.5 percent Insurant average monthly wages in the previous year Insurance against Injuries 0.3–1.6 percent N/A Insurant average monthly at Work wages in the previous year Basic Medical Insurance 9 percent + 1 percent 2 percent + 3 yuan Insurant average monthly wages in the previous year Childbearing insurance 0.8 percent N/A Sum based on the number of qualifying employees

Housing fund The monthly housing fund accumulation of an employee is based on the average monthly salary of the previous year. The monthly housing fund is equal to the average monthly salary of the employee multiplied by 12 percent (this part is paid by the employee) and the average monthly salary of the employee multiplied by 12 percent (part paid by the employer). But according to Beijing Municipal Bureau of Statistics, the monthly maximum of the housing fund of the employ in 2008 cannot surpass the result of the average monthly salary in 2007 of Beijing residents when multiplied by 300 percent. The maximum allowable is 2,392 yuan (US$348.87).

Paid annual leave The Announcement of the State Council on the Regulations of Paid Annual Leave of Employees was approved by the State Council and was effective on January 1, 2008. An employee working in a company for more than one year can enjoy a paid annual leave, and the enterprise should guarantee the annual leave of the employees. The employee can get the same payment as on working during the annual leave. The employee can enjoy five days’ annual leave if he or she worked in one company for more than one year but less than 10 years; The employee can enjoy 10 days’ annual leave if he or she worked for one company for more than 10 years but less than 20 years; the employee can enjoy 15 days’ annual leave if he or she worked for a company for more than 20 years. The national legal holidays and off days do not belong to this annual leave. For details, please see: http://www.bjld.gov.cn/LDJAPP/search/fgdetail. jsp?no=10822 Investment Policies and Management 63

Social Security Item Paid by the Enterprise Paid by the Employees Base Value of the Charge Pension Fund 20 percent 8 percent Insurant average monthly wages in the previous year Unemployment 1.5 percent 0.5 percent Insurant average monthly wages in the previous year Insurance against Injuries 0.3–1.6 percent N/A Insurant average monthly at Work wages in the previous year Basic Medical Insurance 9 percent + 1 percent 2 percent + 3 yuan Insurant average monthly wages in the previous year Childbearing insurance 0.8 percent N/A Sum based on the number of qualifying employees

Investment Services 1 Government Service Departments 2 Commercial Chambers and Investment Organizations 3 Catalogues of Rules and Regulations for Foreign Investment Beijing Investment Guide 2008-2009

6.1 Government Service Departments

Beijing Municipal Bureau of Commerce Beijing Municipal Bureau of Local Taxes Address: 190 Chaoyangmennei Dajie, Address: 8 Chegongzhuang Dajie, Xicheng Dongcheng District, Beijing 100010 District, Beijing 100044 Tel: +86 10 6524 8780 Tel: +86 10 8837 1741 WWW: www.bjmbc.gov.cn WWW: www.tax861.gov.cn Beijing Municipal Commission of Beijing Municipal Bureau of Labour and Development and Reform Social Security Address: D2, Fuxingmen Nandajie, Xicheng Address: 5 Yongnei Xijie, Xuanwu District, District, Beijing 100031 Beijing 100050 Tel: +86 10 6641 5588 Tel: +86 10 12333 WWW: www.bjpc.gov.cn WWW: www.bjld.gov.cn Beijing Municipal Bureau of Industry and Beijing Foreign Exchange Administration Commerce Administration Office of National Bureau of Foreign Address: 36 Suzhou Jie, Haidian District, Exchange Administration Beijing 100080 Address: F9-10, Xijin Plaza, 39 Lianhuachi

Tel: +86 10 8269 1919 Donglu, Haidian District, Beijing 100044 WWW: www.baic.gov.cn Tel: +86 10 6855 9915 Beijing Municipal Bureau of Finance WWW: www.safe.gov.cn/110000/index.html Address: 15 Fucheng Lu, Haidian District, Beijing Municipal Bureau of Public Security Beijing 100037 Address: 9 Qianmen Dongdajie, Dongcheng Tel: +86 10 8854 9204 District, Beijing 100740 WWW: www.bjcz.gov.cn Tel: +86 10 8522 5050 Beijing Municipal Bureau of Land Resources WWW: www.bjgaj.gov.cn and Housing Beijing Customs Address: 2 Hepingli Beijie, Dongcheng District, Address: A10 Guanghua Lu, Chaoyang District, Beijing 100013 Beijing 100026 Tel: +86 10 8854 9114 Tel: +86 10 6539 6114 WWW: www.bjgtj.gov.cn WWW: beijing.customs.gov.cn Beijing Municipal Bureau of State Taxation Beijing Municipal Bureau of Entry-Exit Address: 10 Chegongzhuang Dajie, Xicheng Inspection and Quarantine District, Beijing 100044 Address: 6 Tianshuiyuan Jie, Chaoyang District, Tel: +86 10 8837 2266 Beijing 100026 WWW: www.bjsat.gov.cn Tel: +86 10 5861 9900 WWW: www.bjciq.gov.cn Investment Services 67

Beijing Municipal Commission of Science Beijing Municipal Bureau of Tourism and Technology Address: Rm. 1405, Tourist Administration of Address: 16 Xizhimen Nandajie, Xicheng Beijing, 28 Jianguomenwai Dajie, Chaoyang District, Beijing 100035 District, Beijing 100022 Tel: +86 10 6615 3395 Tel: +86 10 8516 2288 WWW: www.bestinfo.net.cn WWW: www.bjta.gov.cn Beijing Municipal Commission of Industrial Promotion 6.2 Commercial Chambers and Address: 6 Gongti Beilu, Chaoyang District, Investment Organizations Beijing 100027 Tel: +86 10 8523 5626 China-Australia Chamber of Commerce WWW: www.bjid.gov.cn Address: Rm. 303, E floor, Beijing Hong Kong Beijing Investment Promotion Bureau Macau Centre Office Tower, 2 Chaoyangmen Address: F3, 4, Building F, Fuhua Mansion, 8 Beidajie, Dongcheng District, Beijing Chaoyangmen Beidajie, Dongcheng District, Tel: +86 10 6595 9252

Beijing 1000027 Belgian Chamber of Commerce in China Tel: +86 10 6554 1880 Address: Rm. 709, CYTS Plaza, 5 Dongzhimen WWW: www.investbeijing.gov.cn Nandajie, Dongcheng District, Beijing Municipal Office of Overseas Chinese Affairs Tel: +86 10 6465 1014 Address: 118 Xizhimennei Dajie, Xicheng Danish Chambers of Commerce in China District, Beijing 100035 Address: Office C-319, Beijing Lufthansa Centre Tel: +86 10 6600 1088 Office Building, 50 Liangmaqiao Lu, Chaoyang WWW: www.bjqb.gov.cn District, Beijing Foreign Affairs Office of the People’s Tel: +86 10 6467 5748 Government of Beijing German Chamber of Commerce in China Address: 2 Zhengyi Lu, Dongcheng District, Address: Rm. 0811, Building 2, Landmark Towers, Beijing 100744 8 Dongsanhuan Beilu, Chaoyang District, Beijing Tel: +86 10 6519 2708 Tel: +86 10 6590 0926 WWW: www.bjfao.gov.cn French Chamber of Commerce and Industry Beijing Municipal Office of Taiwan Affairs in China Address: F3, Donglian Plaza, 8 Deshengmen Address: F6, Building B, Novotel Xinqiao Beijing, Dongdajie, Xicheng District, Beijing 100009 2 Dongjiao Minxiang, Dongcheng District, Tel: +86 10 8408 0909 Beijing WWW: www.bjstb.gov.cn Tel: +86 10 6512 1740 Beijing Investment Guide 2008-2009

China-Philippines Business Association Swedish Chamber of Commerce in China Address: 57 Xingfucunzhong, Chaoyang Address: Rm. 313, Radisson SAS Hotel, A 6 Bei District, Beijing Sanhuan Donglu, Chaoyang District, Beijing Tel: +86 10 5166 5656 Tel: +86 10 5922 3388 ext. 313 Korean Chamber of Commerce and Swiss Chinese Chamber of Commerce Industry in China Address: Rm. 100, CIS Tower, 38 Liangmaqiao Address: Rm. 909, Hyundai Motor Tower, 38 Lu, Chaoyang District, Beijing Xiaoyun Lu, Chaoyang District, Beijing Tel: +86 10 6432 2020 Tel: +86 10 8453 9756 Thailand Chamber of Commerce in China Dutch Chinese Chamber of Commerce Address: Rm. 2-102, Building 9, Anhuili Sanqu, Address: Rm. 606, Huian Xuan, A17 Anhui Lu, Chaoyang District, Beijing Chaoyang District, Beijing Tel: +86 10 6491 6531 Tel: +86 10 6495 6747 Spanish Chamber of Commerce in China Malaysian Chamber of Commerce and Address: 304B, Grand Rock Plaza, 13 Xinzhong Industry in China Xili, Dongcheng District, Beijing Address: Rm. 1110, Building 1, Landmark Tel: +86 10 6416 9774 Building, 8 Dongsanhuan Beilu, Chaoyang Hong Kong Chamber of Commerce in China District, Beijing Address: Rm. 918, Building 2, Bright China Tel: +86 10 6590 6828 Chang An Building, 7 Jianguomennei Dajie, The American Chamber of Commerce in the Dongcheng District, Beijing People’s Republic of China Tel: +86 10 6510 1583 Address: Rm. 1903, China Resource Building, 8 Singapore Chamber of Commerce and Jianguomen Beidajie, Dongcheng District, Beijing Industry in China Tel: +86 10 8519 1916 Address: F2, Cat Lifestyle Mall, A10 Jiuxianqiao European Union Chamber of Commerce Lu, Chaoyang District, Beijing in China Tel: +86 10 5838 5223 Address: Office C-412, Lufthansa Center Office China–Italy Chamber of Commerce

Building, 50 Liangmaqiao Lu, Chaoyang District Address: Unit 2607, Full Tower, 9 Dongsanhuan Tel: +86 10 6462 2065 Zhonglu, Chaoyang District, Beijing The Japanese Chamber of Commerce and Tel: +86 10 8591 0545 Industry in China British Chamber of Commerce in China Address: Rm. 104, F1, Chang Fu Gong Office Address: Rm. 1001, China Life Tower, 16 Building, A 26 Jianguomenwai Dajie, Chaoyang Chaoyangmenwai Dajie, Chaoyang District, Beijing District, Beijing Tel: +86 10 8525 1111 Tel: +86 10 6513 0829 Investment Services 69

The US–China Business Council Japan’s Trade Promotion Organization, Address: Rm. 10-01 CITIC Building, 19 Beijing Representative Office Jianguomenwai Dajie, Chaoyang District, Beijing Address: Rm. 7003, Chang Fu Gong Office Tel: +86 10 6592 0727 Building, A 26 Jianguomenwai Dajie, Chaoyang Korea Trade-Investment Promotion Agency, District, Beijing Beijing Office Tel: +86 10 6513 7075 Address: Rm. 502, Hyundai Motor Tower, 38 Japan’s International Trade Promotion Xiaoyun Lu, Chaoyang District, Beijing Associate, Beijing Office Tel: +86 10 6410 6162 Address: Rm. 1801 A, CITIC Building A, 19 Korea–China Environmental Industry Centre Jianguomenwai Dajie, Chaoyang District, Beijing Address: Rm. 2003, Full Tower, 9 Dong Sanhuan Tel: +86 10 6500 4050 Zhonglu, Chaoyang District, Beijing Japan–China Economic Trade Centre, Tel: +86 10 8591 0998 Beijing Office Korean International Trade Association Address: Rm. 608, Building 8, Julong Garden, 68 Beijing Branch Xingzhong Jie, Dongcheng District, Beijing Address: Rm. 1201, China World Trade Center Tel: +86 10 6551 6055 Tower 1, 1 Jianguomenwai Dajie, Chaoyang Asia Management Association District, Beijing Address: Rm. 2003, Fuhai Centre E, 17 Daliushu Tel: +86 10 6505 2671 Lu, Haidian District, Beijing Beijing Office of Korea Local Authorities Tel: +86 10 6211 4996 Foundation for International Relations Canada China Business Council Address: No. 10, F11, Air China Plaza, 36 Xiaoyun Address: Rm. 1802, CITIC Building, 19 Lu, Chaoyang District, Beijing Jianguomenwai Dajie, Chaoyang District, Beijing Tel: +86 10 8447 5277 Tel: +86 10 6512 6120 Japan–China Economic Associate, Beijing Office British Centre Address: Rm. 401, Chang Fu Gong Office Address: Rm. 1001, China Life Tower, Building, A 26 Jianguomenwai Dajie, Chaoyang Chaoyangmenwai Dajie, Chaoyang District,

District, Beijing Beijing Tel: +86 10 6513 9881 Tel: +86 10 8525 1111 Japan–China Investment and Promotion China–Britain Business Council Institution, Beijing Office Address: Rm. 1001, China Life Tower, Address: Rm. 307, Chang Fu Gong Office Chaoyangmenwai Dajie, Chaoyang District, Beijing Building, A 26 Jianguomenwai Dajie, Chaoyang Tel: +86 10 8525 1111 District, Beijing Tel: +86 10 6513 9890 Beijing Investment Guide 2008-2009

6.3 Laws and Regulations for 6. Regulations for Merger with and Acquisition Foreign Investment of Domestic Enterprises by Foreign Investors 1. Law of the People’s Republic of China on (August 11, 2006) Foreign-Capital Enterprises (revised in 7. Catalogue for the Guidance of Foreign October 2001) Investment Industries (2007 Revision) 2. Law of the People’s Republic of China on (November 8, 2007) Chinese-Foreign Equity Joint Ventures (revised 8. Catalogue of Encouraged High-Tech Products in October 2001) for Foreign Investment 2006 (February 25, 3. Rules for the Implementation of the Law of the 2007) People’s Republic of China on Foreign-Funded 9. Enterprise Income Tax Law of the People’s Enterprises (July 23, 2004) Republic of China (March 19, 2007) 4. Regulations for the Implementation of the 10. Law of the People’s Republic of China on Law of the People’s Republic of China on Employment Contracts (June 29, 2007) Joint Ventures Using Chinese and Foreign 11. Anti-Monopoly Law of the People’s Republic Investment (August 24, 2004) China (August 30, 2007) 5. Detailed Rules on the Implementation of 12. Regulations for the Implementation of the the Law of People's Republic of China on Enterprise Income Tax Law of the People’s Sino-Foreign Joint Cooperative Ventures Republic of China (December 6, 2007) (September 4, 2004)

For more information, please visit: http://www.bjmbc.gov.cn/web2/index.jsp For detailed information, please visit the Web site of the Beijing Municipal Bureau of Commerce at: http://www. bjmbc.gov.cn/web2/index.jsp Investment Services 71

Sponsor Beijing Municipal Bureau of Commerce Editor-in-Chief Lu Yan Deputy Editor-in-Chief Zhou He Editorial Board Liang Jingyuan, Zhang Wenzhou, Wang Lin, Liu Xiaoji, Huang Linzhi, Wang Jun, Wang Yonghua, Gao Huada, Qu Cheng, Li Jianrui, Zhou Yuezhen, Zhang Liling, Song Jimei, Lin Yuanfu, Sun Miao Executive Editor Li Yanhui Editor Fu Rong, Zhou Bin, Li Jiakai Language Consultant Charles J. Dukes

Photographers Teng Ke, Brigitte Hiss, JÖrg F. MÜller, Wang Huiming, Yan Yusheng, Zhou Shijie, Zhou Bin, Tay Kay Chin, Ma Yixing, Wang Jianzhong, CFP, IC

Art Design Wang Xuqing, Liu Jie Design & Production Yue Chuang Information Consultant Beijing Great Thoughts Consulting Co., Ltd. Organizer Beijing Foreign Cultural Exchanges Center

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