Beijing Investment Guide 1 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 3 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 7 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 9 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