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Shenzhen Shenzhen China’s City of Innovation Overview and Incentives for R


  • pg 1
China’s City of Innovation
- Overview and Incentives for R&D
                                Andrew Pan & Grace Chen
                                 For Zebra Technologies
                              September 25, 2009  California

• What’s Shenzhen?
• Why Shenzhen?
• What Does Shenzhen Offer?
            What’s Shenzhen?
Shenzhen is in the seaboard area of South China neighboring Hong
Kong, and in the Pearl River Delta
Shenzhen in Greater China

Shenzhen in 1985
Shenzhen Today
                    Facts and Figures

• China’s 1st and most successful
  Special Economic Zone

• Population: 12 million; Area: 1,953
  square kilometers

• China’s 4th largest city economy;
  China’s manufacturing,
  technology, trade and port city

• New city, high priority for
  international trade and foreign
  direct investment

• A clean, safe, recreational city
  with mild weather and the best
  living quality in China
                     Major Industries

• Consumer products manufacturing
• High-tech products manufacturing and R&D
   – IT
   – Biotech
   – Clean-tech
• Logistics center in South China
   – Port of Shenzhen is world 4th largest container
   – Shenzhen Airport is China’s 4th busiest airport
   – Shenzhen has an advanced and extensive
     highway and railway system
• Regional financial center
   – Shenzhen Stock Exchange is one of two stock
     markets in mainland China
            Why Shenzhen?
   Element 1: Proximity to Hong Kong

Shenzhen was established                              Talent Inflow

due to its proximity to Hong
Kong. This historically led to
                                        Economy                             Immigration
                                                                             & Migration

a great deal of cross-
fertilization due to a constant   Financial         Proximity                    Cultural
exchange of people, ideas,          Center            to HK

culture, business practices
and norms                                Services
                                          Center                      Multilingual

                Why Shenzhen?
             Element 2: China’s 1st SEZ

Shenzhen was granted SEZ status in                           Industry
1980 established by leader Deng
Xiaoping to boost the country's
                                               Mix of                            Investor
                                              Industry                            friendly
reform process, open up the economy                                             environment

and commence China’s                      Mix of
                                                          China’s 1st
modernization drive. This resulted in   Manufac
                                                                                        & SOPs
the creation of a liberalized and
planned environment long before it
                                                Domain                        Talent
happened anywhere else in China                  Skills                     variety &
Combining these 3 elements gives Shenzhen unique
  location advantages for the ITO/BPO Industry

                                                      Demographic Advantage
       Elements                                                      Shenzhen        Beijing                Shanghai
       GDP Growth Rate (2003-2008)                                    12.30%          9.20%                   10.60%
       Population Growth Rate (2000- 2007)                            28.60%          9.38%                   10.07%
       % of Employed Population                                        76%             49%                         48%
       Growth in Employed Population (2003-2008)                       7.95%          3.16%                    2.88%
       Pay Difference Index                                             100             134                        122

Element 1: Proximity to Hong Kong                                               Element 2: China’s 1st SEZ
                        Talent                                                                        Industry
                        Inflow                                                                       knowledge
                                                                                       Mix of                           Inve stor
        O pe n                       Immigration                                      Industry                           friendly
       Economy                       & Migration                                      Ve rticals                      e nvironment
                                                                                    Mix of
    Financial         Proximity                                                                     China’s 1 st
                                        Cultural                                  Manufac                                 Benefits
     Se rvices          to HK                                                                         SEZ
                                       Adaptability                               &Services                               & SO Ps
     Ce nter
          Le gal                                                                                                     Tale nt
         Se rvices                Multilingual                                                                      variety &
         Ce nter                                                                                                      de pth
                     Multicultural                                                                 Infrastructure
                   Human Capital
• Shenzhen population has an average age of 28 years

• Shenzhen area has 121 full time colleges and universities with
  220,000 graduates every year

• Shenzhen also draws graduates from China and overseas because of
  the dynamic economy and abundant opportunities

• Shenzhen has 791,000 skillful technical and engineering personnel,
  mainly IT engineers

• The English level is higher than the average level of the country

• Labor cost is highly competitive
•       Telecom
    –      Shenzhen has 24.3 million phone lines, 5.8 million are land lines and
           18.4 million are mobile
•       Internet Access
    –      Dial-up networks, broadband networks, IP metropolitan area
           networks, wireless data networks
    –      10 GB/s backbone bandwidth and 2.5 GB/s transmission bandwidth
•       Power Supply
    –      Shenzhen’s Municipal Power Authority provides an uninterrupted
           source of electrical power to 4.16 million users

            SEAPORT           LAND PORT           AIRPORT

              21.10             177.7              20.62
              Million           Million            Million
                               (passenger)        (passenger)

           4th in the world    1st in China       4th in China

                                              2007 Figures
Hong Kong International Airport is 45 minutes from Shenzhen with non-
stop flights to all major North American cities

What Does Shenzhen Offer?

 • City Policies
    – Shenzhen Municipal Government’s Provisions on Development
      of High-tech Industries
    – Shenzhen Municipal Government’s Provisions on Expediting
      the Development of R&D and High-end Service Industries
What Does Shenzhen Offer?
• City Incentives

   • Exemption and/or rebate of corporate income tax

   • Exemption of tariffs and import value-added taxes for self-use imported

   • Financial support for enterprises applying for international certification,
     e.g. ISO, CMMI/CMM, etc.

   • R&D expenditure subsidies and tax deduction

   • Financial support for enterprises developing products with
     independent intellectual property

   • Loan interest subsidies

   • Office space rental subsidies
What Does Shenzhen Offer?

 • Shenzhen City Government attaches great importance to IPR
   protection, with a strategic position to build the city as an
   innovation-oriented city

 • China’s State Intellectual Property Bureau and Shenzhen City
   Government signed the "Protocol for Jointly Building a Strong
   IPR City," making Shenzhen the first city in China to position
   IPR as a priority (December 13, 2007)
Shenzhen Software Park
About Our Office

          • Based in Los Angeles, CA
          • Shenzhen’s only investment
            and trade promotion office in
            North America
          • Our FREE services:
             – Provide China/Shenzhen
               general/business information
             – Consult on China/Shenzhen
               business policies and
             – Facilitate business setup and
             – Chinese government relations
             – Support daily operation

 Please contact us for more information:
   Andrew Pan, Chief Representative
    Grace Chen, Operations Manager
   Tel: 213-628-9888 Fax: 213-628-8383
E-mail: andrewpan@shenzhenoffice.org or
     Web: www.shenzhenoffice.org

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