Investment Environment and Industries Guided for Investment

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					 Investment Environment and the Guides for Investment

General Information about Hunan<top>


A Glimpse of Key Development Zones in Hunan Province<top>


Investment Environment<top>


Industries Guided for Investment<top>




I. General Information about Hunan<top>

1.1 Geographical position
Hunan Province is located in central south of China, between latitudes 24°39'N to 30°08'N, and
longitudes 108°47'E to 114°15'E, covering an area of 210,000 km2. It is located in the south of the
famous Dongting Lake, hence the name Hunan, which literally means south of the lake in Chinese.
It is also called Xiang for short, named after the longest river in the province. In the north, there is
Hubei province. The two provinces are separated by the Yangtze River. Linking the rivers and seas,
Hunan belongs to the open and development belt of the middle and lower reaches of the Yangtze
River; In the south, it is adjacent to Guangdong and Guangxi provinces, closing with such open
coastal areas and Hong Kong and Macao. The direct container trucks can get to Hong Kong in a
single day; bonded Jiangxi province on the east, Chongqing City and Guizhou province on the
west. Hunan, located between the south coastal open belt and the Yangtze open belt, enjoys a
favorable geological location. The province is administratively divided into 13 municipalities
under the jurisdiction of the provincial government, and 1 autonomous prefecture. The capital city
of Hunan is Changsha. The province has a population of more than 70,000,000.

1.2 Natural Resources
Rich in natural resources, Hunan has long been known as a Land of Rice and Fish, the Home of
Nonferrous Metals, Home of Non-metallic Minerals and a Tourists Resort. There are more than
2,000 species of woody plants, including 1,000 species of economic plants, 800 species of
medicinal plants and 60 species of rare plants (put on the list of the state protection). The growing
forest tree amount is 314 million m3, with the forest coverage rate of 57.01%. There are over 40
kinds of rare birds and animals, and over 160 kinds of natural fishes. The surface-water totals
more than 200 million cubic meters and the underground water stock comes to 45.5 billion cubic
meters. Waterpower resources add up to 15.32 million kW (15,320MW), and exploitable
waterpower reaches 10.83 million kW (10830MW). Of all the more than 160 minerals discovered
in the world, Hunan has 141, among which 41 kinds such as antimony, tungsten, manganese and
etc., rank at the top five in China in terms of recoverable storage amount. There are 10 tourist
areas and more than 100 scenic spots in Hunan. Mountain Hengshan or Nanyue Mountain is a
special Buddhism mountain among China's five sacred mountains; Yueyang Pavilion is one of the
three famous ancient pavilions south to the Yangtze River. Especially, the WulingYuan Scenic
Zone, with Zhangjiajie National Forest Park as the center, once being developed, reveals its
wonderful, elegant, tranquil, and precipitous sceneries. Therefore, it is praised as great natural
wonders by the travelers from China and abroad, and it is inscribed on the World Heritage List by
United Nations Educational Scientific and Cultural Organization.
Located in central subtropical zone, Hunan has a continental wet monsoon climate. Its annual
temperature averages 16℃-18℃, sunshine time 1,300-1,800 hours, frost-free period 278-300 days,
and precipitation 1,200-1,700mm. With sufficient sunshine, plentiful rain and distinct seasons,

                                                   1
Hunan has favorable conditions for agricultural production.

1.3 Fundations of Economy and Technology
     Economic aggregate has reached a higher stage.According to the preliminary
accounting, in 2010, the regional GDP of Hunan was 1590.212 billion Yuan, increased by 14.5%,
0.8 % over the previous year. Among which the added value of the Primary Industry was 233,944
billion Yuan, increased by 4.3%; the added value of the Primary Industy was 233.944 billion Yuan,
increased by 4.3%, the added value of the Second Industy was 731.356 billion Yuan, increased by
20.2%; the added value of the Tertiary Industry was 624.912 billion Yuan, increased by 11.5%.

      Economic restructuring obtained new achievements.                          Three industries

of Hunan changed from 15.1∶43.5∶41.4 of the previous to 14.7∶46.0∶39.3. The added value
of industry took up 39.5% of Regional GDP and the contribution rate of the Primary, Secondary
and Tertiary Industry to economic growth was 3.5%, 62.3% and 34.2% respectively. The
contribution rate of industrial added value in economic growth ascent to 56.1%; the added value of
productive services was 283.967 billion Yuan with the contribution rate of 16.7% to economic
growth. The high-tech technology industrial added valve accounted for 12.3% of the Regional
GDP and rose 1.4 % over the previous year. The added value of the Non-State-Operated Economic
was 893.675 billion Yuan, rose 15.8%, accounting for 56.2% of Regional GDP, with a
year-on-year increase of 0.7%.
    The construction of “two oriented society” in Changzhutan has led a concerted
development of regional economy. The first phase of the construction of Changzhutan
experimental zone has been basically finished, when the common sense in “two oriented society”,
the potency dimension in pushing the experimental zone construction and the motivating function
of Changzhutan are unprecedented. The construction of Changsha metro, inter-city railway along
Changzhutan line and comprehensive hub project of Xiangjiang Changsha, and Xiangjiang scene
zone has been accelerated, the pilot spot of “integration of three nets” have been initiated, the
same with the construction of China Super Calculator Changsha Center and China Aerospace
Science and Technology City as well as the five demonstration zones. Changzhutan city group has
become one of the eight national comprehensive high-tech industrial bases with Xiangtan
High-tech Development Zone and Ningxiang Economic Development Zone upgraded into
national level zone. In 2010, the GDP of Changzhutan city group has reached RMB 1256.017
billion Yuan, seeing an increase of 15.2%, which covers 79% of the whole province.
     The livelihood has achieved further improvement. The total financial
investment of Hunan province on the key livelihood construction such as Social
Insurance and Employment, urban and rural community affairs, Medical Treatment
and Public Health reached 75.795 billion Yuan, taking up 28% of the financial expenditure.
The newly increased urban and rural employees were 708,300, increased 105,000 over the
previous year. The employment aid for Zero-employment families maintained dynamic zero

                                                2
clearing. The New Type Rural Cooperative Medical Service has a compensation rate of 65.6%
within the planned area; the monthly per capita allowance for urban residents entitled to basic
living allowances was 155 Yuan, 18 Yuan over the previous year; the monthly per capita
allowances for rural residents entitled to basic living allowances was 55 Yuan, 8 Yuan over the
previous year. During the whole year, 1.45 million urban residents and 2.627 million rural
residents gained government’s minimum living gurantee. The Ney Type Rural Social Endowment
Insurance Pilot Counties expanded to 46. The unsafety of the drinking water for 3.1419 million
rural residents was removed. 186 nursing homes were reconstructed. 8,100 farmers’ bookstores
were all completed. The newly increased low-rent housing reached 113,300, and 44,386 rural
dangerous buildings were renovated, and 3971 household of professional fishermen in “Xiang, Zi,
Yuan, Li River” Basin settled down ashore.

1. Agriculture



     Agricultural production remained stable. The grain growing area of Hunan is
4.8091 million hectares, year on year increase of 0.2%; the growing area for cotton is 175,000
hectares, up by 6.5%; the growing area for oil plants was 1.2114 million hectares, up by 7.3%; the
growing area for vegetables was 1.1331 million hectares, increasing by 6.5%; the growing area of
sugar was 15,300 hectares, decreased by 0.2%. The grain output maintained basic stability. The
output of cotton, oil plants, vegetables and tobacco leaf increased by 7.1%, 9.8%, 9.8% and 1.3%
respectively. The gross output of meat, eggs, milk and sea food rose 3.8%, 3.2%, 1.6%, and 5.5%
respectively. The total value of agricultural production, forestry, husbandry and fishery increased
by 4.3%, 6.9%, 3.4% and 5.3% respectively.

    Agricultural foundation has achieved continuous improvement. The
investment in the fixed assets in the rural areas of Hunan Province is 104.555 billion
Yuan, increased by 28.2%. The financial affairs expenditure for agriculture, water and forestry is
32.212 billion Yuan, increased by 16.6%. During the whole year, the start-working Water Projects
were 779,000 with an investment of 12.206 billion Yuan, completing 366 million cubic meters of
earth and stone for Water Projects. The newly increased effective irrigation area of farmland was
23,200 hectares, and the newly increased water-saving irrigation area was 22,300 hectares. The
rural power consumption was 9.828 kW, increased by 5.1%. The total power of agricultural
machinery is 46.45 million kW, up by 6.7%.

    Agriculture industrialization has speeded up. The enterprises engaged in
processing agricultural products were 48,500, rose 1.0%. The sales income of the leading
enterprises of 345 state and provincial grade agricultural industries is 190.00 billion Yuan grew by
26.7%; achieved a profit of 3.81 billion Yuan, grew by 14.6%. The professional cooperative
societies were 6,777, up by 67.3%; the members of the cooperative societies reached 1.1555
million, increased by 37.6%. The newly built agricultural standardized representative areas are 34.




                                                 3
    The new rural construction has made new progress. The cement (asphalt)
roads between new towns and villages were 13,546km in Hunan. 100 representative villages
for rural cleaning project were built up and 158,100 methane-generating pits were newly
established. Newly appeared 1,494 natural villages having access to telephone; 1,400 rural
representative areas for comprehensive information services were built up with 2,004
administrative villages accessible to Broad Band Internet. Hunan has 13.2081 million rural
migrant workers (not including this village and town), realizing 120.365 billion Yuan outdoor
workers income.


2. Industry and construction field

     The development of industry has speeded up. All over the province, the added
value of the industries reached 627.51 billion Yuan, grew by 21.2%, 2.7 % faster than that of
the previous year. The added value of the scaled industry rose 23.4% with a year on year increase
of 2.9%. The added value of Non-State scaled industry was 26.5%, 3.1 % faster than scaled
industry. Seen from Light and Heavy industry, the added value of the light industry increased by
20.0%; the added value of heavy industry rose 25.1%. The added value of scaled industry in
industrial gardens of provincial level or above reached 222.194 billion Yuan, rose 30.0%.

    Most major industrial production maintained comparatively rapid growth.
As to statistics of 437 kinds of major industrial production for scaled industry, the
output of 335 kinds increased, accounting for 76.7% of the total products. The raw coal
increased by 12.3%, the cigarette rose3.5%, the machine-made paper and paperboard grew by
25.2%, the processing amount of the crude oil increased by 5.6%, the cement up by 14.8%, steel
products up by 20.8%, ten kinds of non-ferrous metal up by 23.8%, the concreting machinery up
by 133.8%, the automobiles up by 17.5% and the power generation grew by 19.5%.




                                               4
                              Chart 1: Main product output of scaled industry in Hunan in 2010


                                                                                        Year on year
                                                                           Absolute
               Product Name                                 Unit
                                                                           Number
                                                                                        Growth (%)




                                                   Ten Thousand Tonne
                  Raw Coal                                                 7670.12          12.3
                                                   Ten Thousand Tonne
                   Raw Salt                                                 228.56          9.4
                                                   Ten Thousand Tonnes
                     Rice                                                   829.09          42.1
                                                   Ten Thousand Tonnes
                    Forage                                                  993.73          18.2
                                                   Ten Thousand Tonnes
           Refined edible food oil                                          219.31          25.2
                                                       Hundred Million
                   Cigarette                                               1752.74          3.5
                                                   Ten Thousand Tonnes
   Machine-made paper and paperboard                                        384.63          25.2
                                                   Ten Thousand Tonnes
                  Crude Runs                                                590.67          5.6
                                                   Ten Thousand Tonnes
      Sulphuric Acid (100% discount)                                        260.34          17.3
                                                   Ten Thousand Tonnes
Sodium Hydroxide(Caustic soda)(100%discount)                                73.49           5.8
                                                   Ten Thousand Tonnes
             Synthesis Ammonia                                              164.06          -8.4
                                                   Ten Thousand Tonnes
Agriculture chemical fertilizer(pure discount)                              355.93          -1.6
                                                   Ten Thousand Tonnes
                    Cement                                                  8701.2          14.8
                                                 Ten Thousand Weight Box
                  Plate Glass                                               1756.2          1.8
                                                   Ten Thousand Tonnes
                   Cast Iron                                                1700.64         22.7
                                                   Ten Thousand Tonnes
                  Crude Steel                                               1766.52         23.0
                                                   Ten Thousand Tonnes
                      Steel                                                 1811.73         20.8
                                                   Ten Thousand Tonnes
      Ten kinds of non-ferrous metals                                       249.05          23.8
                                                   Ten Thousand Tonnes
                     Silver                                                 3816.22         25.6
                                                      Ten Thousand units
              Lifting Equipment                                             87.58           52.7
                                                        Ten Thousand
           Concreting Machinery                                              4.78          133.8
                                                        Ten Thousand
                 Automobile                                                 25.15           17.5
                                                      Ten Thousand kW
                      Car                                                   11.58           54.3
                                                      Ten Thousand kW
           Generating Equipment                                             119.97          53.7
                                                      Ten Thousand KVA
         Alternating-current Motor                                         1632.16          26.6
                                                  Hundred Million KWH
            Potential Transformer                                          10733.24         33.8
            Generating Capacity                                            1186.44          19.5




                                                  5
 Industry structure was further optimized. Among the scaled industry in Hunan, the added
value of industry of “high degree of processing” is 188.5 billion Yuan, increased by 33.5%, and
the added value of hi-tech industries was 27.139 billion Yuan, increased by 30.9%, 10.1 and 7.5
higher than that of scaled industry; the added value of the industry of “high degree of processing”
and hi-tech industries accounted for 32.0% and 4.6% of the added value of the scaled industry,
increase 1.9 and 0.2 percent over the previous year. The production value of the new products for
scaled industry was 248.97 billion Yuan, increased by 41.3%; taking up 13.2% of the total value
out-put of scaled industry, year on year growth of 2.8%.




    Major categories of industry have all achieved profit. The main business
income of the scaled industry in Hunan is 1810.444 billion Yuan, increased by 40.0%;
the realized profit was 85.549 billion Yuan after balancing the profit and loss, increased by
46.1%; chemical materials and chemical products manufacturing achieved 6.201 billion, increased
by 95.3%;The profit of the processing industry of non-ferrous metal metallurgy and calender was
5.094 billion Yuan, increased by 83.6%;The profit of the manufacturing of special devices is
16.593 billion Yuan, increased by 77.7% ; The manufacturing of communication and
transportation is 5.433 billion Yuan, increased by 75.0%. At the end of the year, enterprises’ loss
range was 5.8%, dropped by 3.6 % that of the previous year.

       Chart 2: The benefit of major industries of the scaled industry in Hunan in 2010
                                                          Absolute Number              Over or below
                  Index
                                                       (Hundred Million Yuan)       the previous year(%)




                                                6
Main business income
                                                                        18104.44                      40.0
Profit tax amount
                                                                         1917.19                     36.6
Total amount of profit
                                                                         855.49                      46.1
     Coal Mining Washing Industry
                                                                          43.46                      60.8
     Agriculture and sideline food processing industry
                                                                          39.04                      41.7
     Tobacco processing industry
                                                                          66.91                       -6.4
     Oil processing, coking and nuclear fuel processing
                                                                          5.85                       -19.6
     Chemical Materials and chemical products manufacture
                                                                          62.01                      95.3
     Pharmaceutical Manufacturing
                                                                          22.73                      29.6
     Nonmetal Mineral product industry
                                                                          52.52                      48.7
     Metallurgy of ferrous metal and calendar processing industry
                                                                          0.89                       -95.2
     Non ferrous metal metallurgy and calendar processing industry
                                                                          50.94                      83.6
     General Equipment manufacturing
                                                                          49.93                      57.4
     Special Equipment manufacturing
                                                                         165.93                      77.7
     Transportation Equipment manufacturing
                                                                          54.33                    75.021.9
     Electric apparatus and equipment manufacturing
                                                                          31.31              268 million Yuan loss
     The production and supply of electric power and heating power
                                                                          8.51              during the corresponding
                                                                                                    period




               The construction has accelerated growth. The total value out-put of the
          construction industry in Hunan reached 313.5 billion Yuan, increased by 25%, 6.6 % faster
          than that of the previous year; The added value of construction industry is 103.8 billion Yuan,
          accounting for 6.5% of Regional GDP of Hunan, 0.9 % than that of the previous year. The total
          value of the construction enterprises and overall contracted enterprises with qualification grade
          was 11.08 billion Yuan, up by 30%. The construction area of housing was 275.029 million square
          meters, grew by 22.6%; the built up area of house building was 99.8439 million square meters,
          increased by 1.8%.




          3. Fixed assets investment


               Investment in the fixed assets has witnessed relatively rapid increase. The
          total investment in the fixed assets of the whole society in Hunan is 982.106 billion
          Yuan, up by 27.6%. Among which the urban area took up 877.551 billion Yuan, grew by 27.5%.
          Among the investment in the fixed assets of the whole society, the state-investment was 332.232
          billion Yuan, rose13.6%; the non-state investment was 649.875 billion Yuan, occupying36.2%.
          The proportion of non-state investment was up to 66.2% of investment in fixed assets, a year-on
          year increase of 4.2 percent. In urban investment in the fixed assets, the investment on Primary
          Industry was 21.002 billion Yuan, increased by 60.4%, the investment on Secondary Industry was
          370.364 billion Yuan, grew by 30.2%; the investment on Tertiary Industry was 486.185 billion



                                                                    7
Yuan, up by 24.5%. The investment on real estate development was 146.933 billion Yuan,
rose35.5%.

   The investment structure has been optimized. The investment on
manufacturing reached 287.704 billion Yuan, increased by 33.8%, accounting for 32.8% of the
urban investment in fixed assets, rose 1.6% over the previous year. The investment on the Hi-tech
Technology Industry is 24.735 billion Yuan, taking up 2.8% of the investment in the fixed assets
in urban area; the investment on technical improvement was 305.288 billion Yuan, accounting for
34.8% of the investment in the fixed assets in urban area, increased by 0.5 and 1.2 percent over
the previous year respectively.

     The key projects construction has gained smooth progress. All over the province, 175 key
projects under construction completed an investment of 150.54 billion Yuan, accounting for
15.3% of the whole society’s the investment in fixed assets. Investment projects with funds over a
hundred million Yuan reached 1,662, completing an investment of 318.817 billion Yuan,
increased by 32.2%.The newly start-working expressways are 9, and those between Changsha and
Zhuzhou, Hengyang and Shaoyang and so on are completed and open to traffic, the mileage of the
expressways reached 2,386km, increased 160km over the previous year.

     The real estate got warm again after a cold spell. All over the province, The sales area of
the commodity house is 44.73 million square meters, increased by 27.3%, 5% lower than that of
the previous year; the sales amount of the commodity house was 140.65 billion Yuan, rose49.4%,
dropped 4.6 percent that of the previous year. The investment on real estate development was
146.93 billion Yuan, increased by 35.5%.

4. Domestic trade and price


     The consumer markets have undergone rapid development. All over the
province, the total volume of retail sales on social consumption was 577.526 billion
Yuan, rose19.1%. From the perspective of different regions, the retail sales volume of the urban
area is 520.441 billion Yuan, increased by 19.4%; the retail sales volume of the rural consumption
was 57.085 billion Yuan, increased by 16.6%. From the perspective of industries, the retail sales
volume of wholesale and the retail was 503.766 billion Yuan, increased by 19.3%; the retail
volume of catering is 73.76 billion Yuan, increased by 17.9%.

The hot commodities are sold well. All over the province, among the wholesale and retail
industry surpassing the limited volume, the retail sales volume of furniture is 2.413 billion Yuan,
increased by 53.0%; the retail sales volume of the automobile is 42.317 billion Yuan, increased by
44.0%; the retail sales volume of gold, silver and jewelry is 2.449 billion Yuan, increased by
44.9%; the retail sales volume of household appliances and audio and video equipments is 11.918
billion Yuan, increased by 39.4%.


     The price level has experienced continuous rise. The consumption price has
risen up by 3.1% that of the previous year. 3.1% in the urban area and 3.2% in the rural area.

                                                8
The retail price of the commodities rose 3.1% and the price of agricultural production materials
went up by 1.4%; the factory price of industrial products rose 6.9%, the price of raw materials,
fuels and power purchase price rose 10.0%. The price of the investment in fixed assets rose 4.0%.
The production price of agricultural products rose 9.9%.

.


                         Chart 3 : The main price inflation rate in Hunan in 2010

                              Index                                     Year on year Rise (%)


Consumer Price                                                                       3.1
Among which: Urban Area                                                              3.1
                 Rural Area                                                          3.2
Among which: Food                                                                    5.4
                Cigarettes and Liquor                                                0.7
                Clothing                                                             0.7
                Household appliances and services                                    0.5
                Medical care and personal belongings                                 1.8
                Transportation and Communication                                     0.5
                Entertainment and education cultural services                        1.7
                Residence                                                            5.1
The retail price of commodities                                                      3.1
The price of agricultural production material                                        1.4
The factory price of industrial products                                             6.9
The price of Raw material, fuels and power purchase                                 10.0
The price for the investment in fixed assets                                         4.0
The price of agricultural products                                                   9.9




5. Foreign economic trade and tourism


The scale of foreign trade has enlarged. The total export-import volume of the
whole province reached $14.689 billion dollars, increased by 44.7%. The export volume is
$7.955 billion dollars, increased by 44.8%; the import volume is $6.734 dollar, rose 44.5%. From
the perspective of trade method, the export volume of general trade was $6.58 billion dollars,
increased by 38.0%; the export volume of processing trade was $1.164 billion dollars, increased
by 70.7%. Seen from the export of mechanical and electrical products and the hi-tech technology,


                                                 9
the export volume of mechanical and electrical products is $2.701 dollars, increased by 62.6%,
accounting for 34.0% of the total export volume, and the export volume of Hi-tech Technology is
$573 million dollars, increased by 93.0%, taking up 7.2% of the total export volume.




                    Chart 4: Import-Export volume and speed increase in 2010 in Hunan


                         Index                                 Absolute Number             Year on year
                                                             (Hundred Million US           increase (%)
                                                                   dollars)

 The total import-export volume                                     146.89                     44.7
   Export Volume                                                     79.55                     44.8
 Among which: General Trade                                          65.80                     38.0
                 Processing Trade                                    11.64                     70.7
 Among which: Mechanical and Electrical Products                     27.01                     62.6
               Hi-tech Technology Products                            5.73                     93.0
 Import Volume                                                       67.34                     44.5
 Among which: General Trade                                          59.55                     43.9
               Processing Trade                                       6.25                     55.6
 Among which: Mechanical and Electrical Products                     28.35                     32.2
               Hi-tech Technology                                     5.94                     38.8




New achievement has been made in foreign investment promotion. The actual utilized foreign
direct investment is $5.184 billion dollars, up by 12.8%. The industrial actual utilized foreign
direct investment is $4.25 billion dollars, increased by 20.8%. Foreign direct investment projects
with a volume of over $20 million dollars are 158, increased by 24.9%. Five enterprises of the
world top 500 Corporations are introduced within 2010, 55 in totals. The available funds within
Hunan from outside are 173.313 billion Yuan, increased by 20.1%. And the available funds for
industry are 108.963 billion Yuan, increased by 21.6%. The projects with actual available funds
more than one hundred million Yuan are 332, increased by 64.3%; the total available funds are
67.208 billion Yuan, increased by 86.0%.

    The enterprises have quickened the pace of “going out”. The value of the
newly signed contract of foreign projects, labor cooperation and Design and
Consultation is $2.115 billion dollars, increased 35.4%; the turnover was $1.618 billion dollars,

                                               10
          increased by 50.0%; the overseas labor service is 39,600, increased by 15.8%. The newly
          approved overseas investment enterprises are 124 whose actual overseas investment is $699
          million dollars. The contract implementation volume of the service outsourcing is $539 million
          dollars, increase 62.3% over the previous year; the service outsourcings enterprises are 208 and 34
          international qualifications are obtained, newly added 18.

               The tourist markets are prosperous. The received domestic tourists are
          203.9803 million person times, up by 27.0%; and the tourists from abroad are 1.8987 million
          person times, grew by 45.1%, achieving 142.58 billion Yuan total income of tourism, up by 29.7%.
          The domestic tourism revenue was 136.554 billion Yuan, rose 29.6%; the foreign exchange
          revenue was 887 million dollars, increased by 31.8%.


          6. Transportation, post and telecommunications


          The development of transportation has expedited. The turnover volume of freight
          transport is 295.841 billion ton kilometer, increased by 16.3%, 10.7 percent over the previous
          year; of which the railway is 106.812 ton kilometers, increased by 3.6%; highway is 153.936
          billion ton kilometers, increased by 22.2%, the passengers is 149.838 person kilometers, grew by
          12.7%, 9.6 percent over the previous year. Among which volume of railway passenger
          transportation is 74.046 billion person kilometers, up by 11.4%; volume of highway passenger
          transportation is 68.370 billion person kilometers, increased by 13.7%; volume of CCAC
          passenger transportation is 7.251 person kilometers, increased by 16.3%.

                 Chart 5: Main index for transportation in Hunan in 2010


            Index                           Unit               Absolute Number             Year on year increase (%)

Freight Volume                     Ten Thousand Tonnes            149836.16                           16.1
Among which: Railway               Ten Thousand Tonnes              5752.40                            6.4
              High Way             Ten Thousand Tonnes            127634.00                           14.6
             Water Transport       Ten Thousand Tonnes             15817.00                           33.7
             Civil Aviation        Ten Thousand Tonnes               6.09                             31.8
             Pipeline              Ten Thousand Tonnes              626.67                            26.7
Passenger Volume                   Ten Thousand Person            157007.65                           11.2
Among which: Railway               Ten Thousand Person              7235.60                           11.0
              High Way             Ten Thousand Person              148235                            11.2
             Water Transport       Ten Thousand Person              931.00                            24.6
             Civil Aviation        Ten Thousand Person              606.05                            10.5




                                                          11
         The ownership of Civilian Vehicles has increased rapidly. By the end of the
     year, the ownership of Civilian Vehicles was 2.4372 million, rose 36.8%. The ownership of
     private cars was 1.7957 million, increased by 29.9%. The ownership of Civilian Saloon Car was
     1.0013 million, rose 32.8%. And the ownership of private saloon car was 0.857 million, rose
     37.8%.

         Post and telecommunication has maintained a stable growth. The postal and
     telecommunication business volume was 105.209 billion Yuan, increased by 18.2%. The
     postal business volume was 3.775 billion Yuan, up by 10.6%; the telecommunication business
     volume was 101.434 billion Yuan, rose 18.5%. The total capacity of public switching system was
     12.1042 million Yuan, increased by 0.2%. The year-end users of line telephones were 10.7701
     million Yuan; the users of mobile phone were 33.4618 million Yuan, newly increased 6.1028
     million. The year-end users of broadband internet were 3.6802 million, increased by 21.4%.


     7. Finance, banking and insurance


         The fiscal revenue kept sustained and rapid growth. The total fiscal revenue
     of Hunan was 186.288 billion Yuan, 23.3% over the previous year. The local general budgeted
     revenue was 106.596 billion Yuan, rose 25.76%; 64.695 billion Yuan was ruled out for the Central
     Government’s Added Value Tax and Consumption Tax, increased by 20.01%. The income tax of
     turn in central government was 14.608 billion Yuan, increased by 20.33% and the government
     fund budget revenue was 44.48 billion Yuan, increased 77.28%.



                             Chart 6: 2010 fiscal revenue of Hunan in 2010

                          Index                              Absolute Number (Hundred        Year on year increase
                                                                   Million Yuan)                     (%)


General Budgeted Revenue                                               1065.96                          25.8
Among which: Tax Revenue                                                729.43                          28.4
               Non-tax Revenue                                          336.53                          20.5
Ruled out Central Government’s Two Taxes                                646.95                          20.0
Among which: Added Value Tax (75%)                                      343.58                          17.2

     Consumption Tax                                                    303.37                          23.4
     Ruled out Central Government Income Tax Among                      146.08                          20.3
which: Enterprise Income Tax (60%)                                       89.66                          18.2
                      Personal Income Tax (60%)                          56.42                          23.9
The budgeted revenue of Governmental funds                              444.80                          77.3




                                                    12
            The deposit and loan balance has maintained rapid growth. By the end of the
        year, the deposit balance of domestic and foreign currency in the financial institutions
        was 1664.327 billion Yuan, increased by 18.6%, 261.476 billion Yuan over that of the beginning
        of year. The enterprise deposit newly increased 69.033 billion Yuan, the savings deposit of urban
        and rural residents increased 120.793 billion Yuan. Each loan balance of domestic and foreign
        currency in financial institutions at the end of the year was 1152.167 billion Yuan, increased by
        21.0%, 200.461 billion Yuan over the beginning of the year. Short-term loan balance 354.08
        billion Yuan, newly increased 46.468 billion Yuan; the balance of middle and long term loan was
        758.555 billion Yuan, newly increased 171.701 billion Yuan.

     Chart7: Credit receipts and payments for domestic and foreign currency in the financial
                                     institutions of in Hunan in 2010
                       Index                                Year-end Number         Increase over the beginning of
                                                                                      the year(Hundred Million
                                                        (Hundred Million Yuan)                  Yuan)
Deposit Balance                                                16643.27                        2614.76
Among which: RMB Deposit Balance                               16553.78                        2602.81
Among which: Enterprise Deposit Balance                         4556.36                        690.33
               Savings Deposit Balance                          9060.04                        1207.93
               Loan Balance                                    11521.67                        2004.61
Among which: RMB Loan Balance                                  11303.76                        1933.37
Among which: Short-term Loan Balance                            3540.80                        464.68
Among which: Middle and Long Term Loan Balance                  7585.55                        1717.01

            Security market financing has made new breakthrough. The year-end
        number of listed companies was 75, among which domestic listed companies were 63,
        increased 9 and overseas listed ones were 12, increased 2 over that of the previous
        year. The security market financing for the enterprise was 64.756 billion Yuan, 2.1 times
        increased. The initial market financing was 21.623 billion Yuan, 3.5 times increased. The business
        website of the security company at the end of the year was 170, 52 over the previous year; the
        stock exchange amount was 2374.772 billion Yuan, increased by 5.6%. The number of futures
        companies was 4 with 3926.4 billion Yuan turnover, increased by 82.7%.




            The development of insurance has quickened the pace. The original insurance
        income was 43.853 billion Yuan, up by 25.9%, 14.4% over the previous year. Among which the
        original income of life insurance reached 30.570 billion Yuan, rose 23.4%; the original income of
        Health Insurance was 2.231 billion Yuan, rose 28.7%; the original income of accident insurance
        was 983 million Yuan, rose 17.3%; the original income of property insurance was 10.07 billion
        Yuan, rose 34.3%. Different compensation and payments was 8.293 billion Yuan, dropped by
        4.3%.

        8. Science, technology and education


                                                       13
                Education has achieved continuous development. By the end of the year, the
            number of common college was 102. The graduates from junior college and
            undergraduates from regular higher education were 276,100, postgraduates 13,100,
            graduates from secondary vocational education were 282,900, and from senior high school were
            361,800, from junior high school 697,500, from primary school 728,100. Children in the
            kindergarten were 1.4191 million Yuan, increased 17.5%. 3653 qualified schools for compulsory
            education were constructed, 400 were newly increased; the enrollment rate for children of school
            age was 99.92%, for children of junior high school age was 99.83%. 4.007 billion Yuan safeguard
            funds for compulsory education was practiced. 450 million Yuan national grants for high school
            and vocational school were launched and the national grants and scholarship for colleges and
            universities was 658 million Yuan, aiding students in high school and vocational school 769,000
            person times and in college and universities 432,000 person times.

 Chart 8: Students in schools of different levels ,students enrollment and graduates in Hunan in
                                                2010
                                                         The Number of Students in
                           Enrollment Number                                                   The Number Graduates
                                                                    school
                                                         Absolute
                                                          Number
                                                                                          Absolute
    Index                                                                Year on year    Number(Ten
                  Absolute Number(Ten     Year on year     (Ten                                            Year on year
                                                                                          Thousand
                    Thousand Person)      increase (%)   Thousand                                          increase (%)
                                                                         increase (%)
                                                          Person)
                                                                                           Person)



 Postgraduate              1.83           5.8              5.62               8.5       1.31               5.7
  Education

Regular Higher
  Education                       31.05         -4.4       104.72             3.0       27.61                         8.6

  Secondary
  Vocational
  Education                  30.29              -13.2      76.48             -5.4       28.29                         3.6




  Ordinary
 Senior High
   School                      37.05             3.9      101.90              -4.3      36.18                     -13.0

 Junior High                  73.44              2.0       214.92             0.3       69.75                         0.6
   School

  Ordinary

                                                          14
Primary School              86.38             3.7        479.16             2.1      72.81          2.5

   Special
  Education
                          0.22                      0   1.32                 -5.7




               The innovation capability on science and technology innovation capability
          has enforced continuously. By the end of the year, Hunan had 12 national grade and
          100 provincial grade engineering and technological research centers. Among which 2
          national grades and 19 provincial grades were newly increased. And at the end of the
          year, there were 6 national grade and 64 provincial grade key enterprise laboratories.
          Hunan undertook 188 national “863” planned projects and signed 5,137 technologic
          contracts with a deal amount of 4.009 billion Yuan; obtained 865 scientific and technological
          achievements at provincial and ministerial level or above, 47 of which are basic theory and 806
          are applied technology. Hunan won 18 national rewards for the progress of science and
          technology and, 2 rewards for national technological invention. The applications for patent were
          22,381, and 13873 of them were approved, increased 40.3% and 66.9% respectively. The
          applications for invention patent were 6,438, grew by 45.8%. The applications for enterprises,
          universities and colleges and scientific research institutes rose 45.5%, 37.7% and 8.9%
          respectively, and the approved rate increased 98.5%, 49.4% and 93.0% respectively. The added
          value of the High and New Technology was 195.108 billion Yuan, rose 36.4%, 11.7 percent faster
          than that of the previous year.

                 Comprehensive technologic service standard has improved. By the end of the
          year, the whole province had 1,265 laboratories for products testing, 29 of which were newly
          increased .And 12 national products quality supervision and inspection centers were among them,
          with 5 newly increased. 103 institutions were for legal measurement verification and 113 were for
          special equipment verification. It participated in the formulation of 20 national standards and
          organized and formulated 101 local standards. The surveying mapping department published 144
          maps in public. The ground achievements were 7,629 points, Aerial frontage photographic
          achievements were 7,213 pieces, the information and data for basic geography were 20,285. The
          services of meteorology, hydrology, and earthquakes and so on have gained further development.

          9. Culture, public health and sports


               The culture undertakings have been consolidated. 393 cultural stations were established in
          urban and rural areas. By the end of the year, the artistic performance groups reached 99, the art
          gallery for the masses and culture centers reached 140, the public libraries were 120, the museums
          and memorial halls reached 536800 times public welfare movies were showed in the countryside.

                                                          15
The broadcasting stations and TV stations reached 11and 15 respectively. Cable TV users reached
6.4046 million, rose 340,700. By the end of the year, population coverage rate for comprehensive
broadcasting was 91.99%, and the comprehensive population coverage rate of the TV station was
96.43%, increased 0.33% and 0.32% over that of the previous year. 70 were listed in the
Catalogues for protection of national grade intangible cultural heritage, and 221 were in the
catalogue of provincial protection. The published books reached 7,525 categories, and newspapers
86 categories and magazines 249 categories. The volume of the published books reached 312
million, newspapers 1.079 billion and magazines 125 million.

     The health care has maintained stable growth. The total number of health care
institutions reached 14,455. The hospitals were 770, public health care centers 2,330 and
maternal and child care service centers (stops and stations) 140, professional disease prevention
and cure centers (stops and stations) 85. The total number of berths in hospitals and in public
health centers was 208,100, rose 5.5%. The health workers reached 257,000, rose 3.6%. Certified
doctors and certified assistant doctors reached 111,000, increased 9.9%; the registered nurse
reached 95,000, increased by 14.5%.

The sports industry has made continuous progress. 1,650 projects for nationwide fitness were
held, people regularly participate in sports activities reached 19.577 million. 887 administrative
villages for farmers’ physical fitness projects were newly established. At the Guangzhou Asian
Games, Hunan won the gold medal, silver medal and copper medal 12, 5, and 2 respectively. Over
the whole year, Hunan won 14 Asian champions, 44 national champions. Besides, at Guangzhou
Asian Para Games, it won 4 gold medals and 2 silver medals. The sports fields in Hunan reached
21365, among which 160 were gymnasium, 656 were sports ground and 190 are swimming pools
and 20,359 of training house of different kinds.




10. Resources, environment protection and production safety


A balance between cultivated land protection and land use guarantee is achieved. Hunan gave
great impetus to the comprehensive improvement for rural land, carrying out 749 comprehensive
projects of land investment above provincial level with a construction scale of 327,000 hectares. It
conducted comprehensive treatment for 54,300 areas of soil erosion. The basic farmland
maintained 3.3672 million hectares. It approved 188376.55 hectares construction land, the
cultivated land used for construction reached 6758.93 hectares.

     The exploration of mineral resources and the prevention and treatment for
geological disaster have reached new achievements. Hunan finished resource
integration for 13 major minerals and 27 key mining areas. It implemented 211 o geological
exploration projects (including continuous working projects), and carried out 16 projects on
searching mine in mines in case of resource crisis and discovered 11 large and medium scale



                                                   16
orefields. The national geoparks reached 8 and the geological heritage protection zone reached 20.
It successfully avoids 106 geological disasters.

   The ecological protection has been fatherly enforced. The treatment rate of
domestic sewage in the urban areas reached 75.1% and the harmless treatment rate of
household garbage was 79.1%, increased 15.9% and 12.5% over the previous years. The air
quality in 14 cities reached secondary standard, increased 2% over the previous year; 97 monitor
fracture surfaces of the surface water met the rate of 91.8% of III type standard, increased 4.3%
over the previous year. IT approved of building up 61 national grade ecological representative
areas. Over the whole afforestation area in the barren mountains and land reached 213,400
hectares. By the end of the year, the area of closing the hills for natural afforestation reached
481,000 hectares. The coverage of forest was 57.01%, increased 0.58% over the previous year.

     Energy saving and emission reduction achieved significant progress.
According to preliminary accounting, the energy consumption of added value of the
unit scale industry dropped by 11.94% that of the previous year. The comprehensive energy
consumption volume of the 28 enterprises listed in “One thousand energy-saving enterprises”
increased 7.9%, 0.8% lower than the speed of the consumption volume of comprehensive energy
of the scaled industry; accounting for 37.1% of the energy consumption of comprehensive energy
of scaled industry. The consumption volume of comprehensive energy of “a hundred
energy-saving enterprises” (not including “a thousand energy-saving enterprises”) was 3.0%,
5.7% lower than the speed of consumption volume of comprehensive energy of the scaled industry;
taking up 15.3% of the consumption volume of comprehensive energy of the scaled industry.
Among the key energy consumption industrial enterprises with annual comprehensive energy
consumption at the standard of ten thousand tons or above, the index of energy consumption of
unit product in 73 enterprises appeared in the newspaper, 49 underwent decrease, occupying
67.1%, and chemical oxygen demand and the emission of sulfur dioxide reduced 5.82% and
1.26%.

     Production safety situation was stable. 12,061 production safety accidents of
different kinds took place, increased by 10.8%; 2,985 persons died, decreased by 6.7%. The
death toll of production safety accidents with a loss of hundred million Yuan of GDP was 0.19,
reduced by 24.0%; and the death toll in the production accidents in industrial and mining and
commercial and trading enterprises with employees more than a hundred thousand was 2.42,
dropping 19.7%; the death toll of the coal mine with output of million tones was 3.09, decreased
by 24.0%. The road traffic accidents were 8,413 during the full year, increased by 13.1%; the
million car death toll in the road traffic was 3.43, decreased by 9.7%.




    11. The livelihood and social security

    Urban and rural residents’ income has gone up steadily. The per capita
disposable income for urban and rural residents was 16,566 Yuan, increased by 9.8%;
deducting the price factor, the real increase was 6.5%. The per capita Wages Income was 9,839

                                               17
       Yuan, rose 9.6%. The per capita net income for rural residents was 5,622, increased by 14.5%;
       deducting price factor, the real increase was 10.8%. Per capita Wages Income was 2,656 Yuan,
       rose 18.9%.




                     Chart 9: Urban and rural residents income in Hunan in 2010

                            Index                                  Absolute        Year on year increase (%)
                                                                 Number(Yuan)



The per capita disposable income for urban and rural residents      16566                      9.8
Among which: Per capita Wages income                                 9839                      9.6
               Per capita net income from operations                 1881                      7.8
               Per capita transferability income                     4305                      9.2
               Per capita property income                             541                     29.1
              Per capita net income for rural residents              5622                     14.5
Among which: Per capita Wages Income                                 2656                     18.9
             Per capita net income from family-run operation         2464                      9.2
             Per capita property income                               102                     25.1
             Per capita transferability income                        401                     19.1




       People’s livelihood was further improved. The urban per capita expenditure on consumption
       was 11,825 Yuan, increased by 9.2%.The per capita expenditure on tourist and traffic
       communication increased by 42.2% and 24.9% respectively. Rural per capita expenditure on
       personal consumption was 4,310 Yuan, increased by 7.2%. Among which per capita expenditure
       on family equipments and service and clothing was 19.8% and 15.0% respectively. The Engel
       coefficient of urban and rural residents was 36.5% and 48.4% respectively. The urban per capita
       housing area was 31.2 square meters, increased by 1 square meters; The rural per capita housing
       area was 42.2 square meters, rose 0.5 square meters.




                                                       18
                     Chart 10: urban and rural residents’ expenditure in Hunan in 2010
                                        Index                                               Absolute           Year on year
                                                                                          Number(Yuan)         increase (%)
Urban per capita consumption expenditure                                                       11825                9.2
Among which: Per capita expenditure on food                                                     4322                3.5
               Per capita expenditure on clothing                                               1277                11.4
Per capita expenditure on family equipments and service consumption                              904                13.2
               Per capita expenditure traffic communication                                     1541                24.9
               Per capita expenditure on tourism                                                 312                42.2
               Rural per capita expenditure on living cost                                      4310                7.2
Among which: Per capita expenditure on food consumption                                         2088                6.1
               Per capita expenditure on clothing                                                210                15.0
         Per capita expenditure on family equipments and service consumption                     244                19.8
               Per capita expenditure on traffic communication                                   344                0.8
 Per capita expenditure on culture and education and recreational goods and services             316                8.6
               Per capita expenditure on health care                                             294                13.8


             Social security system underwent steady improvement. By the end of 2010, 9.3766
             million employees joined the urban and rural Basic Endowment Insurance, with a year
             on year increase of 585,900. Among which the insured employees were 6.7285 million, and the
             insured retired people were 2.6481 million. 18.9426 million people joined urban basic medical
             insurance, increased 623,300,among which 7.7732 million joined urban employees basic medical
             insurance and 11.1694 million joined urban residents’ basic medical insurance. 3.995 million
             joined unemployment insurance, increased 749,000. 5.1512 million employees joined employment
             injury insurance, increased 430,400. 5.2712 million employees joined birth insurance, rose
             246,900. 48.627 million joined new-type rural Cooperative medical service, the participation rate
             reached 95.3%, increased 4.1% over the previous year. 152,800 got the unemployment insurance
             at the end of the year. Different kind of adoption social welfare beds were 127,100, adopted
             106,900 people of various kinds. 9,773 different kinds of community service facilities were
             established in urban area. Among which 477 comprehensive community service centers were built
             up. The all-year sales social welfare lottery was 2.634 billion Yuan, raised 864 million Yuan social
             welfare funds, and the direct social donation reached 69 million Yuan.

                                                             19
II. A Glimpse of Key Development Zones in Hunan Province<top>


                 Changsha National High-Tech Industrial Development Zone




    Changsha National High-Tech Industrial Development Zone (CHTIDZ) was founded in Oct
1988, and approved by the State Council as one of the China's earliest national High-tech
development zones in 1991. There are now 800 high-tech enterprises set up in the zone (200
enterprises with foreign investment). In the year 2010.CHTIDZ accomplished a total income of
RMB 180 billion.Electronics & information technology, advanced manufacture technology,
bio-medical technology , new material technology, new energy and environmental protection
industry form the backbone industries in the zone. And we also established the national software
base (including digital media Industrial and animation industrial base), new material
transformation and industrialization base (including advanced battery material and battery
industrial base), advanced manufacture technology base (including sensor technology base),
Hi-tech products export base, housing industrialization demonstration base and etc. CHTIDZ has
more 30 companies with domestic or international leading position, more than 20 domestic or
international listed companies, general post-doctor working station and 14 post-doctor working
stations, several Chinese famous trademarks, such as Zoomlion,Jiuzhitang, Mengjie, Blue Cat,
Longping. The total production of industrial enterprises above designated size in the zone took up
more than 40% of the city’s total industrial production, the zone has been awarded the National
Model Zone constantly in the previous selection, and approved in 2009 became one of the first
building of national innovation-oriented science and technology park .There are 14 500 top of the
world enterprises : Hitachi , Schlumberger , Suzuki Grand , China Resources
Group,Nokia,Motorola,Cisco,Dell,Ericsson,Manpower,Iitochu,Foxconn,Honeywell and
Flowserve.




                                               20
Address: No.668, Lugu Road, Changsha, Hunan, P.R. China (410205)
Tel: +86-731-88995555
Fax: +86-731-88995617

http://www.cshtz.gov.cn

E-mail: luvalley@vip.sina.com




             Brief Introduction of Changsha National Biomedical Industrial Base


Changsha National Bio-industry Park former named Liuyang Biomedical Park, was approved the
foundation by Hunan Provincial Government in 1998. The first-stage planned area is 13.4 km2.
The park is located in the eastern of the provincial capital-Changsha area, and is 35 km away from
Changsha CBD, 25 km from Liuyang urban area, 18 km from Changsha Huanghua International
Airport, 20 km from Beijing-Zhuhai Highway, 30 km away from Wuhan-Guangzhou skytrain.
Changsha-Liuyang Highway, Daweishan-Liuyang Highway, Liuyang-Liling Highway, No.319
National Highway, Kaiyuan East Road, a freeway which linked Changsha and park are all across
the park. Changsha-Zhuzhou-Xiangtan City Expressway and Shimen-Changsha Railway will pass
by the park and will set up a station here. The park east to Yangtze River Delta, south to Pearl
River Delta, with the significant location advantage and the convenient transportation.




                                                21
Changsha National Bio-industry Park is one of the first group of National Biomedical Industrial
Bases, and was granted as “China Liuyang International Medicinal Industry Park” (Lipip) by
UNIDO in October 2001, was granted as “Practice Base for China Youth Incubation” by Chinese
Youth Communist League Center Committee in 2004, and was approved as National Biomedical
Industrial Base in 2006, being the only national biomedical industrial base in the central area.




Changsha National Bio-industry Park is aiming at the high technology, the ecological and
international development strategy, and guided by biomedical sciences, healthy food,
bio-environmental protection, bio-energy and electronic information, which is the important area


                                                 22
in Changsha-Zhuzhou-Xiangtan city cluster. Now there are 136 industry enterprises, 125
supporting research, service, business enterprises introduced into the park, is one of the most
concentrate parks with medium-sized and small enterprises in China. Among them, there are
medicine enterprises such as Jiu Zhi Tang Si Qi, Taier, Wei Er Man, Chunguang Jiuhui, Dinuo,
Jiudian, Hua Na Da, Anbang, Lv Zhi Yun Co., Ltd etc; IT enterprises such as Hong Kong Lansi
Technology, Lier electron Co.,Ltd etc; food enterprises such as Kang Shi Fu, Yan Jin Pu Zi, Ke De
Xiang food Co.,Ltd etc. Now there got 14 Hunan famous brands, 1 China famous brand.


Changsha National Bio-industry Park carrying out close management and express working and
was approved to set up a first-degree treasury by People's Bank of China, that to insure the
materialized of tax refund and preferential policies.


Through the establishment of technology public service platform to promoting scientific and
technological innovations and promote competence, the park formed a complete industrial chain
and competitive advantage. The main platforms is: Hunan Medical Science and Technology
Center (biological medicinal incubator), Hunan Experimental Animal Center (Hunan Food and
Drug Security Assessment Center).


In 2010, the output value was 17.1 billion yuan, with the financial tax 0.52 billion yuan. In the
last”the twelfth five years”, the output value will achieved 100 billion yuan, with the financial tax
4 billion yuan. Changsha National Bio-industry Park wills effort to create the world biology
economic community that makes Changsha to be biology economic center and the city of
biological industry start-ups.




 Address:9#, Kangning Road, Bio-industry Zone, Liuyang, Hunan (410329)

 Tel: 86-731-83219688            83280808

 Fax: 86-731-83280366            Web: http:// www.lipip.com

 Email: lipip.yan@gmail.com



                                                 23
                                        Brief Introduction
                   Of Zhuzhou Hi-tech Zone & Zhuzhou Tianyuan District




Locating at west bank of Zhuzhou, Zhuzhou Hi-tech Industrial Development Zone was established
in May 1992, and was approved as National Hi-tech Industrial Development Zone by the state
council in November of the same year. In 2000,Zhuzhou Hi-tech Zone and Zhuzhou Tianyuan
District has combined its function and efficiency, with a general name of Zhuzhou New Region,
with a jurisdiction over three street branch, four towns. The general area is 327.6 square km with
population of 246,000.
Since the establishment of Zhuzhou New Region, they have pursued the development idea like
“ Industrial park is life, project is the soul, to build up capable hi-tech zone and establish
harmonious Tianyuan District, and to strive for the 1st place in the city, the 1st level in the
province, and to step forward over the country ”, to execute three development strategy of hi-tech
industry as lead, opening up the strength district, developing atmosphere, with four work stress of
construction of industrial park, introduction of project, development of industry, and city
construction. They finally build up a modern scientific city in harmony, civilization, and
prosperous, which has fulfilled the goal of better and quicker economic development. In 2010,
Zhuzhou New Region has finished the GDP of 30.5 billion Yuan, and gross industrial output of 73
billion Yuan, the fiscal revenue is 2.58 billion Yuan. It has kept the growth rate of 24% annually
during the 11th five-year plan period, and to be the most active growth pole of Zhuzhou.
At present, The Hexi Hi-tech Industrial Example Park is the key area, the Tiantai Industrial Park
with 2.36 square km has completed as well as the Liyu Industrial Park with 14.17 square km. The
CBD of Liyu is in the progress of construction, the Liyu Recreation Valley has opened to use,
Xinma Industrial park with its 20 square km planning area is the new investment area. With
industrial development pushing forward city construction, the developed area of Zhuzhou New
Region has reached 33 square km.It has formed crisscross urban road network system. The main
roads have been beautified, greened and lightened. The Xiang River Scene Belt surrounds the
New Region, and Wuhan-Guangzhou Hi-speed Railway, Beijing-Zhuhai Express Way cross
it,Liyu CBD,sports center, Hunan Industrial University, Wuhan-Guangzhou Hi-speed railway
station have to be the new symbols of the city. The under-constructed Xiang Water Bay is a large
scale city public facility construction project including ecological leisure park. With the theme of


                                                24
Holy Farmer Culture, the Holy Farmer City will be built into a central city scene with statue,
pagoda, square, sun city, lake, palace, art center, and avenue as the symbolic constructions.
Up to 2010,The Hi-tech Zone has industrial enterprises for 370, within 166 hi-tech ones, which
has formed four leading industries of advanced manufactory, new material, electronic information,
bio-medicine and healthy food, and cultivated new energy equipment and energy saving and
environment production industry with wind-power and solar field as the lead. The zone has
formed an industrial frame of one zone, three parks, and multi bases.
At the moment, Zhuzhou New Region has strive for being the leading example of “Two-oriented”
society, with aims to establish state ecological industrial park, state creation scientific park,
two-oriented industry cluster area, and most fully employment and social safeguard cover area.
In the end, Zhuzhou Hi-tech Zone welcomes enterprises making investment and starting new
career here.




Address: Hi-tech Building, North No.1, Zhuzhou Avenue, Tianyuan District, Zhuzhou, Hunan
Tel: 86-731-28818549, 28833667
Fax: 86-731-28818549, 28833667
Web: www.zzgxq.gov.cn



      The Vigorous High-Tech Zone, The Featured High-Tech Zone
      ——Xiangtan Hi-tech Zone on the Rise




                                                 25
      Founded in 1992, the Xiangtan National Hi-tech Industrial Development Zone was
promoted to be a national hi-tech zone as per the approval of the State Council on March 18, 2009.
With a planned size of 46.2 square km, the Zone currently is home to 382 industrial enterprises.
      In recent years, by insisting on the development rationale of “innovative orientation,
featured growth, key support, and leaping development”, Xiangtan Hi-tech Zone has successfully
built the Germany Industrial Park, Torch Innovation and Venturing Park, Shuangma industrial park,
new energy industrial park, and other featured parks. at present various celebrated enterprises and
research organizations have chosen to headquarter within Xiangtan National Hi-tech Industrial
Development Zone, such as XEMC Windpower whose research ability ranks top in the country,
the Fortune 500 company Timken Bearing, the unique windpower lab in the country,
national-level windpower testing station, national energy windpower generation R & D
(experiment) center, and workstation for academicians and experts. As a result, the zone has
established   three   industrial   clusters   featuring   windpower     equipment     manufacturing,
electro-mechanical integration, and new materials. Today, Xiangtan National Hi-tech Industrial
Development Zone has been housing a national new energy high-tech industrial base, a national
electro-mechanical integration industrial base of national torch plan, a national transformation and
industrialization base for new materials, a national trade promotion and innovation base of science
and technology, a national intellectual property demonstrative zone, and a national
industry-university-research cooperated innovation demonstrative base.
      During the twelfth five year period, Xiangtan Hi-tech Zone will catch the opportunity of
institutional reform to further strengthen strategic cooperation by prioritizing in strategic emergent
industries to build with high standard the new energy equipment manufacturing park, the steel
products (metal) intensive processing industrial park, Torch Innovation and Venturing Park,
Germany Industrial Park, Shuangma industrial park, and other featured industrial parks, and to
perfect supporting facilities like incubator for technological corporations and modern logistics.
Shouldering the historical mission of advancing industrialization, modernization, and
internationalization for high technology Xiangtan High-tech is devoted to build a billion dollar


                                                 26
park with a brand-new perspective.
      We sincerely welcome leaders and friends from all circles to visit Xiangtan High-tech and
give us advices!
      We cordially anticipate more friends from home and abroad to join us for creating a great
business in Xiangtan High-tech Zone!




      Address:Technology Building, Hi-Tech Industrial Development Zone, Xiangtan, Hunan
      Tel: +86-731-52861257,+86-731-52861159
      Fax: +86-731-52861249,+86-731-58560284
      E-mail: xtctp@xtctp.com
      Web://www.xtctp.com


         Brief Introduction to Changde Economic-Technological Development Area


Ⅰ、Overview
Changde city is located at the central point of the bounding of the central south and the southwest
of China, in the northwestern part of Hunan Province and at the western bank of Dongting Lake,
between the provincial city of Changsha and the world famous scenic spot of Zhangjiajie, and is
traditionally called the portal to the southwest of China. It has a total area of 18.2 thousand square
kilometers with a population of 6.02 million. It has 2 districts of Wuling and Dingcheng, 6
counties of Hanshou, Taoyuan, Shimen, Linli, Lixian and Anxiang, 1 county-level city of Jinshi
and 4 administrative districts of Deshan, Liuyehu, Xidongting, and Xihu under its jurisdiction.
Changde is an important transportation junction, an energy base and an economic and cultural
center in the northwestern part of Hunan Province.



                                                 27
Changde is a key city of 3 plus 5 urban agglomeration supported by the People’s Government of
Hunan Province and CPC Hunan Committee. It is accessible to all of the large and medium-sized
cities in the central south and southwest of China within 10 hour’s drive and there are over 300
million people within the covered region (excluding the South of China) with Changde as the
center, which there are great economic development potential and market capacity. And the most
of the resources of nonferrous metal mine, water, forest, nonmetallic mine and surplus labor
services in China are concentrated here.
Changde is located at the central position of the joint between the PRD, Changjiang River Delta
(CRD), Bohai Sea Economic Zone and the great western region. Changde-Changsha Expressway,
Changde-Zhangjiajie Expressway and Changde-Jishou Expressway have been open to traffic.
Erliangaote-Guangzhou Expressway and Hangzhou-Ruili Expressway which run through the
north-south and east-west of Changde respectively are under construction. There are only 800
kilometers from Changde to Shenzhen. Shanghai, Chongqing and Beijing with convenient
waterway, railway and navigation.Changde, the first choice for industrial plan in 21st century.
Changde, named after Mr. Shan Juan’s refusal of the Emperor Rao and Shun’s abdication and
hading over of the crown to him 3000 years ago, means constantly cherishing the virtues of
Mr.Shan Juan. Late Chairman Mao Zedong’s poem of the water in Baisha Well of Changde has no
sand and the mountain in Deshan of Changde has virtue makes Deshan well-known. Since 1945,
Deshan has become the industrial base of Changde. In 1992, the provincial development
zone--Deshan Development zone was established with the planned area of 70 square kilometers.
There are now 340 enterprises with the industries of mechanical engineering, electronics, textile,
paper-making and new construction materials. The infrastructure in the industrial park is complete
and over 2000 mu of forest is preserved well. Schools, hospitals and hotels are available in the
zone. Now, Deshan has become an excellent eco-industrial park in Hunan Province, Approved by
the state council to upgrade as national development zone in June of 2010.




Ⅱ、Advantage
Location advantage: Changde, bordering Hubei Province and adjacent to Changjiang River on the


                                                28
north and Dongting Lake on the east, is located in the northwest of Hunan Province. It is about
150 kilometers away both from the provincial capital city of Changsha and the world famous
scenic spot of Zhangjiajie, and 800 kilometers away from Guangzhou, Shanghai and Chongqing.
The commercial markets here can radiate southwest, southeast and central south of China.
Humane resources: Changde annual export of labor services if over 800 thousand and over 100
thousand new laborers are registered in the labor service market every year. Changde Vocational
Polytechnic Schools and other technical schools can train 50 thousand workers on special subject
every year.
Financing advantage: The guarantee companies in Changde can offer guarantees for enterprise.
The branches of BOC, Construction Bank, ICBC, Agriculture BOC, Urban Credit Cooperative in
Deshan can offer financing consultation and convenient services.


Transportation advantage:
Road: Changde is one of the 60 transportation pivotal cities in China. There 2 national highways
and 6 expressways. Changde-Changsha Expreesway, Changde-Zhangjiajie Expressway and
Changde-Jishou Expressway have been open to traffic. Erlianhaote-Guangzhou Expressway and
Hangzhou-Ruili Expressway which run through the north-south and east-west of Changde
respectively are under construction. The interconnections for Changde-Changsha Expressway,
Changde-Zhangjiajie Expressway and Erlianhaote-Guangzhou Expressway are at Changde
Development Zone. 40-feet container can reach Guangzhou within 12 hours, and it will take 3
days from Guangzhou to Japan, and 7 days to the US.
Railway: Shimen-Changsha Railway, which connects Beijing-Guangzhou Railway and
Zhicheng-Liuzhou Railway, runs through Changde Development Zone. The largest cargo station
on Shimen-Changsha Railway is also at Deshan, and supervision warehouses are established there
by the Customs Administration and Entry-Exit Inspection and Quarantine Bureau.
Waterway: Changde Development Zone is adjacent to Yuanjiang River on the north. It is
accessible to all of important cities and docks along Changjiang River valley from Yuanjiang
River into Dongting Lake. Kiloton cargo ship could sail in this river all the year.
Airway: Changde Development Zone is 8 kilometers away from Taohuayuan airport and the
flights to Guangzhou, Shenzhen, Beijing, Haikou, Shanghai, Chongqing and Kuming are open.
The airport is being upgraded to be a 4D.




                                                  29
              Brief Introduction of Chenzhou Export Processing Area in Hunan




(I)     Overview of Parks
Founded on June 2005 authorized by the State Council, Hunan Chenzhou Export Processing Area,
officially put into operation on November 2007, is the exclusive national export processing area in
Hunan province, covering a town and mid-level vocational school with the total area of 100 km2,
including 132 enterprises, nearly 50,000 resident population, over 20,000 of them are workers in
the industrial park, which has been honored successively Top Ten Industrial Parks with Most


                                                30
Value of Investment in Hunan, Demonstration Park for Industrial Transfer in Hunan, Information
Industry Chenzhou Base in Hunan, Digital Video & Info. Industry Chenzhou Base in Hunan, New
Material Industry Chenzhou Base in Hunan and Rare and Precious Metal Processing Industrial
Base in Hunan.
(II)    Investment Advantage of Park
1. Superb Transportation in the Area
The park, located at the new area to the east of the city based upon the Chenzhou urban layout,
covers 43km2 out of overall 105km2 general city planning. It is the main course of the city
Eastward strategy as the three main paths, Chen-Zi Highway, Xiangshang Highway and Chen-Zi
Expressway, run through the whole park, which is 10-min drive from Chenzhou high-speed train
station and 5-min drive from Jingzhu highway.
2. Complete Infrastructure
The completed area in the park covers 8km2 with complete integrated infrastructure, such as water,
electricity, roads, telecommunications, electronic monitoring, fences, standard workshops and
warehouses. In 2011, the completed area will be expanded to as much as 20 km2 and 43km2 by
2015. At present, the area of finished standard workshop is 1.2 million km2, with 80km2 under
construction.
3. Sound Environment of Policy
First, the Hunan Provincial Party Committee and government have endowed Chenzhou city with
the 34 items of Prioritized Pilot Projects. The city has issued Suggestions about Facilitating Park
Construction, which presented the park authorities the functions of municipal comprehensive
management authority of economy and land reserves. Second, the policy of Free-duty within
Border in the export processing area, which equals to non-tariffs, VAT and consumption tax, water,
electricity and gas enjoy tax refund policies. Third, primary projects, under the privileged
Individual Case term, are awarded preferential policies. Fourth, the established representative
center in the park helps enterprises set up registration, report for project, environmental protection
and land procedures free of charge.
4.Abundant Human Resources
Chenzhou enjoys abundant resources of labor force, whose quality is rather high. Of all the three
million manpower, over 900,000 of them work at the Pearl River Delta area every year, providing
a number of skilled workers for local enterprises. The park, implementing the Order-oriented
recruitment service, possesses its own training base (Chenzhou Vocational & Technical School)
and real-training base (Chenzhou Vocational Education Production Training Base), providing a
strong support of intelligence for companies through setting up the cooperative relationship with
academies in Hunan province in terms of production, study and research. Currently, over 1,000
workers will be recruited for companies by park authority every month.
5. Rather Low Operational Cost
The comprehensive operating cost of the park is 30% lower than that of the Pearl River Delta,
amongst which large-scale industry electricity fee is 0.639RMB/Kwh, standard water price of
industrial water is 1.32RMB/Ton and the lowest salary level in 2010 was 725RMB/Month.
Chenzhou authority is currently building the rail-and-sea transport and the logistical cost will be
reduced by 20% from Chenzhou to the Pearl River Delta after the operation of the transport.
6. Accelerated Aggregation of Industries

                                                 31
Some 132 enterprises have been introduced into the park, primarily helped create the four major
dominating industries, including electronic information, advanced manufacturing, business
logistics and nonferrous metal materials. The companies of electronic information were all the
costal transferred firms, highlighting the key points in the industrial transfer in the park, which
were represented by Delta Group, Hualu Digital Technology Company, HuaLei Optoelectronic
Corporation, Junfeng Microelectronics Co., Hunan Shizhuyuan Non-ferrous Metal Limited
Liability Corporation, Chenzhou Diamond Tungsten Products Co., Ltd and Jinghui Silver Industry
Co., Ltd.
(III)    Park Developing Prospect
By the end of the 12th Five-year Plan as schedule, the completed area in the park is 43km2 and
would realize the industrial output value of gross products is 1000 billion RMB, which are
dedicated to establishing the top industrial areas in China, the most competitive national
development zones with international competitiveness, featuring obvious products’ characteristics,
superb infrastructure, standard service management and refined ecological environment.




III. Investment Environment<top>

1. Transportation
Seven trunk railway lines, namely, Beijing-Guangzhou, Hunan-Guizhou, Hunan-Guangxi,
Luoyang-Zhanjiang, Shimen – Changsha, Jiaozuo-Liuzhou and Zhejiang-jiangxi, run in all
directions linking all parts of China, Hunan section of Chongqing-Huaihua Railway line will be
completed and put into operation within the year. The length of operating railway line totalled
2,799 km, and listed 9th in China. Seven national highways including No. 106, 107, 319, 320
extend to every part of the province with a total length of 175,415 km. Such high-grade highways
have been completed, as Hunan section of Beijing-Zhuhai and HuKun Expressway,
Changsha-Yiyang-Changde etc. 18 highways include Yueyang to Xiangtan and Hengyang to
Linwu etc, which of Jingzhu double track are still under construction. Changji Highway have been
opened.Changsha, the capital city of Hunan have already implemented the highway links of other
13 cities. The total length of Highway is 2001 km. Six rail project include Added Xianggui double
track opened.The unobstructed progress of Changsha and Zhangjiajie airport expansion. And first
phrase project of Yueyang Chenglinji Port(Songyang Lake), the transport construction project of

                                                32
Chagde to Nianyukou and the bridge unobstructed project of Tongting Lake are all under express
constrction. In Changsha Huanghua Airport and Zhangjiajie Airport, the direct airline is available
to Korea and Hongkong. Changde and Yongzhou Airport have been put into operation. The total
length of Hunan’ Fairway is 11,398 km. The province owns two 5,000-tonnage capacity berths at
Chenglingji of Yueyang Waimao terminal.

2. Electric Power
Hunan’s power supply trunk network construction and urban and rural power network upgrading
have obtained sound results. By the end of 2010, Hunan's installed generating capacity is 29.12
MKW, with power generating capacity of 109.99 BKW in 2010.
3. Telecommunications
Hunan's communications capacity has doubled and redoubled year by year. Fiber-optical, short
wave and microwave communications have formed a telecommunications network linking all
parts of the world. By the end of 2010, the users of fixed telephone and mobile phone reached
10.7701million and 33.4618 respectively, increased by 6.1028 million. By the end of 2010, the
users of Internet BroadBand reached 3.6802 million, rose 21.4%. Every 100 people own 16.91
sets fixed telephones and 28.7269 sets mobile phones. Hunan has built seven modern
telecommunications networks, i.e. Hunan Information Port and Internet, long distance digital
transmission network, SPC telephone network, mobile telephone network, conference television &
telephone network, numeric data network and speech sound information service network.
International and domestic direct dialing telephone service is available in all of Hunan's cities and
counties.


4. Urban Construction
Hunan Province had 29 cities, 72 counties and 984 other organic towns, and the urbanization rate
was 44.4%, forming the basic framework of urban system. The popularization rate of water above
county grade was 92% and of natural gas was 78%, the per capita road area was 12.5 square
meters and the sewage treatment rate was 72%, the harmless treatment rate for domestic garbage
was 50.66%, the greening rate in built up area was 28.3%, all technical indexes was of medium
level, all have large construction space for investment. The planned construction management
over the whole province has basically achieved “open up administrative procedures, window
construction and follow-up service during the whole course.


5. Investment Cost

1). Cultivated Land Expense

a.   Category 1 District: Paddy field RMB 24,000/mu (RMB 18/sq.m.)

                            Dry field RMB16, 000/mu (RMB 12/sq.m.)

b. Category 2 District: Paddy field RMB 22,000/mu (RMB 16.5/sq.m.)

                            Dry field RMB 14,000/mu (RMB 10.5/sq.m.)



                                                 33
c.   Category 3 District: Paddy field RMB 20,000/mu (RMB 15/sq.m.)

                           Dry field RMB 12,000/mu (RMB 9/sq.m.)

d. Category 4 District: Paddy field RMB 16,000/mu (RMB 12/sq.m.)

                           Dry field RMB 10,000/mu (RMB 7.5/sq.m.)

For the construction project using the basic farming land, it shall be levied with 1.2 times of fees
collected as the paddy field area in the same category of district.

District classification:

The first-rate regions are : Furong district, Kaifu district, Tianxin district, Yuhua
district, Yuelu district in Changsha City; Shigu district, Yanfeng district, Zhengxiang
district, Zhuhui district in Hengyang City; Yuetang district, Yuhu district in Xiang
Tan City; Hetang distric, Lusong district, Shifeng district, Tianyuan district in
Zhuzhou City; Yueyang Tower district in Yueyang City.
The second-rate regions are: Dingcheng district, Wulin district in Changde City;
Beihu district, Suxian district in Chenzhou City; Louxing district in Loudi City; Beita
district, Daxiang district, Shuangqing district in Shaoyang City; Heshan district,
Ziyang district in Yiyang City; Lengshuitan district, Lingling district in Yongzhou
City; Yunxi district, Junshan district in Yueyang City; Nanyue district in Hengyang
City; Changsha County; Hecheng district in Huaihua City; Liuyang City; Yongding
district in Zhang Jiajie.

The third-rate regions are: Jishou City, Leiyang City, Liling City, Linxiang City,
Miluo City, Xiangxiang City, Yuanjiang City, Wulingyuan district in Zhang Jiajie,
Anren County, Anxiang County, Changning City, Dao County, Guiyang County,
Hanshou County, Hengdong County, Hengnan County, Hengshan County, Hengyang
County, Huarong County, Jinshi City, Lengshuijiang City, Li County, Lianyuan
County, Linli County, Linwu County, Nan County, Ningxiang County, Qidong
County, Qiyang County, Shaoshan City, Shaodong County, Shaoyang County,
Shimen County, Shuangfeng County, Taojiang County, Taoyuang County,
Wangcheng County, Wugang City, Xiangtang County, Xiangyin County, Xinshao
County, You County, Yueyang County, Zhuzhou County and Zixing City

      The fourth-rate regions are: Anhua County, Chaling County, Chenxi County, Cili
County, Dong’an County, Dongkou County, Hongjiang City, Datong Lake district in
Yiyang City, Huidong County, Jiahe County, Jingzhou County, Lanshan County,
Longhui County, Mayang County, Ningyuan County, Pingjiang County, Suining
County, Xinhua County, Xintian County, Xupu County, Yanling County, Yizhang
County, Yongxing County, Zhijiang County, Zhongfang County, Baojing County,
Chengbu County, Fenghuang County, Guzhang County, Guidong County, Huaheng
County, Jianghua County, Jiangyong County, Longshan County, Lucheng County,
Sangzhi County, Shuangpai County, Tongdao County, Xinhuang County, Yongshun


                                                34
County and Yuanling County.


2). Newly-added Construction Land Use Fee

Expropriation standard:

Category      1     2     3     4    5    6    7      8       9    10    11     12     13   14     15
Standard      140   120   100   80   64   56   48     42      34   28    24     20     16   14     10

Expropriation category:

Category 4:

Changsha City (Furong District       Kaifu District       Tianxin District    Yuhua District     Yuelu
District)

Category 6:

Heyang City (Shigu District Yanfeng District Zhengxiang District Zhuhui district) Xiangtan
City (Yuetang district Yuhu District) Zhuzhou City (Hetang District Mangsong District
Shifeng District TianYuan District)

Category 7:

Yueyang City Yueyang Pavilion District

Category 8:

Changde City (Dingcheng District Wuling District) Chengzhou City (Beihu district Suxian
District)

Category 9:

Loudi City Louxing District Shaoyang City (Beita District Daxiang District Shuangqing
District) Yiyang City (Heshan District Ziyang District) Yongzhou City (Lengshuitan District
Lingling District) Yueyang City Yunxi District Hengyang City Nanyue District

Category 10:

Changsha County Huahua City Hecheng District Liuyang City Zhangjiajie City Yongding
Dsitrict Yueyang City Junshan District

Category 11:

JIshou City Laiyang City Liling City Linxiang City                 Miluo City        Xiangxiang City
Yuanjiang City Zhangjiajie City WulingYuan District

Category 12:

Anren County   Anxiang County     Changning City    Dao County Guiyang County
Hanshou County Hengdong County     Hengnan County     Hengshan County Hengyang
county  Huarong County Jinshi City Lengshuijiang City   Li County LianYuan City

                                               35
Linli County Linwu County        Nan County Ningxiang County    Qidong County Qiyang
County Shaoshan City            Shaodong County     Shimen County     Shuangfeng County
Tiaojiang County TiaoYuan       County Wangcheng County Wugang City        Xiangtan City
Xiangyin County   Xinshao       County   You County    Yueyang County    Zhuzhou County
Zixing City

Category 13:

Anhua County     Chaling County    Chenxi County     Cili County   Dong’an County
Dongkou County Hongjiang City Huitong County Jiahe County Jinzhou Miao and
Dong Minority autonomy County    Lanshan County     Longhui County   Mayang Miao
Minority Autonomy County     NingYuan County     Pingjiang County   Suining County
Xinhua County     Xinning County    Xintian County Xupu County      Yanling County
YIzhang County Yongxing County Zhijiang Tong Minority Autonomy County Zhongfang
County Datonghu Region in Yiyang City

Category 14:

Baojing County      Chengbu Miao Minority Autonomy County    Fenghuang County
Guzhang County Guidong County HuaYuan County Jianghua Yao Minority Autonomy
County    Jiangyong County Longshan County  LUxi County Rucheng County Sangzhi
County Shuangpai County Tongdao Tong Minority Autonomy County Xinhuang Tong
Minority Autonomy County Yongshun County Yuanling County

3). Land Price

Based on the local normal land price, the unit price in different towns may be calculated out,
referring to such coefficients as the land grade, the land use year and the cultivated percentage.
The price of lands for industry and business is determined by means of bid and auction. The land
price for industrial use shall not lower than the lowest standard promulgated by the State Ministry
of Land and Resources.

4). State Land Source Administration Fee
(1) Administrative Fee for Land Use and Requisition:

For the use of land involving in full contract (for work, fee and time) with requisition for
lump-sum cultivated land over 66.67 ha (1000 Chinese mu) and non-cultivated land over 133,34
ha (2000 Chinese mu), the administrative fee levied shall be 3% of the total land compensation
paid for the land requisition. For the cultivated land in lump-sum requisition less than 66.67 ha.
And non-cultivated land less than 133,34ha, the administrative fee levied shall be 4% of the total
land compensation paid for the land requisition.

In case of the land requisition in semi-contract with lump sum requisition for cultivated land over
66,67 ha (1000 Chinese mu) and non-cultivated land over 133,34 ha (2000 Chinese mu), the
administrative fee levied shall be 2% of the total land compensation payment. For the cultivated
land requisition less than 66.67ha. and the non-cultivated land less than 133.34 ha. the
administrative fee shall be 2.5 % of the total royalty.

In case of cultivated land requisition in single contract over 66.67 ha. and non-cultivated land over
133,34 ha, the fee levied shall be 1.5% of the total royalty. For the cultivated land requisition less
than 66.67 ha. and non-cultivated land less than 133.34 ha., the fee levied shall be 2% of the total
land compensation payment.

The use of land for project construction with the land requisition formalities to be supplemented,
which is not necessary to handle the affairs compensation and resettlement but necessary to be


                                                 36
re-surveyed and registered, the fee levied shall be RMB 100 Yuan per Chinese mu, including the
project land by utilizing state-owned wasteland and waste mountain allocated free of charge.

(2) Prospecting and mining license:

Geological survey project license: RMB 50 for one

Survey license change and replace: RMB 50 for one

(3) Registration cost for mining:

Large scaled mine: RMB 500/ one mine;

Medium sized mine: RMB 300/ one mine

Small sized mine: RMB 200/ one mine;

5). Labor Costs and other Charges
Ordinary management personnel: USD 2,000 for one person per year

Ordinary workers: USD 1000 for one person per year

Other cost of ordinary workers: USD 50 for one person per year

6). Electricity Charges
(1) Domestic lighting RMB0.588 Yuan/kWh (less than 1kv standard electricity price)
(2) Non- resident lighting electricity price Electricity price standard for Voltage Grade of 1-10KV
was RMB 0.925Yuan per KWH, and the Voltage Grade below 35-110KV was RMB0.909 Yuan
per KWH.
(3) Commercial Electricity Charges RMB1.01 Yuan/kWh(1-10kv standard electricity price)
(4) Electricity charges of non-industry and normal industry RMB0.757 Yuan/kWh (1-10kv
standard electricity price)
(5) Electricity charges of bulk industrial use RMB 0.610 Yuan/kWh for below35-110KV,RMB
0.582 for 110KV standard electricity price; RMB 0.558Yuan/kwh for 220kv or above standard
electricity price.

The basic power charge RMB 20 Yuan/KVA/month (calculated based on transformation capacity);
RMB 30 Yuan/Kw/month (calculated based on max. transformation capacity). In addition, the
actual power price for power consumption during the wet season or valley period may be lower
than above mentioned power price.
(6) The bulk industrial users may directly sign power purchase contract with the generating
enterprises with the price negotiated.

7). Charges for Water
Water for industrial use RMB3.74 Yuan/ton (about USD0.545/t) including RMB1.27 Yuan/t
expense for sewage discharging, garbage disposal and water resource

Water for domestic use RMB2.58Yuan/ton (about USD0.287/t) including RMB 0.97 Yuan/t
expense for sewage discharging, garbage disposal and water resource

8). Charges of Transportation

(1)Railway



                                                37
Shanghai-Changsha1193km
Full carload for No.6 cargo a wagon (60t) RMB8277 Yuan, RMB 138 Yuan/ ton;
Less than carload No.21 RMB 11.05 Yuan/100kg

(2)Highway

Changsha-Shanghai1350km
Full carload RMB600-800 Yuan/ton;
Less than carload RMB 880Yuan/ton

(3)Waterway

Changsha-Shanghai RMB 900 Yuan per container; RMB 30-40 Yuan per ton for bulk cargo.

9). Quarantine & Inspection Fee
The fee collection standard shall be in accordance with the “Circular Concerning Measures and
Standards of Fee Collection for Inspection & Quarantine of Import & Export Commodities
promulgated by the State Development and Reform Commission and the Ministry of Finance”.


6. Measures of Hunan Province to Optimize Soft Climate for Economic Development

In the recent years, under the leadership of the Provincial Party Committee and Provincial

Government, Hunan focuses on the work target of “improving efficiency of governmental

institutions, building first-rate development climate”, continuously strengthening the work power.

The satisfactory degree of enterprises and investors to Hunan’s economic development climate has

been continuously raised by taking the following measures:

Deregulation of administrative examination and approval. It enlarged the county’s (city)

economic and social administration authority, boosted the reform of financial system

in the counties under direct administration of provincial government, and enhanced

County Government’s overall coordination for the regional social economic

development and the capacity of self-determination and public services to promote the

rapid growth of county economy. It simplified examination and approval items.

Currently, the provincial-level government retained 312 administrative permissive

items, 70 non-permissive examination and approval items, 382 in total, ranking the

fewest among the five provinces in Central China, and the administrative permissive

items was relatively few among the five provinces in Central China.

 Standardization of the administrative procedures. In 2008, Hunan issued

nationwide first local administrative procedural provision, namely, Administrative

                                               38
procedural provision in Hunan, provided guarantee for Hunan’s optimization of

economic growth from the legal level, effectively promoting the norm of

administrative act.

Standardization of the discretion for administrative punishment.                            In 2009,

Hunan People’s Government issued the Measures on Standardization of the

Administrative Discretion in Hunan. Departments of all levels, in accordance with the

requirements, formulated and implemented the standard for the discretion of

administrative punishment.
Promotion of sunshine government. It implemented overall information opening
up, and 14 cities and states and 112 counties set up administrative service centers or
agency centers for government affairs, focusing on managing examination and
approval items, providing one-stop service for enterprises and investors. It advanced
e-government affairs and electron monitoring such as on line examination and
approval. Some counties and provincial units has established real time electron
monitoring, and the time for management of examination and approval affairs was
one third less than legal time. The united three-level (province-city-county) linkage
e-government affairs and monitoring system will be completed in 2011.
To optimize administrative service. The streamlining agency system is implemented for
examination and approval of invested projects as “One project invested in Hunan, One department
responsible for, One official for handling, One organized group to trace”. The administrative
service centers at all levels are carrying out Green-passage System for key industrial projects.
Standardization of enterprises related inspections. It formulated and issued
Several stipulations on standardization of enterprises related inspection in Hunan ,
and implemented enterprise “quiet day” system, stipulated that any department and
unit are not allowed to enter the enterprise for inspection with 1-20 days except the
inspections related to national security, public security, personal health, life and
property security, environmental protection and ecological security; the inspection on
the same affair conducted by same department and unit could not be more than once;
One must report to optimization of the same level before entering the enterprise for
inspection.
To implement enterprise monitoring and evaluating system. Since 2004, Hunan Provincial
Office of Optimizing Economic Development Climate has initially built Enterprise Evaluating
Administration Departments System in China. The legal persons or directors of the enterprises are
employed as the supervisors. Collect enterprise opinions every year and regularly organize the
environmental assessment. The monitoring and evaluating results are used as the basis to examine
the departments’ achievement and efficiency.
Setting up the quick response mechanism offering troubleshoot for enterprises. The
optimizing offices at all levels visit enterprises in batches and investigate their difficulties for the
purpose of coordinating the relations between enterprises and government and resolving problems.
Help enterprises solve all kinds of difficulties and problems forwardly.

                                                  39
To establish complaint handle mechanism. The Administrative Efficacy Complaint Centers of
local governments at all levels have been established. The complaint hotline “12342” for
administrative efficacy and optimizing economic development environment is in 24-hour running
in the whole province, which offers effective and timely service for enterprise complains.

IV. Industries Guided for Investment<top>

I. Industries Encouraged to Foreign Investment
1. New tech for farming, agriculture comprehensive development, energy, transportation and key
raw materials industries;
2.Hi-tech, advanced applicable tech, new equipment and new materials that can upgrade the
product performance, improve the enterprises’ economic efficiency or fill the domestic shortage;
3.The products can fit for the market demand, upgrade the quality level, enter the newly developed
market or have the competitive ability in the world market;
4.New tech and new equipment can save energy and raw material, comprehensively utilize the
resources and renewable resources, and prevent and treat the environment pollution;
5.The industries can fully develop the superiorities of Hunan’s human resources and natural
resources and accord with the state industry policies;
6.Other cases prescribed by the laws and administrative regulations.

II. Catalogue for the Guidance of Foreign Investment Industries (Amended in 2007)
                    Catalogue of Encouraged Foreign Investment Industries
I. Farming, Forestry, Animal Husbandry and Fishery Industries
(1) Improvement of low and medium yielding field
(2) Planting, development and production of woody edible oil, ingredient and industrial raw
material
(3) Planting technology, without social effects of pollution, of vegetables (including edible fungus
and melon-watermelon), dried fruits, teas and serial development and production of these products
(4) Development and production of new technology of sugar-yielding crops, fruit trees, forage
grass
(5) Production of flowers and plants, and construction and operation of nursery base
(6) Planting of rubber, sisals and coffees
(7) Cultivation of traditional Chinese medicines (limited to equity joint ventures or contractual
joint ventures)
(8) Reusing in fields and comprehensive utilization of straws and stalks of crop, development and
production of resources of organic fertilizers
(9) Planting of forest trees (including bamboo) and cultivation of fine strains of forest trees and
cultivation of new breed varieties of polyploid trees and genetically engineered forest trees
(10) Breeding of aquatic offspring (excluding precious quality varieties peculiar to China)
(11) Construction and operation of ecological environment protection projects preventing and
treating desertification and soil erosion such as planting trees and grasses, etc.
(12) Breeding of aquatic products, cage culture in deep water, large-scale breeding of aquatic
products and breeding of eco-ocean products
II. Mining and Quarrying Industries
(1) Prospecting, exploitation and utilization of coal-bed gas (limited to equity joint ventures or
contractual joint ventures)

                                                  40
(2) Venture prospecting and exploitation of petroleum, natural gas(limited to equity joint ventures
or contractual joint ventures)
(3) Exploitation of oil and gas deposits (fields) with low osmosis (limited to equity joint ventures
or contractual joint ventures)
(4) Development and application of new technologies that can increase the recovery factor of
crude oil (limited to equity joint ventures or contractual joint ventures)
(5) Development and application of new technologies for prospecting and exploitation of
petroleum, such as geophysical prospecting, well drilling, well-logging and downhole operation,
etc. (limited to contractual joint ventures)
(6) Prospecting and exploitation of such conventional oil resources as oil shale, oil sand, heavy oil
and super heavy oil (limited to contractual joint ventures)
(7) Prospecting, exploitation, and beneficiation of iron ores and manganese ores
(8) Development and application of new technologies for improving the utilance of tailings and
the comprehensive utilization of recovery technology of the mine ecology
(9) Prospecting and exploitation of submarine flammable ice (limited to contractual joint ventures)
III. Manufacturing Industries
1. Farm Products Processing Industry
(1) Development and production of biology feeds, straws and stalks feeds and aquatic feeds
(2) Aquatic products processing, seashell products cleansing and processing, and development of
function food made from seaweed
(3) Storage and processing of vegetables, dried fruits, fowl and livestock products
2. Food Manufacturing Industry
(1) Development and production of food for babies and agedness, as well as function food
(2) Development, production and processing of forest food
(3) Production of natural addictive for foodstuff and food ingredients (limited to equity joint
ventures or contractual joint ventures)
3. Drinks Manufacturing Industry
(1) Development and production of drinks of fruits, vegetables, albumen, tea, coffee and
vegetables
4. Tobacco Processing Industry
(1) Production of secondary cellulose acetate and processing of tows (limited to equity joint
ventures or contractual joint ventures)
(2) Production of tobacco slices in the way of paper making (limited to equity joint ventures or
contractual joint ventures)
(3) Production of filter rods (limited to equity joint ventures or contractual joint ventures)
5. Textile Industry
(1) Production of special textiles for industrial use with high and new technology
(2) Weaving and dyeing as well as post dressing of high-grade loomage face fabric
(3) Processing of special natural fiber products satisfying the requirement of comprehensive
utilization of ecology and resources and environment protection (including other animal fiber,
fibrilia, bamboo fiber, mulberry silk and colored cotton other than wool)


                                                  41
(4) Production of clothes with computer integrated manufacturing system
(5) Production of top-grade carpet, embroider and drawnwork product
6. Leather, Coat and Feather (Down and Feather) Products Industry
(1) Cleaning processing of leather and fur
(2) Post ornament and processing of leather with new technology
(3) Top-grade leather (sofa leather and car cushion leather)
7. Lumber Processing Industry and Wood, Bamboo, Bine, Palm, Grass Products Industry
(1) Development and production of new technology and products for the comprehensive
utilization of "sub-quality, small wood and fuel wood" and bamboo in the forest area
8. Paper Making and Paper Products Industry
(1) Project based on the mode of integration of forest and paper with an annual production
capacity of over 300 thousand tons of chemical wood pulp or an annual production capacity of
over 100 thousand tons of chemical mechanical wood pulp (limited to equity joint ventures or
contractual joint ventures)
9. Petroleum Refining and Coking Industry
(1) Deep processing of needle coke and coal tar
10. Chemical Raw Material and Products Manufacturing Industry
(1) Production of ethylene with an annual production capacity of 800 thousand tons or over (The
Chinese party shall hold relative majority of shares)
(2) Processing and manufacturing of derivatives of downstream products of ethylene and
comprehensive utilization of ethylene side-products such as C4-C9
(3) Production of ethylene with an annual production capacity of 200,000 tons or over Polyvinyl
chloride resin (in the way of ethylene)
(4) Production of further processed products of sodium-process bleaching powder, polyvinyl
chloride and organsilicon
(5) Production of basic organic chemical industrial raw materials such as the benzene,
methylbenzene, dimethylbenzene, etc. and its derivatives
(6) Production of supporting raw materials for synthesized materials: bisphenol-A production and
production of propylene oxide in the way of oxidizing propylene with hydrogen peroxide)
(7) Production of synthetic fibre raw materials: precision terephthalic acid, vinyl cyanide,
caprolactam, nylon 66 salt and polyurethane elastic fiber
(8) Production of synthetic rubber: liquid butadiene styrene rubber by butadiene method(excluding
styrene-butadiene rubber), butyl rubber, isoamyl rubber, polyurethane rubber, acrylic rubber,
chlorophydrin rubber, ethylene-propylene-rubber, fluororubber, silicon rubber and other special
rubber production)
(9) Production of engineering plastics and plastic alloys: PPO, engineering plastic nylon of 11 and
12, polyurethane, polysulfone, PAR, liquid crystal polymer and other products
(10) Fine chemistry industry: new products and technology for catalytic agent, auxiliary and
addictive; processing technology for the commercialization of dye (pigment); production of
high-tech chemicals for electronics and paper-making, food additives, feed additives, leather
chemical products (excluding N,N-dimethylformamide), oil-well auxiliaries, surface active agent,


                                                  42
water treatment agent, adhesivcs, inorganic fibre, inorganic nano material production and deep
processing of pigment encapsulation.
(11) Production of low hysteresis and high abrasion carbon black
(12) Production of environment-friendly printing ink and environment-friendly arene-oil
(13) Production of nature spices, synthetic spices and single ion spices
(14) Production of high capability coatings, water automotive coatings and assorted water resin
(15) Production of chlorofluorocarbon substitution
(16) Production of organic fluorine chemical products (excluding CFC/HCFC and
tetrafluoroethylene)
(17) Production of fluorine recycling from phosphorus chemicals and aluminum smelting
(18) Production of mass coal chemical industrial products (The Chinese party shall hold the
majority of shares)
(19) Development and production of new technology and products for the forestry chemicals
(20) Production of ion film for caustic soda, abio-filtration membrane and function membrane
(21) Development and production of inorganic, organic and biologic films for environment
protection
(22) Development and production of new-type fertilizer: biologic fertilizer, high-density fertilizer,
compound fertilizer, controlled release fertilizer, compound microbial inoculant, Compound
microbial manure, degradation agent for stalks and garbage and microbial preparation of special
functions
(23) Development and production of new varieties of effective, safe agriculture chemicals and
pesticides
(24) Development and production of biopesticide and bio-control products: microbial insecticide,
microbial fungicide, agricultural antibiotic, insect pheromone, enemy insect and microbial
herbicide
(25) Comprehensive utilization and disposal of exhaust gas, discharge liquid, waste residue
(26) Production of organic polymer material: organic silicone modified coatings for ship shell,
covering film for plane, rare earth cerium sulphide red dye, lead-free in electronic packages,
serials of special sizing agent by photoetching for color Plasma Display Panel, small diameter and
large specific surface area superfine fibre, high precision fuel filter paper, Li-ion battery
membrane, multi-function compound accessory ingredient for plastic processing, citric acid
diglyceride, fludioxonil, cyazofamid
11. Medical and Pharmaceutical Products Industry
(1) Production of new type compound medication of active composition medication (including
bulk drug and preparation)
(2) Production of amino acids: serine, tryptophan, hstidine, methionine for feed
(3) Production of new anti cancer medication, new cardio-cerebrovascular medication and new
nervous system using medication
(4) New type, high effective and economical contraception medication and instrument
(5) Production of new type medication using bioengineering technology



                                                 43
(6) Production of high physillogical active medication heterocyclic fluoride containing fluorine,
like heterocyclic fluoride, and intermediate
(7) Production of genetic engineering bacterin (AIDS bacterin, third bacterin, contraception
bacterin)
(8) Production of biology bacterin
(9) Production of bcg vaccine and poliomyelitis vaccine
(10) Exploitation and production of marine drug
(11) Drug preparation: production of new formulation using new technologies of sustained-release,
release, targeting and percutaneous absorption
(12) Exploitation and production of new type of pharmaceutic adjuavant
(13) Production of biomedicine material and ware (except flesh body, sample, human organ tissue
and sample processing)
(14) Production of animal using antibacterial raw material drug
(15) Exploitation and production of animal using antibacterial drug, insect repellent, pesticide,
anticoccidial drug and new formulation
(16) Production of new diagnosis reagent
12. Manufacturing Industry of Chemical Fiber
(1) Production of hi-tech chemical fiber of differential chemical fiber, aramid, carbon fiber,
polyethylene of high-strength and high-mode, polyphenylene sulfide (PPS) and so on
(2) Production of Environmental Protection chemical fiber of New Solvent cellulose fiber
(3) Production of new style of fiber and non-fiber polyester: PTT, PEN, PBT
(4) Production of new style fiber material made use of renewable resources, biomass technology:
PLA, PDO
(5) Production of polyamide, single line production capacity of 100 ton a day
(6) Production of meridian tyre aramid fiber and tyre cord
13. Industry of Plastic Products
(1) Exploitation and production of new technology and new production of agricultural film
(photodegradable film and multi-function film)
(2) Digestion and recycle of waste plastics
(3) Exploitation and production of new technology and new production of plastic soft package
(high barrier, multi-function film and material)
14. Non-metal Mineral Products Processing Industry
(1) Develop and produce new energy-saving, environment-protecting architecture material:
lightweight high-intensity and multi-function materials for wall, high-level environment protecting
decorating and finishing materials, high quality water-proof and airproof materials, and effective
thermal insulation materials.
(2) Use plastic to replace steel and wood, energy-saving and high-efficient chemical architecture
material production.
(3) Product more than 10,000,000 sq.m. elastomer, plastic changeable asphaltum waterproof
coiled materials,high-quality width (more than 2 meters) EPDM waterproof coiled materials and
matched materials, durable PVC coiled material, TPO waterproof coiled materials.

                                                   44
(4) Production of screen electromagnetic wave glass, micro-electronics glass base plate,
penetrating infrared nonlead glass, electron grade large spec quartz glass pervasion pipe,
exceeding two generation and three generation microchannel plate, optic fiber panel and inverse
image implement and glass fiber.
(5) Production of glass fibre (product line with technology of wire drawing in tank furnace) and
glass fibre reinforced plastic products with an annual capacity of 50,000 tons or more.
(6) Production of sequential fiberglass original silk felt, fiberglass surface felt, micro-electronics
fiberglass cloth and thin felt.
(7) Production of coherent fiber bundle and laser medical optic fiber.
(8) Production of sanitation porcelain with an annual production of 1,000,000 pieces or over
(9) Standardization refine of ceramic material and production of high-level decorative materials
used for ceramics.
(10) Production of high-level refractory material used in furnaces for cement kiln, top
grade(electronic)glasses, ceramics and glass fiber.
(11) Production of ceramic carrier, AIN ceramic base piece, multiple-hole ceramics use in car
catalyzing equipment.
(12) Production of inorganic, non-metal materials and products: artificial crystal, carbon/carbon
complex materials, special kind of ceramics, special kind of airproof materials, quick oil sealed
materials, special kinds of cementation materials, special type latex materials, water rubber
materials, heat-transfer coefficient is or less than 0.025W/mK under normal temperature heat
insulation materials and so on.
(13) Production of high tech compound materials: sequential fiber increasing thermoplasticity
compound materials and prepreg, endure heat > 300℃ colophony compound material moulding
craftwork assistant materials, colophony compound material oar, colophony compound material
top grade sports articles, special capability glass steel tube (pressure > 1.2MPa), special function
compound materials and products, deep water and diving compound material products,medical
and healing use compound material products, carbon/carbon compound materials and brake piece,
high capability ceramic compound materials and products, metal compound materials and
products, metal layer compound materials and products, pressure≥320MPa super-high-pressure
compound rubber pipes, air bus aviation tyres.
(14) Production of precise high capability ceramics and functional ceramic materials:
carborundum super-minute powder (purity > 99%, average granule diameter < 1μm), Si3N4
super-minute powder(purity > 99%, average granule diameter < 1μm), high pure and super-minute
alumina powder(purity > 99%, average granule diameter < 0.5μm), low temperature sintered
zirconia powder(sintered temperature < 1350℃) ,high pure AlN powder(purity > 99%, average
granule diameter < 1μm), rutile TiO2 powder(purity > 98.5%), white char black(average granule
diameter < 100nm=, barium titanate (purity > 99%, average granule diameter < 1μm=.
(15) Production of diamond film tools, thickness is 0.3mm or less super-thin artificial diamond
saw piece.
(16) Deep processing of non-metal mineral products (super-thin comminution, high level pure,
fine production, modification)

                                                 45
(17) Production of super high power black lead electrode.
(18) Production of pearlite mica (granule diameter: 3-150μm).
(19) Production of multiple dimension and multiple direction integer weaving fabric and profile
modeling fabric.
(20) Use new dry cement kiln to innocuously dispose combusting industry castoff and life garbage.
15. Non-Ferrous Metallurgical Smelting and Rolling Processing Industry
(1) Production of diameter > 200mm silicon single crystal and polishing piece, multiple crystal
silicon.
(2) Production of high tech non-ferrous metallurgical materials: new type high capability
hydrogen storing materials, lithium hydronium battery electrode materials, compound
semiconductor materials (gallium arsenide, gallium phoshpide, gallium Reexplanation, gallium
nitride), high temperature superconduct materials, memory alloy materials (titanium nickel,
copper and iron memory alloy materials) , super minute (nanometer) calcium carbide and super
minute (nanometer) crystal hard ally, superhard compound materials, noble metal compound
materials, aluminum foil used for radiator, middle and high pressure cathode capacitance
aluminum foil, special kind of large aluminum alloy materials, aluminum alloy precise model
forge product, electrization railway built on stilts leads, super-thin copper strip, erosion proof heat
exchanger copper alloy material, high capability copper nickel, copper and iron alloy strip,
beryllium copper strip, thread, tube and stick process material, high temperature bearable tungsten
filament, magnesium alloy cast, non-lead solder, magnesium alloy and its applicable products,
bubble aluminum, titanium alloy strip materials and titanium jointing pipes, atomic energy grade
sponge zirconium, tungsten and molybdenum deep machining products.
16. Metal products industry
(1) Production of lightened car, automobile and environment protecting new materials (bodywork
aluminum board, aluminum magnesium alloy materials, automobile aluminum alloy frame and so
on).
(2) Development and production of high-grade hardware for construction, hot-water heating
equipment and hardware parts.
(3) Production and processing (including painting and processing inner and outer surface of the
products) of metal packing products (thickness < 0.3mm) used to pack all kinds of grain, oil and
food, fruits, vegetables, beverages, daily using materials and such contents.
17. General Machine-building Industry
(1) Manufacturing of numerically controlled machine tools of high level and key spare parts:
numerically controlled machine tools which exceed quintuple linkage, digital control coordinate
spindle processing centre , digital control system which exceeds quintuple linkage and
servomechanism installations, high-speed and super-strong knifes for exact digital control
manufacturing.
(2) Manufacturing of multi-station forging forming machine of 1000 tons or more
(3) Manufacturing of equipments for braking up and smashing retired cars
(4) Manufacturing of soft FTL product line



                                                  46
(5) Manufacturing of vertical articulated industrial robots, welding robots and welding equipments
thereof
(6) Manufacturing of special processing machines: complete sets of laser cutting and welding
equipments, exact processing laser equipments, digital-control and low-speed wire-cuts,
submicron cracker
(7) Manufacturing of wheel or crawler crane of 300 tons or more (limited to equity joint ventures
or contractual joint ventures)
(8) Design and manufacturing of high pressure plunger pumps of pressure (35-42MPa) and engine,
design and manufacturing of low-speed big torquey engine of pressure (35-42MPa)
(9) Manufacturing of electro-hydraulic proportion servo elements
(10) Design and manufacturing of integrated multi-path valves of pressure (21-31.5MPa),
pneumatic solenoid valves of less than 0.35W high-frequency electrical control valves of more
than 200Hz
(11) Design and manufacturing of hydrostatic drive device
(12) Development and manufacturing of non-contacting gas film seal of pressure more than
10MPa, dry gas seal of pressure more than 10MPa (including experience device)
(13) Development and manufacturing of macromolecule material device for automobiles (rub
piece, changed phenol aldehyde plunger, non-metal liquid pressure mother pump and so on)
(14) Manufacturing of car boss axletree of 3 and 4 generation (function elements of boss axletree
of flange and transducer inside or outside of the axletree,digital control machine tool or
processing centre axletree of high or mid class (the processing center should have more than three
axis interlocking function and 3-4μm repeated precision),high-speed wire or board rolling mill
axletree (assistant axletree and roller axletree of single-wire rolling mill of more than 120m/s and
of thin-board rolling mill of more than 2mm),high-speed railway axletree (with speed of more
than 200km/h),low-noise axletree of vibration of less than Z4 (Z4, Z4P, V4, V4P),level P4, P2
axletree of various axletree
(15) Production of high temperature resistant and insulation material (with F, H insulation class),
as well as insulation shaped parts
(16) Development and manufacturing of fluid pressure rubber sealing
(17) Manufacturing of high binding spares of 12.9 level or more
(18) Manufacturing of casting and forging workblanks for cars and motorcycles
(19) Remanufacturing of machine tools, spare parts of cars (except five matured varieties)and
project machines.
18. Special Equipment Manufacturing
(1) Manufacturing of mine trolley mining, loading and transporting device:mechanical drive
tipper for mine of 100 tons or more, mobile crusher,wheeled digger of 3000/h or more,loading
machine for mine of 5 m3 or more,electric driving mining machine of 2000 kw or more and so on
(2) Manufacturing of geophysical, logging equipment: MEME geophone, digital telemetry
seismograph, digital imaging, computerized logging system, horizontal wells, directional wells,
drilling rig equipment and apparatus, MWD logging while drilling


                                                47
(3) Manufacturing of oil exploration, drilling, gathering and transportation equipment: floating
drilling systems and floating production systems which will work in more than 500 meters of
water depth, working depth greater than 600 meters undersea oil production, gathering and
transportation equipment, power of winch greater than 3,000 kilowatts, top driving force greater
than 850 kilowatts, drilling pump more than 1,800 kilowatts of power by deep-sea oil rig, drilling
depth of 9,000 meters above the desert land drilling rig and oil rig, 10 million tons / year oil
refining installations with 80 tons and above Pistons edge reciprocating compressor, NC oil Sham
Tseng logging, oil Drilling Mud Hole solid operating highway tunnel monitoring equipment,
ventilation, disaster prevention and relief system equipment manufacturers
(4) Design and manufacturing of skeleton shield integrated system with diam of 6 meters, TBM
system integrating with diam of 5 meters; manufacturing of large digging drilling of caliber of 1
meter and depth of 30 meters, design and manufacturing of push bench with diam of 1.2 meters or
more, manufacturing of large complete non-digging pipeline laying device with pulling power of
200 tons or more, manufacturing of consecutive wall underwater drilling machine, manufacturing
of automatic vertical drilling system
(5) Design and manufacturing of large lifting machine of 100 tons or more 320hp
(6) Design and manufacturing of pedrail soil shifter of ground pressure of 0.03MPa or less, power
of 220 hp or more,large soil shifter of 520 hp or more
(7) Design and manufacturing of purge machine of 100 m3/h or more, digging device in digging
vessel of 5000 tons or more
(8) Design and manufacturing of tuffcrete diosmosing-proof wall for flood control bar
(9) Manufacturing of machine for underwater mass:soil shifter, loader and digger 9 miles under
water
(10) Manufacturing of devices of road bridge maintaining and automatic testing
(11) Manufacturing of devices of road tunnel supervision, winding, disaster control and rescuing
system
(12) Design and manufacturing of the large-scale railway construction, and operation of
large-scale road maintenance machinery and safety equipment
(13) Manufacturing of (asphalt) shingles equipment, galvanized steel and other metal roof
production equipment
(14) Manufacturing of spot spraying polyurethane waterproof thermal insulation system
equipment which could protect environment and conserve energy, technology and equipment of
polyurethane sealant paste preparation, technology and production equipment of modified silicone
sealing paste preparation
(15) Design and manufacturing of thin-slab continuous casting machine, high-precision strip mill
(with thickness of precise 10 microns)
(16) Manufacturing of devices of direct reverting iron and liquation reverting iron
(17) Manufacturing of high power DC electric arc furnace of 50 tons or more
(18) Manufacturing of colorful panting or plating board devices
(19) Manufacturing of selecting device for multi-element, fine-powder and hard-selecting mine



                                                 48
(20) Manufacturing of key devices of 800000 tons/year or more of oxene complete devices:air
compressor of pyrolysis gas, oxene and elemicin, complicated powder making machine of
1000000 tons/year, centrifuge with diam of 800 millimeter, unattackable pump and valve that can
work under conditions of temperature 250℃ and pressure 15Mpa, valve that can work under
conditions of temperature -55℃ or less and so on (limited to equity joint ventures or contractual
joint ventures)
(21) Manufacturing of large complete devices of chemical processing of coal (limited to equity
joint ventures or contractual joint ventures)
(22) Design, manufacturing and maintaining of metal product moulds (such as extrusion moulds
of pipe, stick and shape of copper, aluminum, titanium and zirconium)
(23) Design and maintaining of punching mould of cover elements of automobile outside, clamp
and test tools of automobile and motorcycle
(24) Design and maintaining of punching mould with precision of more than 0.02 millimeter
(including 0.02 millimeter), precise mould with precision of more than 0.05 millimeter (including
0.05 millimeter) and mould standard elements.
(25) Design and manufacturing of nonmetal product moulds
(26) Manufacturing of beer filling device of 60000 bottles /h or more, drink mid or high hot filling
device of 5 bottles /h, asepticism filling device of 36000 bottles /h or more
(27) Manufacturing of producing technologies and key equipments for aminophenol, zymi, food
addiitive and so on
(28) Manufacturing of complete feed processing equipment of 10tons/h or more and key parts
thereof
(29) Manufacturing of light board and box device of 0.75-millimeter high or less
(30) Manufacturing of single in folio colorful lithographic printing machine with speed of more
than 16000 pages in folio /h (720×1020 millimeters), diprosopia in folio colorful lithographic
printing machine with speed of 13000 pages in folio /h (720×1020 millimeters), colorful
lithographic in folio printing machine with speed of 13000 pages in folio /h (1000×1400
millimeters)
(31) Manufacturing of single roll lithographic printing machine with speed of more than 75000
pages in folio /h (787×880 millimeters), diprosopia single roll lithographic printing machine with
speed of more than 170000 pages in folio /h (787×880 millimeters)
(32) Manufacturing of colorful soft printing machine with speed of 300meters/m or more and
coverage of 1000 millimeters or more
(33) Computer pre-set color, color remote control, the speed of tracking ink, and the automatic
testing system on printing quality and tracking system, no-axis rotation technology, the rate of
75,000 / h high-speed automatically machine of paper receiver and sender. And automatic remote
adjustment machine for the high-speed folding Page machine, automatically overprinting system,
cooling devices, silicon putting systems, deviation-adjustment device and so on.
(34) Deep processing technique and equipment manufacturing of plate glass
(35) Special high-tech Industrial sewing machines manufacturing
(36) Manufacturing of complete set of new type of paper (including pulp) making machines



                                                 49
(37) Manufacturing of equipment with new technique for post ornament and processing of leather
(38) Development and Manufacturing of new agriculture processing and storage equipment: new
equipment for the processing, storage, preservation, classifying, packing, and drying of food, oil,
vegetables, dried fruits and fresh fruits, flowers, meat and aqua-products; agricultural product
quality testing equipment; the quality detection equipment of agricultural products' damage;
Rheometer; Farinograph; ultrafine pulverization equipment; Highly efficient dewatering
equipment; 5-grade plus high efficient fruit juice condensation equipment ; equipment for
Disinfection of powder food in Media; Aseptic packaging equipment for Semi-solid and solid
food; Packaging Materials for Aseptic packaging, DVS Bacteria Starter for Dairy Production,
Disc-type Separation centrifuges
(39) Manufacturing of Agricultural machinery: facility agriculture equipment (greenhouse
Automatic irrigation equipment, Autocontrol configuration and fertilization Equipment of
Nutritious Liquid, Efficient vegetable nursery equipment, Soil nutrient analysis instruments),
Tractor and associated farm tools with 120 kilowatts and above Matching engine power, Low fuel
consumption, low noise and low-emission diesel engine, Spray Machines with Residual fog tablets
Recovery Unit matching of large tractor, High-performance rice transplanter, Cotton harvesting
machine, Adapted to a variety of row-spacing Self-moving Maize Reaping Machine (Hydraulic
drive or mechanical drive)
(40) Manufacturing of new technical forestry equipment
(41) Manufacturing of equipment for reusing in fields and comprehensive utilization of straws and
stalks of crop, Manufacturing of equipment for comprehensive utilization of Rice Husk
(42) Manufacturing of equipment for comprehensive utilization of waste agriculture products and
waste fowl and livestock products which are bred in scale
(43) Manufacturing of festival fertilizer, pesticide section, water-saving technical Agriculture
equipment
(44) Manufacturing of cleaning equipment for electromechanical wells and equipments for
Laundering drug production
(45) Manufacturing of electronic endoscopes
(46) Manufacturing of Fundus Cameras
(47) Manufacturing of Medical imaging equipments' Key components (high magnetic field
intensity and superconduct MRI, CT, X-ray computed tomography, type-B ultrasonic)
(48) Manufacturing of Medical Ultrasonic Transducer (3D)
(49) Manufacturing of boron neutron capture therapy equipments
(50) Manufacturing of X-ray Stereotactic Radiotherapy System
(51) Manufacturing of Hemodialysis, Blood Filter
(52) Manufacturing of equipment for auto elisa immuno system (including the functions of
application of sample, elisa photo meter, wash plate, incubation, data, post treatment, etc.)
(53) New techniques of quality control of medicine products and new equipment manufacturing
(54) New analytical techniques and extraction technologies, and equipment development and
manufacturing for the effective parts of traditional Chinese medicines



                                                 50
(55) Producing and manufacturing of new packing materials, new containers for medicine, and
advanced medicine producing equipment
(56) Development and Manufacturing of equipment of new type of knitting machines, Key parts
and Textile testing, laboratory equipment
(57) Manufacturing of Computer Jacquard artificial fur machine
(58) Manufacturing of Special Equipments for solar cell production
(59) Development and Manufacturing of Pollution control equipments
(60) Manufacturing of City Waste disposal equipments and equipments for Comprehensive
Utilization of Rural organic waste
(61) Manufacturing of Waste plastics, electronics, rubber, battery Recycling Equipments
(62) Technology of hydrophily ecological system for protecting environment and equipment
manufacturing
(63) Development and Manufacturing of 100,000 cubic meters and above Daily production
seawater desalination and recycling cooling technology and complete sets of equipments
(64) Manufacturing of special Meteorological observation and analysis equipments
(65) Development of Seismic station, Seismic Network, and Mobile seismological observation
technology System, and Manufacturing of equipments
(66) Manufacturing of three-drum radial tire building machines
(67) Manufacturing of Rolling resistance testing machine and Tire noise lab
(68) Manufacturing of new Heating measurement and Temperature Control Device Technical
equipments
(69) Manufacturing of preparation, storage and transportation equipment and inspection systems
of hydrogen energy
(70) Manufacturing of new Heavy residue gasification Atomization Nozzle, Steam leakage rate of
0.5% and below efficient Steam Traps, 1000°C and above high-temperature ceramic heat
exchanger manufacturer
(71) Manufacturing of Comprehensive Utilization of waste tire equipments
19. Communication and Transportation Equipment Industries
(1) Manufacturing of complete automobiles (foreign investments shall not exceed 50%) and
construction of automobiles research and development organization
(2) Manufacturing of automobile engine, reused manufacture of engines and construction of
engine research and development organization:gasoline motor with output per litre not lower than
50 kw, diesel motor with output per litre not lower than 40 kw and discharge capacity below 3
liters, diesel motor with output per litre not lower than 30 kw and discharge capacity above 3 liters,
motor driven by such new resources as fuel cells and compound fuel
(3) Manufacturing of key spare parts for automobiles as well as research and development of key
technologies: complete disc brakes, complete driving rods, automatic gearboxes, fuel pumps of
diesel engine, inhalant supercharger of engines, adhesive axial organ (used for four-wheel drive),
hydraulic tappet, electronic cluster gauge, crankshaft and connecting bar (diesel motor above 8
liters), Anti-Lock Brake System(ABS, ECU, valve body, sensor), ESP, BBW, electronic braking
distribution system(EBD), driving control system, gas generator for automobile airbags, electronic

                                                 51
fuel injection system, sprays technology on fuel common rail technology (utmost spray pressure
above 1600 pa), VGT, VNT, discharge control equipment of motor meeting the pollutant
discharge standard of the fourth phase of China, ITM and coupler assembly, Steer-by-Wire
System, Diesel Particulate Filter(DPF), intelligent cylinder, special rubber automobile components
(4) Production as well as research and development of automobile electronic devices: engine and
underchassis control system as well as key spare parts, in-vehicle electronic technology
(automobile information system and navigation system) , automobile electronic network
technology (limited to equity joint ventures),components for the input (sensor and sampling
system) and the output (actuator) of electronic control system, EPS electronic controller(limited to
equity joint ventures),embedded electronic integration system (limited to equity joint ventures or
contractual joint ventures), electronic-controlled air suspension, ECS,electronic valve system
equipment,electronic throttle, power cell (NiH and Li-con) and control system (limited to equity
joint ventures),integrated motor and control system(limited to equity joint ventures),wheelboss
motor, multifunction controller (limited to equity joint ventures),fuel cell and spare parts thereof,
hydrogen storing systems for automobiles,testing system for experiment and maintaining of
automobile and motorcycle models
(5) Manufacturing of key parts for motorcycle:technology of electrical control fuel injection for
motorcycle(limited to equity joint ventures or contractual joint ventures), engine discharging
device which satisfy motorcycle discharging criteria stage Ⅲ of China
(6) Equipment for railway transportation (limited to equity joint ventures or contractual joint
ventures):research and development, design as well as manufacturing of complete train and key
spare parts (drive system, control system, brake system) of rapid transit railway, railway of
passenger special line, intercity railway, trunk railway and equipment for urban railway
transportation;research and development, design as well as manufacturing of passenger service
facilities and equipment for rapid transit railway, railway of passenger special line, intercity
railway and urban railway transportation,design as well as research and development of related
information system in the process of construction of information age;research and development,
design as well as manufacturing of railway and bridge facilities and equipments for rapid transit
railway, railway of passenger special line, intercity railway,manufacturing of equipment and
fixtures for electrical railway, research and development of technologies for controlling railway
noise and vibrating, manufacturing of discharging equipment for trains, manufacturing of safety
monitoring equipment for railway transportation
(7) Design, manufacturing and maintaining of civil plane: those of trunk and branch lines (Chinese
part shall hold the majority of shares),general ones (limited to equity joint ventures or contractual
joint ventures)
(8) Production and maintaining of spares parts for civil planes
(9) Design and manufacturing of civil helicopters: those of three tons or more (Chinese part shall
hold the majority of shares), those of less than three tons (limited to equity joint ventures or
contractual joint ventures)

                                                 52
(10) Production of spares parts for civil helicopters
(11) Manufacturing of ground and water effect plane (Chinese part shall hold the majority of
shares)
(12) Design and manufacturing of no-people plane and aerostat (Chinese part shall hold the
majority of shares)
(13) Design, manufacturing and maintaining of plan engines and spare parts as well as air assistant
power systems (limited to equity joint ventures or contractual joint ventures)
(14) Design and manufacturing of civil air-borne equipment (limited to equity joint ventures or
contractual joint ventures)
(15) Design and manufacturing of civil rocket launcher (Chinese part shall hold the majority of
shares)
(16) Manufacturing of flight ground equipments: civil airfield facilities, support equipment for
civil airfield work, ground equipment for flight test, equipment for flight simulation and practice,
equipment for aeronautic testing and measuring, equipment for aeronautic ground testing,
comprehensive testing equipment for machines, special equipment for aeronautic manufacturing,
equipment for pilot manufacturing aeronautic materials, ground receiving and applying equipment
for civil aircraft, ground testing equipment for rocket launcher, equipment for dynamic and
environmental experience for rocket launcher
(17) Manufacturing of mechanical and electrical products for aircrafts, temperature control
products for aircrafts, test equipment for planet products and structure and organization products
for aircrafts
(18) Manufacturing of light gas-turbine engine
(19) Design of vessels and equipment for ocean project of high and new technologies (limited to
equity joint ventures or contractual joint ventures)
(20) Maintaining, design and manufacturing of vessels (including stages) and equipment for ocean
project (Chinese part shall hold the majority of shares)
(21) Design and manufacturing of diesel engine for vessel of low, mid and high speed (limited to
equity joint ventures or contractual joint ventures)
(22) Design and manufacturing of spare parts for diesel engine for vessel (limited to equity joint
ventures or contractual joint ventures)
(23) Design and manufacturing of crankshafts of low and mid speed for diesel engine for vessel
(Chinese part shall hold the majority of shares)
(24) Design and manufacturing of stateroom machine and deck machine for vessels (Chinese part
shall hold the relative majority of shares)
(25) Design and manufacturing of communication and directing systems for vessels :
Communication systems, electronic directing equipment, vessel radar, electric compass automatic
pilot, public broadcasting systems inside vessels and so on
(26) Design and manufacturing of overseas fishing vessels and cabin cruiser (limited to equity
joint ventures or contractual joint ventures)
20. Electric Machinery and Equipment Industries



                                                   53
(1) Manufacture of the pivotal equipment of super-critical units of over 600,000 KW,and over
1,000, 000KW of fire and electricity station (limited to equity joint ventures and cooperative joint
ventures): boiler-feedwater pump, circular water pump, valve of main steam loop high
temperature and pressure which is over 400℃work temperature and 20Mpa of work pressure
(2) Manufacture of the equipment of Over million kilowatt Nuclear-power plant (limited to equity
joint ventures and cooperative joint ventures) Pump and valve of Nucleus, Nucleus Ⅱ
(3) Manufacture of the technical and equipment of Fire- electricity plant to decoke and saltpeter,
hop-pocket dust catcher
(4) Design and manufacture of the equipment of nucleus-electricity and fire-electricity airproof
(5) Manufacture of the equipment of nuclear-power of great model casting-forge
(6) Power transmitting and transforming equipment (limited to equity joint ventures and
cooperative joint ventures): non-brilliant form transformer, high voltage implement great bushing,
high voltage on-off operation implement, and freedom integer arc contact, direct current transmit
electricity dried reactor, 6 inch direct current convertor clique high-power grain-valve tube,
electrical apparatus contact material, and non-Pb, non-Cd solder accorded with EU command of
RoHS
(7) Manufacture of the equipment of New energy electricity-power (limited to equity joint
ventures and cooperative joint ventures): photovoltaic power, geothermal power generation, tidal
power generation, wave power generation, rubbish power generation, methane power generation,
wind power generation over 1.5M
(8) Manufacture of Stirling generating set
(9) Empolder and manufacture of straight line and plane motor and drive system
(10) Manufacture of solar air conditioning, heating system, solar dryer
(11) Manufacture of biomass drying pyrolysis system, biomass, gasification unit
(12) Manufacture of ac-fm voltage regulation drawbar
(13) Manufacture of intelligent moulded case circuit (3800V, 1000A), large project intelligent
cabinet or drawer type circuit breaker, belt- type intelligent electronic control distribution device
21. Communication Equipment, Computer and other Electronic Equipment Manufacturing
(1) Digital video camera, digital sound-playing equipment and player equipment manufacturing
(2) Manufacture of flat panel display such as TFT-LCD, PDP, OLED, FED (including SED) and
the material of flat panel display
(3) Manufacture of such parts as optical engine, light source, projection screen, high-resolution
projection tube and LCOS module used in large screen color projection display
(4) Manufacture of digital audio and visual coding or decoding equipment, digital broadcasting
TV studio equipment, digital cable TV system equipment, digital audio broadcast transmission
equipment, digital television converter, digital television broadcasting Single Frequency Network
(SFN), satellite digital TV up-linking station, front-emd equipment manufacturing of SMATV
(5) Manufacture of high-performance single-lens reflex with more than 6 million pixels
(6) Design of integrate circuit, and manufacture of large digital integrate circuit with its wire width
less than 0.18 micron, manufacture of simulated and digital analogy integrate circuit less than 0.8
micron and the encapsulation and test of such advanced equipment as BGA, PGA, CSP, MCM

                                                  54
(7) Large and medium-sized computer, high-performance computer with its operation more than
100 trillion times, portable micro computer, high-rank server with its operation more than 1
trillion times per second, large scale simulated system, large industrial controller and the
manufacture of controller
(8) Manufacture of computer digital signal process system and board card
(9) Manufacture of figure and image recognition process system
(10) Development and manufacture of large-capability optical and disk driver
(11) Manufacture of high-speed storage system and intelligent storage equipment with its
capability more than 100 TB
(12) Manufacture of large-breath (more than 900mm) high-definition colored printing equipment,
high-definition colored printer head with its precision more than 2400dbi, and large-breath( more
than 900mm) high-definition colored Xerox equipment
(13) Manufacture of Computer Assistance Design(three-dimensional CAD), Computer Assisted
Testing (CAT), Computer Aided Manufacture (CAM) , Computer Aided Engineering (CAE) and
other computer application system
(14) Development and manufacture of software product
(15) Development and manufacture of specialized electronic material( excluding the development
and manufacture of optical fibre perform rod )
(16) Manufacture of specialized equipment, testing equipment, tools and moulds
(17) Manufacture of new type electronic components and parts: slice components, sensitive
components and sensors, frequency monitoring and selecting components, mix integrated circuit,
electrical and electronic components, photoelectric components, new type components for
machinery and electronics, high-density interlinked build-up board, multilayer flexible board,
flexible printing circuit board and packaging substrate
(18) High-tech green battery manufacture: dynamic zinc and nickel storage cell, zinc and silver
storage cell, lithium-ion batteries, high-capability, air-proof and repair-free lead-acid battery, solar
battery, fuel battery, column-shaped zinc-air battery and etc.
(19) High-brightness LBD with its luminous efficiency more than 501m/W, epitaxial slice LBD
(blue) with its luminous efficiency more than 501m/W, white luminous tube with luminous
efficiency more than 501m/W and its power more than 200mW
(20) Development and manufacture of RFID chip
(21) Development and manufacture of key components and parts used in high-precision digital
CD drive
(22) Reproduction of read-only compact disk and manufacture of recordable compact disk
(23) Design and manufacture of civil satellites {Chinese partner shall hold the majority of shares}
(24) Manufacture of civil satellites effective payload (Chinese partner shall hold the majority of
shares)
(25) Manufacture of spare pans for civil satellites
(26) Manufacture of telecommunication system equipment for satellites
(27) Manufacture of receiving equipment of satellite navigation and key components



                                                  55
(28) Manufacture of optical communication measurement and instrument and light transceiver
with its speed more than 10Gb/s
(29) Ultra Broad Band (UWB) communication equipment manufacture
(30) Manufacture of wireless Local Area Network (Wide Area Network)
(31) Manufacture of Optical Cross Connect (OXC), Automatic Switch Optical Network (ASON) ,
optical fiber communication and transmission equipment more than 40G/sSDH and Coarse Wave
Division Multiplexing (CWDM)
(32) Manufacture of Asynchronous Transfer Mode (ATM) and IP digital communication system
(33) Development and manufacture of third-generation and the following mobile communication
system mobile phone, base station, core network equipment and network testing equipment
(34) Development and manufacture of high-end router, network switcher more than 1 kilo mega
(35) Manufacture of air traffic control system equipment (limited to joint venture and cooperation)
22. Machinery Industries for Instrument and Meter, Culture and Office
(1) Manufacture of field-bus control system and its key components and parts
(2) Development and manufacture of large-scale sophisticated instruments: including electron
microscope, laser scanning microscope, scanning tunneling microscope, laser with its power more
than 2kw, industrial chromatograph, GC/MS, nuclear magnetic resonance spectrometer, energy
dispersive analysis system, X-ray fluorescence spectrometer, diffraction analysis system,
industrial CT, large-scale balance measuring machine, automatic testing system of on-line
mechanical quality, ultra-speed centrifuge with its rotating speed more than 100000r/min,
large-scale metallurgical microscope, three coordinate measuring machine, laser comparator,
electrical prospecting instrument, airborne electrical prospecting and gamma-ray spectrometry
measuring instrument more than 500 m, borehloe gravimetry and 3-dimensional magnetograph,
high-precision microgal and aviation gravity gradiometer, High-performance welding rare earth
material with permanent magnetism, portable geological radar
(3) Manufacture of high-precision digital voltmeter, current meter (with measuring range of seven
bit and a half and above)
(4) Wattless Power manufacture of automatic compensation equipment
(5) Manufacture of two-phase flowmeter and solid flowmeter
(6) Manufacture of automatic plating machine for electron gun
(7) Manufacture of industrial NDT X-ray equipment governing the volt more than 800 kv
(8) Manufacture of new technical equipment for safety production and environmental protection
(9) VXI bus automatic test system (in accordance with IEEE1155 international standards)
(10) Development and manufacture comprehensive management system for under-mine
monitoring and disaster-forecasting apparatus and coal safety measurement
(11) Manufacture of the equipment for engineering measurement and global geographical
observation equipment: digital triangle surveying system, Digital programmed system for
three-dimensional topography model (acreage>1000×1000mm, horizontal error<1mm, altitude
error <0.5mm), ultral wideband seismograph(φ < 5cm, frequency band0.01-50HZ, equivalent
quaking speed noise<10-9m/s), integrated earthquake data processing system, extensive
under-well earthquake and auspice observation apparatus, sophisticated controllable epicenter


                                                56
system, engineering velocity measuring system, high-precision GPS receiver (precision 1mm +
1ppmm), INSAR graphics receiving and processing system, absolute gravimeter with the
precision less than 1 microgal, satellite gravimeter, Doppler weather radar adopting coherent
technology or double polarization technology, visibility measuring apparatus, meteorological
sensor, (including temperature, pressure, humidity, wind, precipitation, cloud, visibility, radiation,
frozen earth, depth of snow), anti lightning stroke system, multilevel soot and dust sampler,
three-dimension supersonic anemoscope, high-precision intelligent total station machine,
three-dimensinal laser scanner, high performance diamond bit used for drilling, laser rangerfinder
without cooperative target, wind profiler(affixed with RASS), GPS electronic probe system,
CO2/H2O general observation system, boundary layer laser doppler radar, granule
chromatography, (3nm-20μm) , high-performance data collector, under-water glider
(12) Manufacture of new-tech equipment of environmental-protection testing instrument: air
quality testing, water quality testing, new-tech equipment of fume on-line detecting instrument,
apparatus for emergency treatment and complete-set new differential coefficient analysis system,
automatic calibration, composite, low-drift, on-line remote measurement and remote controlled
apparatus and system and etc.
(13) Manufacture of air-pollution prevention and control equipment: high-temperature-proof and
erosion-proof filtering material, wet desulfurization complete-set equipment in coal-fueling
factory, low-NOX fueling equipment, catalysts for denitrification of fuel gas and complete set of
denitrification equipment, purified equipment for the polluted organic gas, purified equipment for
gas expelled from diesel-driven automobile
(14) Manufacture of equipment for water-pollution prevention and control: horizontal screw
centrifugal dehydrator, membrane and its material, ozonizer more than 10kg/h, NO2 generator
with more than 10kg/h, ultraviolet disinfection device, small domestic sewage treatment device in
the rural area
(15) Manufacture of the equipment for treating solid refuse: earth- leak-proof membrane in refuse
burying factory, the device for treating dangerous solid waster, methane-for-electricity equipment
in refuse burying factory, the equipment for comprehensively using the domestic animal and fowl
waste in large scale
(16) Manufacture of environment motoring apparatus: SO2 automatic sampler and calcimeter,
NOX, NO2 automatic sampler and calcimeter, O3 automatic monitor, CO automatic monitor,
automatic sampler and calcimeter for soot and dust, automatic sampler and calcimeter for soot,
portable calcimeter for harmful and toxic gas, automatic analyzer for organic pollutants in the air,
COD automatic online monitor, BOD automatic online monitor, automatic online monitor for
turbidity, DO automatic online monitor, TOC automatic online monitor, Automatic online monitor
for ammonia nitrogen, radiation dose monitor, ray analyzer
(17) Manufacture of instrument and equipment for hydrological data collecting, processing,
transmitting and flood warning
(18) Manufacture of ocean exploring apparatus and equipment: deep-sea underwater video camera
and underwater camera, multi-beam explorer, shallow and deeper subbottom profiler, navigation
warm-salt profiler, fluxgate compass, hydraulic wire line winch, underwater airproof electronic

                                                 57
connector, energy recycle device used in filtration-proof seawater desaltation with its efficiency
more than 90%, high-pressure pump used in filtration-proof seawater desaltation with its
efficiency more than 85%, filtration-proof seawater desaltation membrane (desaltation rate more
than 99.7%), low-temperature multifunction distilled seawater desaltation equipment with its daily
production more than 20,000 tons, Marine ecosystem inspection buoy, section probing buoy,
disposable measuring instrument of electrical conductivity, temperature and depth (XCTD),
on-the-spot water quality measuring apparatus, intelligent chemical transducer for measuring the
water quality of the ocean (continues work for 3-6 months), electromagnetic current meter sensor,
navigating acoustic Doppler current profiler (self-contained, direct-read, used-in-ship), electricity
conductivity rate deep-section profiler, acoustic responding emancipator (set deep into the ocean)
23. Other Manufacturing Industries
(1) Development and utilization of clean-coal technical product (coal gasification, coal
liquefaction, water-coal, industrial lump-coal)
(2) Coal ore dressing by washing and comprehensive utilization of powered coal (including
desulphurized plaster), coal gangue
(3) Production of the all biodegradable material
IV. Production and Supply of Power, Gas and Water
1. Construction and operation of electricity power by employing the clean fuel technology of
integral gasification combined circulation (IGCC), circulating fluidized bed more than 0.3 million
kw, Pressurized Fluidized Bed Combustion Combined Cycle (PFBC) more than 0.1 million kw
2. Construction and operation of back pressure combined and heat power
3. Construction and management of hydropower stations with the main purpose of power
generating
4. Construction and management of nuclear-power plants (Chinese partner shall hold the majority
of shares)
5. Construction and management of new energy power plants (solar energy, wind energy,
magnetic energy, geothermal energy, tide energy and biological mass energy, etc.)
6. Utilization of sea water (direct use of sea water, seawater desaltation), using industrialization to
recycle industrial sewage
7. Construction and operation of urban water-supply plant
V. Communication and Transportation, Storage, Post and Telecommunication Services
1. Construction and management of grid of national trunk railways (Chinese partner shall hold the
majority of shares)
2. Construction and management of feeder railways, local railways and related bridges, tunnels
and ferry facilities (limited to equity joint ventures or contractual joint ventures)
3. Comprehensive maintenance of infrastructure of high-speed railway, special railway line,
intercity (Chinese partner shall hold the majority of shares)
4. Construction and management of highways, independent bridges and tunnels
5. Road freight transportation companies
6. Construction and management of public dock facilities of ports



                                                   58
7. Construction and management of civil airports (the Chinese party shall hold the relative
majority of shares)
8. Air transportation companies (Chinese partner shall hold the majority of shares)
9. General aviation companies for agriculture, forest and fishery (limited to equity joint ventures
or contractual joint ventures)
10. International liner and tramp maritime transportation business (the Chinese party shall hold the
relative majority of shares)
11. International containers inter-model transportation
12. Construction and management of oil (gas) pipelines, oil (gas) depots and petroleum wharf
13. Construction and management of the facilities of coal delivery pipelines
14. Construction and management of storage facilities relating to transportation services
VI. Wholesale and Retail Trade Industry
1. Wholesale, retail and logistic distribution of general goods
2. Modern logistics
VII. Rent and Business Service
1. Accounting and auditing ((limited to equity joint ventures or contractual joint ventures)
2. Information consulting agencies of international economy, science and technology,
environmental protection
3. Engaged in such information technology and business flow outsourcing services as system
application management and maintenance, information technology supportive management, bank
background service, financial settlement, human resource service, software development, call
center, data processing by means of accepting service outsourcing
VIII. Scientific Research, Technology Service and Geological Exploration
1. Biological engineering technique and bio-medical engineering technique
2. Isotope, irradiation and laser technique
3. Sea development and sea energy development technology, comprehensive technology of sea
chemical resources, development of the relevant products and deep-processing technology, sea
medicine and biochemical product development technology
4. Sea surveying technology (sea tidal wave, meteorology, environmental monitoring) sea bed
probing, exploration and evaluation technology of ocean resource
5. Comprehensively use the high chemical additional value technology to distill chemical
potassium, bromine, magnesium from dense sea water after desaltation and its deep procession
6. Development of energy-saving technology
7. Technology for recycling and comprehensive utilization of resource, development and
application of the recycling technology of the waste dispelled by enterprises
8. Technology for environment pollution treatment and monitoring
9. Energy-saving and consumption-reduction in chemical fiber production and the new technology
to deal with polluted air, water and solid waste
10. Technology for preventing from desertification and desert improvement
11. Comprehensive management technology for balancing grass and domestic animal
12. Application technique of civil satellite


                                                   59
13. Research and development centers
14. Incubator for hi-tech, new products developing, and incubation of enterprises
IX. Water, Environment and Public Facility Management Industry
1. Construction and management of key water control projects for comprehensive utilization (the
Chinese party shall hold the relative majority of shares)
2. Construction and management of urban access-controlled roads
3. Construction and management of metro and city light rail (Chinese partner shall hold the
majority of shares)
4. Construction and management of treatment plants for sewage, garbage, the dangerous wastes
(incineration and landfill), and the facilities of environment pollution treatment
X. Education
1. Advanced educational institution (only limited to joint venture or cooperative)
XI. Public Health, Social Security and Social Welfare
1.   Service agencies for the elderly, the handicapped and children
XII. Culture, Sports and Entertainment
1.   Operation of the performance site (the Chinese party shall hold the relative majority of shares)
2.   Operation of the gymnasium, body-fitting, competition performance, sports training and
     agency service


Catalogue of Restricted Foreign Investment Industries
I. Farming, Forestry, Animal Husbandry and Fishery Industries
1. Breeding and seeds developing production of new train crop breed (Chinese party shall hold the
majority of shares)
2. Processing of the logs of precious varieties of trees (limited to equity joint ventures or
contractual joint ventures)
3. Cotton (raw cotton) processing
II. Mining Industries
1. Exploring and mining of special and scarce coals exploration (Chinese partner shall hold the
majority of shares)
2. Exploring and mining of barite (limited to equity joint ventures or contractual joint ventures)
3. Exploring and mining of precious metals (gold, silver, platinum families)
4. Exploring and mining of precious non-metals such as diamond
5. Exploring and cradling of phosphorite
6. Mining of szaibelyite and szaibelyite iron ores
7. Mining of Celestine
8. Mining of Ocean Manganese Nodule (Chinese partner shall hold the majority of shares)
III. Manufacturing Industries
1. Farming Subsidiary Foodstuff Industry
(1) Processing of soybean, rapeseed edible oil (Chinese partner shall hold the majority of shares),
deep-processing of corn
(2) Manufacturing of biology liquid fuel


                                                  60
2. Beverage Manufacturing Industries
(1) Rice wine, famous wine production (Chinese partner shall hold the majority of shares)
(2) Carbonic acid beverage manufacturing
3. Tobacco Industries
(1) Manufacturing of threshing and curl tobacco leaf
4. Printing and Copy of Recording Vehicle
(1) Print of publication (Chinese partner shall hold the majority of shares, except packing and
presentation)
5. Petroleum Processing and Coking Industries
(1) Construction and management of refineries which annual produce less than 800 million tons
6. Chemical Raw Material Products Manufacturing Industry
(1) Sodium hydroxide and potash production
(2) Production of sensitive materials
(3) Production of benzidine
(4) Production of chemical products from which narcotics are easily made (ephedrine, 3, 4-idene
dihydro phenyl-2-acctonc, phenylacetic acid, 1-phenyl-2-acetone, heliotropin, safrole, isosafrole,
acetic oxide)
(5) Production of fluorine-chlorocardon, hydrogen- fluorine-chlorocardon, tetrafluoroethylene,
fluorination-aluminum and hydrofluoric acid
(6) Production of polybutadiene, emulsion polymerization buna S, thermoplastics buna S
(7)priduction of Methane Chloride(except for chloromethane ) and PVC
(8) Production of sulfate process titanium dioxide, open hearth process permanganate
(9) Production of baron, magnesium, iron ores
(10) Barium salt production
7. Medical and Pharmaceutical Products Industry
(1) Production of chloramphenicol, penicillin G, lincomycin, gentamicin, dihydrostreptomycin,
amikacin, tetracycline hydrochloride, oxytetracycline, medemycin, kitasamycin, ilotyin,
ciprofloxacin and offoxacin
(2) Production of analgin, paracetamol, Vitamin B1, Vitamin B2, Vitamin C, Vitamin E
(3) Production of immunity vaccines, bacterins, antitoxins and anatoxin (BCG vaccine,
poliomyelitis, DPT vaccine, measles vaccine, Type-B encephalitis, epidemic cerebrospinal
meningitis vaccine) which included in the State's Plan
(4) Production of material medicines for addiction narcotic and A class psychoactive drug
(Chinese partner shall hold the majority of shares)
(5) Production of blood products
(6) Production of non-self-destructible expendable injectors, transfusion systems, blood
transfusion systems, blood bags
8. Chemical Fibre Production Industry
(1) Production of chemical fibre drawnwork of conventional chipper
(2) Production of rayon staple viscose fibre
9. Rubber Products


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(1) Old tire recondition (not including radial tire), and production of industrial rubber fittings of
low-performance
10. Non-Ferrous Metal Smelting and Rolling Processing Industry
(1) Non-ferrous metal refining of tungsten, molybdenum, stannum (except tin compounds),
antimony (including antimony oxide and antimony sulphide)
(2) Non-ferrous metal refining of electrolytic aluminium, copper, lead, zinc and another
non-ferrous metal
(3) Smelting and separation of rare earth metal (limited to equity joint ventures or contractual joint
ventures)
11. Metal Manufacturing
(1) Manufacture of containers
12. Common Purpose Equipment Manufacturing Industry
(1) Manufacture of all kinds of general (p0) axletree and accessory (steel ball, cage), rough
(2) Manufacture of wheeled model, crawler crane less than 300 tons
13. Special Purpose Equipment Manufacturing Industry
(1) Production of low or middle class type-B ultrasonic displays
(2) Manufacture of equipment for producing long dacron thread and short fibre
(3) Manufacture of crawler dozers of less than 320 horsepower, hydraulic excavator less than 30
tons, wheel loader less than 6tons, grader of less than 220 horsepower, road roller, fork-lift truck,
non-calzada dumper truck, road surface milling rework machinery, garden machine and tools,
production of commodity concrete machinery (pump, agitating lorry, pump vehical)
14. Manufacturing of Transport and Communication Facilities
(1) Repairing, design and manufacture of common ship (including subsection) (Chinese partner
shall hold the majority of shares)
15. Manufacturing of Communication Apparatus, Computers and other Electric Installation
(1) Production of satellite television receivers and key parts
(2) Manufacture of fiscal cash register
IV. Production and Supply of Power, Gas and Water
1. Construction and management of conventional coal-fired power of condensing steam plants
whose unit installed capacity is less than 300,000kW, within the small power grid in Xizang,
Xinjiang, Hainan province, and the coal-fired power of condensing-extraction steam plants with
dual use unit cogeneration
2. Construction and management of power network
V. Communication and Transportation, Storage, Post and Telecommunication Services
1. Railway freight transportation companies
2. Railway passenger transportation companies (Chinese partner shall hold the majority of shares)
3. Corporate of highway passenger transport
4. Corporate of enter-leave country fleet operation
5. Corporate of water transportation (Chinese partner shall hold the majority of shares)
6. General aviation companies engaging in photographing, prospecting and industry (Chinese
partner shall hold the majority of shares)


                                                  62
7. Tele communication companies: telecommunication increment service (the foreign capital less
than 50%), motion tone and data service in basic telecom, interior business and international
business (the foreign capital less than 35%, 49% no later than 11th in December in 2007 is
permitted)
VI. Wholesale and Retail Trade Industries
1. Commercial companies of commodity direct selling, mail order selling, internet selling,
franchising, commissioned operation, commercial management
2. Wholesale, retail and logistic distribution of grain, cotton, vegetable oil, sugar, medicines,
tobaccos, automobiles, crude oil, capital goods for agricultural production (Chinese should hold
the majority of shares of the multiple shops which have more than 30 branch stores and sale
different kinds and brands of commodities from multi-suppliers)
3. Distributing and selling of audiovisual products (excluding movies) (joint venture or Chinese
should hold the majority of shares)
4. Commodity auctions
5. Ship agent (Chinese should hold the majority of shares), tally for foreign vessels (limited to
equity joint ventures or contractual joint ventures)
6. Wholesaling product oil and construction and operation of gasoline stations (Chinese should
hold the majority of shares of the multiple shops which have more than 30 branch stores and sale
different kinds and brands of commodities from multi-suppliers)
VII. Financial Industry
1. Banks, financial leasing companies, finance companies, trust investment companies, currency
brokerage companies
2. Insurance companies (the share of life-insurance companies is less than 50%)
3. Security companies (confined to A share consignment-in, B share, H share and government and
company bonds consignment-in and transaction, the foreign-capital is less than one-third), security
investment fund management companies (the foreign-capital is less than 49%)
4. Insurance brokerage companies
5. Futures companies (Chinese should hold the majority of shares)
VIII. Real Estate Industry
1. Development of pieces of land (limited to equity joint ventures or contractual joint ventures)
2. Construction and operation of high-ranking hotels, villas, high-class office buildings and
international exhibition centers
3. Real estate transaction in second-grade market and medium and brokerage companies
IX. Leasing and Commercial Service Industry
1. Legal consulting
2. Market Research (limited to equity joint ventures or contractual joint ventures)
3. Status enquiry and grade service companies
X. Scientific Research and Technical Services Industries, Geological Prospecting
1. Mapping companies (Chinese partner shall hold the majority of shares)
2. Inspection, verification and attestation companies for imported and exported goods



                                                  63
3. Photography service (including trick photography like airphotograph, except maping aerial
photography, limited to equity joint ventures)
XI. Irrigation, Environment and Public Utilities Management
1.   Construction and management of fuel gas in big city, heating power and water supply and
     sewage net
XII. Education
1.   Common high school education mechanism
XIII. Public Health, Social Security and Social Welfare Industries
1.   Medical treatment establishments (limited to equity joint ventures or contractual joint
     ventures)
XIV. Art, Sports and Entertainment Industries
1. Production and publication of broadcasting and TV programs and film-making (limited to
contractual joint ventures)
2. Construction and operation of cinemas (Chinese partner shall hold the majority of shares)
3. Construction and operation of large theme park
4. Economic Institution to Perform (Chinese partner shall hold the majority of shares)
5. Brokering agency of stage performances
XV. Other industries restricted by the State or international treaties that China has
concluded or taken part in


Catalogue of Prohibited Foreign Investment Industries
I. Farming, Forestry, Animal Husbandry and Fishery Industries
1. Cultivation of China's rare and precious breeds (including tine genes in plants industry,
husbandry and aquatic products industry)
2. Production and development of genetically modified plants' seeds
3. Fishing in the sea area within the Government jurisdiction and in in-land water
II. Mining and Quarrying Industries
1. Exploring, mining and dressing of tungsten, molybdenum, tin, antimony, high-alumina clay,
fluorite
2. Exploring, mining and dressing of rare earth metal
3. Exploring, mining and dressing of radioactive mineral products
III. Manufacturing Industry
1. Beverage Industry
(1) Processing of green tea and special tea with China's traditional crafts (famous tea, dark tea,
etc.)
2. Medical and Pharmaceutical Products Industry
(1) Processing of traditional Chinese medicines that have been listed as the Regulations on
Conservation and Management of Wild Chinese Medicinal Material Resources and Rare and
Endangered Plants in China




                                                 64
(2) Application of preparing technique of traditional Chinese medicines in small pieces ready for
decoction, like steam, frying, moxibustion, calcining, and production of the products of secret
recipe of traditional Chinese patent medicines
3. Non-Ferrous Metal Smelting and Rolling Processing Industry
(1) Smelting and processing of radioactive mineral products
4. Special Equipment Manufacture Industry
(1) Manufacture of Weapons and Ammunition
5. Electric Machinery and Equipment Manufacture Industry
(1) Manufacture of open-lead-acid cells, mercury Button Type Silver Oxide Cells, paste
dioxide-zinc battery and nickel cadmium cells
6. Industry Products and Other Manufacturing Industries
(1) Ivory carving
(2) Tiger-hone processing
(3) Production of bodiless lacquerware
(4) Production of enamel products
(5) Production of Xuan-paper (rice paper) and ingot-shaped tablets of Chinese ink
(6) Production of carcinogenic, teratogenic, mutagenesis and persistent organic pollutant products
IV. Production and Supply of Power, Gas and Water
1. Construction and management of conventional coal-fired power of condensing steam plants
whose unit installed capacity is less than 300,000kw, within the small power grid in Xizang,
Xinjiang, Hainan province, and the coal-fired power of condensing-extraction steam plants with
dual use unit cogeneration is less than 100,000kw.
V. Communication and Transportation, Storage. Post and Telecommunication Services
1. Companies of air traffic control
2. Companies of postal services
VI. Leasing and Commercial Service Industry
1.   Social investigation
VII. Scientific Research and Technical Services Industries, Geological Prospecting
1. Development and application of human stem cells and gene diagnosis therapy technology
2. Geodetic survey, marine charting, mapping aerial photography, administrative region mapping,
relief map of map compilation and navigation electronic map compilation of common map
compilation
VIII. Irrigation, Environment and Public Utilities Management
1. Construction and management of nature reserve and international signify marshy
2. Development of resources about wild animals and plants be native to domestic protected by
nation
IX. Education
1. Institution of compulsory education and special education, like military, policeman, politics and
party school
X. Art, Sports and Entertainment Industries
1. News agencies


                                                 65
2. Business of publishing, producing, master issuing, and importing of books, newspaper and
periodical
3. Business of publishing, producing, master issuing and importing of audio and visual products
and electronic publications
4. Radio stations, TV stations, radio and TV transmission networks at various levels (transmission
stations, relaying stations, radio and TV satellites, satellite up-linking stations, satellite receiving
stations, microwave stations, monitoring stations, cable broadcasting and TV transmission
networks)
5. Companies of publishing and playing of broadcast and TV programs
6. Companies of films making, issuing, business
7. News website, network audiovisual service, on line service location, internet art management
8. Video screening companies
9. Construction and management of golf course
10. Gambling industry (including gambling turf)
11. Eroticism
XI. Other Industries
1.   Projects that endanger the safety and performance of military facilities
XII. Other Industries Restricted by the State or International Treaties that China has
Concluded or Taken Part in.

1. Ⅲ Catalogue of Superior Industries in Central West Part for Foreign Investment,
     .
   (approval by the State Council) Revised Edition 2008 Hunan Part



(National Development and Reform Commission, Ministry of Commerce Order No. 4)


1.       Lead, zinc intensive processing ( except for exploration, mining, smelting)
2.Bismuth compounds production(China as the largest shareholder)
3.Hormone medicine further development (except those restricted and prohibited in
      The "Industry Catalog for Foreign Investment" )
4.Packaging, decorating and printed
5.New dry-process cement manufacture with daily capacity of 4000 tons and above
6.Large-diameter steel pipe processing
7.Concrete Machinery: concrete pump, concrete pump truck, concrete fabric machine, concrete
      mixer truck; Hoisting Machinery: tower crane, construction lift, truck crane; road machinery:
      asphalt paver, pavement cold milling machine, roller (220 horsepower above), asphalt
      concrete mixing equipment, graders, heating machine; sanitation machinery: sweep the road
      cars, washing cars; Earthmoving Machinery: Rotary Drilling Rig, excavators (30 tons);
      hydraulic valve, hydraulic cylinder, gear and other engineering machinery and key parts and
      components development and manufacturing
8.Vane pump and water conservancy machinery manufacturing
9.Bi-metal high-speed sawing tools
10. New type of rubber machinery equipment manufacture
11. Value-added telecommunications business (subject to our country's commitments to the WTO)
12.Road passenger transport(China as the largest shareholder)
13.Vocational education institution (for cooperation)


                                                  66
14.Radio and television program production, film production (limited to cooperation)
15 . Urban gas supply, heat supply and water supply and drainage pipe network
construction (China as the largest shareholder in large and medium sized cities)
16.Tourism spot and scenic sport development and supported facilities, protection and operation

IV. Decisions of Hunan Provincial Party Committee and Provincial Government on
encouraging the development of West Hunan

I) Development scope of West Hunan: It covers Xiangxi Autonomous Prefecture, Huaihua City,
Zhangjiajie City, the six counties of Dongkou, Suining, Chengbu, Wugang, Xinning and Longhui
in the west part of Shaoyang City and Jianghua Autonomous County of Yongzhou City.
II) Foreign investors are encouraged to invest in the infrastructure construction and resource
development in agriculture & forestry, water conservancy, ecological environment,
communications, environmental protection and mineral products. Foreign investors are allowed to
invest in telecom, insurance, tourism and consultation according to the relevant regulations.
Foreign investors are supported to take part in the transformation and reorganization of
state-owned enterprises and other ownership enterprises. The preferential policies benefiting
development of the West, national autonomous counties and foreign investment shall be strictly
carried out.
III) Key industries for development
1. Hydraulic power: Foreign investors are encouraged to set up rural small hydraulic power
     projects. Projects with investment of below RMB 30 million or installed capacity of below
     5000KW shall be checked and approved by the city and county-level governments.
2. Mineral products: Development of such key mineral products as manganese, aluminum, lead,
     zinc, magnesium, barium, phosphorus and so on.
      (1) Prospecting and mining enterprises can apply for less payment of or exemption from fees
          of mining rights.
      (2) Mineral products processing enterprises: power production enterprises are encouraged to
          directly supply power to mineral products processing enterprises.
3. Processing of forest products: Enterprises and individuals are encouraged to invest in the
     construction of industrial raw material forestry bases.
4. Processing of agricultural products: Farming households with actual strength are encouraged
     to quicken the step in centralizing such key production elements as land to the production
     factors and big planting & breeding households in the way of share cooperation, leasing and
     contracting.
5. Industry of traditional Chinese medicine
      (1) Home traditional Chinese medicine enterprises and medicine research and development
          institutes are encouraged to develop traditional Chinese medicine resources in West
          Hunan, laying stress on setting up a batch of standard planting bases for such traditional
          Chinese medicine as yellow ginger, eucommia, honeysuckle, cordate houttuynia,
          Artemisia apiacea and gallnut.
      (2) Domestic and overseas pharmaceutical enterprises are encouraged to set up factories in
          West Hunan. We shall pay much support to the enterprises that produce standard
          traditional Chinese medicine extractive and functional food and do better in the direction
          and service in the construction of medicine production quality management standards.
      (3) We shall encourage the development of new medicine, all cost for technical development
          shall be deducted in the tax amount. The medicine supervision department shall do well
          in the direction and service work for the developed new medicine. For the enterprise who
          has more than three kinds of new medicine realize industrialization in West Hunan or for
          the province-level new product which is developed by utilizing local traditional Chinese
          medicine of West Hunan, the government shall arrange guiding fund at a certain
          proportion and such products shall be given priority to be listed into the catalogue of
          medicine for medical treatment insurance of Hunan.
6. Tourism: Investors are encouraged to develop and construct tourist spots strictly according to
     the general plan approved by the government.



                                                67
                  Investment Forms (direct utilization of foreign investment)

Ⅰ Sino-Foreign Joint Ventures
Ⅱ Sino-Foreign Jointly Operated Enterprise
ⅢWholly Foreign-owned
IV Foreign-invested partnership enterprise
V. Processing Trade
VI.BOT Forms
VII.Foreign Funded Financial Institutions
VIII.Investment Company
IX .Holdings Limited Company Invested by Foreign Investors.
X.International Lease
XI.Other Investment Forms in the Light of State Laws and Regulations


ⅠSino-Foreign Joint Ventures
Sino-foreign joint ventures are limited partnership companies, and jointly invested in Chinese
territory by foreign companies and Chinese partners. Liabilities of each partner of a joint venture
are limited to the amount of capital it has invested. Partners may make their investment with
money, buildings, machinery equipment, the right to use the workshop site, industrial properly,
patent and know-how, calculated in a rate of capital contribution to the joint venture. The
investment by foreign partners shall not be less than 25% of the total registered capital. Board of
directors of the joint venture is the supreme organ of power.

ⅡSino-Foreign Jointly Operated Enterprise
It is a contract type joint venture set up by and between foreign companies, enterprises and other
economic entities or individuals and Chinese partners with joint investment and by providing
cooperation conditions. The investment of foreign and Chinese partners, generally speaking,
should not be converted to the capital contribution with the profit not distributed based on the ratio
of their contribution. The rights, product share, risk and loss share, operation ways and assets
ownership after termination shall be prescribed in the form of contract signed by the parties. The

                                                 68
enterprise, generally, shall be fully or partially funded by foreign partners with cash, and the
Chinese partners may provide land, factory buildings, equipment and facilities or a small amount
of fund. As the foreign partners may in advance recover its investment and make profits during the
term of cooperation being approved, the total assets of the enterprise will go to the Chinese partner
after the contract cooperation term expires.

ⅢWholly Foreign-owned
 The enterprises are wholly foreign-owned, which means that foreign companies, enterprises, other
economic entities or individuals establish 100% foreign-owned enterprises in China in accordance
with Chinese Laws

IV. Foreign-invested Partnership Enterprise


It refers to the partnership enterprise established by more than two foreign enterprises
or individuals, or by China’s natural person and legal person with foreign enterprises
or individuals within China.

V. Processing Trade

Processing trade means an operation mode, i.e., all or partial bonded imported raw and accessory
materials, parts, elements and apparatus, packing materials are manufactured to finished products
for re-export through processing, manufacturing or assembly by enterprises in Chinese territory.

Processing trade includes processing with supplied materials and processing with imported
materials. Processing with supplied materials refers to the imported materials are supplied by
foreign partners, not paying foreign exchange for the import and not compensating with
processing fees, but the finished products are sold by foreign partners and the enterprises earn the
processing fees. Processing with imported materials refers to the imported materials are paid by
the operated enterprises with foreign exchange and the finished products are exported by the
operated enterprises.


VI.BOT Forms
BOT means Build-Operate-Transfer. The typical BOT form is that the Project Contract is signed
by and between government and private-owner Project Company (as foreign investment form in
China), then the Project is funded and constructed by the Project Company. During the contract
period, the Project Company may own, operate and maintain this project and obtain reasonable
profit from the use or service fee as it is collected. Upon the expiratory of contract, the ownership
of the project built shall be transferred to the government. BOT form is mainly used for toll
highways, power plants, railways, sewage facilities, urban subways and other infrastructure
projects.

VII.Foreign Funded Financial Institutions
Foreign Funded Financial Institutions refer to the wholly foreign owned financial institutions and
Sino-foreign joint financial institutions and foreign financial institution’s branches established in
China with Chinese legal person status. Most of foreign financial institutions adopt the forms by
setting up branches in China (such as bank branches, insurance company branches) without
Chinese legal person status. The foreign institution in application for setting up branches in China
shall possess the specified assets amount, under the strict financial control of the country where


                                                 69
the headquarters of the financial institution is located, and is requested to establish agency in
China for more than 2 years. The application for establishment of foreign funded institution shall
be based on relevant laws and submitted to State financial authorities for approval.

VIII.Investment Company
The investment company refers to the company directly involved in the investment by means of
wholly funded form or joint venture with Chinese partners. It is a limited liability company. The
application for establishment of investment company shall accord with following terms and
conditions: 1. The foreign investor’s total assets shall not be less than USD 400 million at previous
year before the application, and the investor has established enterprises in China with actual
contributed register capital amounted to more than USD 10 million and more than 3 project
proposals for investment to be approved, or the investor has set up more than 10 foreign funded
enterprises engaged in production or infrastructure construction with its actual contributed register
capital exceeding USD 30 million; 2. For the investment company established in joint venture
form, the Chinese partner’s total assets shall not be less than RMB 100 million; 3. The registered
capital of the investment company shall not be less than USD 30 million.


IX .Holdings Limited Company Invested by Foreign Investors.

It refers to the company’s total assets are consist of equal amount shares. The liabilities of
shareholders are limited to the shares amount they have offered to buy, but the company shall bear
liabilities with all assets of the company. The stock of the company shall be jointly held by
Sino-foreign shareholders. Foreign shareholders may purchased and hold the shares generally not
less than 10% of the registered capital of a corporation.

X.International Lease
It is a cooperation form that the lessor may lease machine, equipment and devices for a long term
to the renter after the lease contract signed, and the renter may use the rented equipment and
devices for production and operation activity. During the lease period, the lessor has the rights of
ownership to the leased devices, and the renter owns the use rights to the rented devices and shall
pay lease fee to the lessor. Upon expiration of the lease contract, the rented devices can be
disposed through the parties’ agreement. The lease business mainly involves 2 ways s, i.e.
financial lease and lease for business operation.

XI.Other Investment Forms in the Light of State Laws and Regulations




Part Three     Investment Procedures and Directions


I. Application Procedures for Foreign-funded Projects

II. Instructions for Applicants on Establishing Foreign Funded Enterprises


III. Procedures for Registration of Foreign-Funded Enterprises

                                                 70
IV. Title Transfer

V. Social and Labor Insurance in Hunan


VI. Instructions on Entry and Exit Administration


VII. Guide on Handling Processing Trade in Customs




I. Application Procedures for Foreign-funded Projects
1. Examination and approval procedures for establishing Chinese-foreign equity/contractual

Documents needed                     Working procedures                   Authorities

  Application report related to         Examination opinions of
                                     planning, land, environmental    Relevant competent department
 planning, land, environmental
                                       protection and state assets        under the government
   protection and state assets


    Project application report           Project verification         Government departments in charge of

                                                                                  investment



 Application     for    enterprise
                                                    71
                                       Checking and approving        Administration of Industry & Commerce

 name                                          the name



    Status report of all parties
2. Examination and approval procedures for establishing wholly foreign-owned enterprise.

Documents Needed                       Working Procedure                    Authorities

 Application report for               Project verification             Government Departments in
         project                                                          Charge of Investment



        Application

                                      Examining Articles of              Department of Commerce
   The report for project
                                           Association
        application


 Articles of association
                                   Applying for code of national      Provincial/municipal Technical
 of the company                                   72
                                     institutional framework                Supervision Bureau


   Copies of business
 license or ID card and
        passport
3. Examination and approval procedures for processing/assembling and compensation trade



    Documents Needed                   Working Procedure              Authorities

  Application                                                        Department of Commerce
                                        Examination      of     the
  Contract
  Approval certificate                 application and approval
  Capital certificate
  Business license                     of contract
  Certificate of right to Import
    & export                                     Registration         Tax Bureau, Customs
  Application form for approval                                      administration     and
                                            73                        Administration     for
    of processing trade
                                                                      Industry and Commerce
  Filling     list   of   exporting
    finished Products and relevant
    import
(In the table the approval authority for Opening Activity Account is changed to Provincial Branch,
Bank of China. The Provincial Branch, Bank of China is changed to bank designated for foreign
exchange business)


Remarks:
(1). The following items shall be included in the application:
(a) Names of the contracted parties, number, date and term of the contract, (b) name, specification,
model and quantity of the product(s), total value of import, export. In addition, for contractual
processing and assembling, the unit price and the total amount of processing/assembling charges
shall be included


(2). Note:


"★" Document raised by foreign-owned enterprise
"○" Document raised by domestic enterprises
"△" Receive the document download from Hunan Provincial Department of Commerce
(www.ec.com.cn)


4. Procedures on applying for the establishment of permanent representative agency of
foreign enterprise

Foreign traders, manufacturers, forwarding agencies and other economic entity applying for
setting up permanent representative agency in Hunan may register in administration bureau for
industry and commerce, then go to the local public security organ to go through formalities for
staying, Register in taxation department and open account in related bank.

                                                 74
II. Instructions for Applicants on Establishing Foreign Funded Enterprises


I) Authority Power Limits in Examination and Approval


In accordance with the regulations of authority power limits in examination and approval
concerning foreign funded project and enterprise promulgated by the State Council, relevant
national ministries and provincial government,foreign enterprise shall be examined and approved
by different-level authorities according to the scale and line of business.




a. Foreign funded projects and enterprises examined and approved by the National Development
    and Reform Commission and Ministry of Commerce
    1). Projects of the encouraged category and the permitted category in the Guideline of
    Industries for Foreign Investment with the total investment (including increased investment)
    not less than 300 million U.S. dollars as well as the projects in limited category with total
    investment not less than 50 million U.S. dollars.


    2). Projects shall be examined and approved by Ministry of Commerce based on state related
    laws and regulations (such as foreign invested telecommunications, civil aviation, travel
    agencies, oil and gas resources, direct marketing, finance, asset management, freight
    transportation, accounting, performance brokerage, financial information services etc).


    3). Projects involve in import and export quota and license management product.


b. Foreign funded projects and enterprises examined and approved by provincial investment and
  commerce departments


  1). Projects of the encouraged and permitted category, with total investment between USD 100
     million (including USD 100 million) and USD 300 million (excluding USD 300 million);
     Projects in limited category with total investment less than USD 50 million (excluding USD
     50 million).


    2). Projects shall be examined and approved by Provincial Department of Commerce based on
    state related laws and regulations or within the power limits authorized (entrusted) by
    Ministry of Commerce(such as international forwarding enterprise for mail express, partial
    service industry for foreign investment).


c. Foreign funded project examined and approved by municipality and prefecture and
administraiton committee of the state level zones, such as administraiton committee of Changsha
Hi-tech Industry Development Zone, Changsha Economic and Technical Development Zone,
Changsha Hexi Leading District, administraiton committee of Zhuzhou Hig-tech Industry
Development Zone.


                                                75
Projects of the encouraged category and the permitted category in the Guideline of Industries for
Foreign Investment with total investment less than USD 100 million (excluding USD 100 million)


The examination and approval rights of the Administration Committee of Changsha Economic and
technical Development Zone are treated as that of provincial commercial department. may
examine and approve the projects authorized by Ministry of Commerce (such as international
forwarding enterprise for mail express, partial commercial sectors for foreign investment).


d. Foreign funded project examined and approved by the administration committee of
county-(municipal-, or district-) level development zones and other key provincial-level
development zones under the jurisdiction of Changsha, Zhuzhou, Xiangtan and Chenzhou

Projects of the encouraged and permitted category with total investment less than USD 30 million


e. Foreign funded project examined and approved by the administration committee of other
county-(municipal-, or district-)level development zones

Projects of the encouraged and permitted category with total investment less than USD 10 million


Ⅱ Registered Capital and Total Investment
 )


The Proportion of the registered capital to the total investment shall be as follows:


Investment      amount        of   The proportion of registered      The    minimum       amount   of

joint-venture        enterprises   capital                           registered    capital    (10,000

( 10,000 USD)                                                        USD)

       300 or below 300                      7/10(70%)

      From 300 to 1000                       1/2 (50%)                             >210

      From 1000 to 3000                      2/5 (40%)                             >500

         Above 3000                          1/3 (33%)                            >1200


The proportions of the registered capital to the total investment stipulated above shall be
applicable to all equity or contractual joint ventures and wholly foreign-owned enterprise.
Exceptions shall be made only upon approval by the Ministry of Commerce together with the
State General Administration for Industry and Commerce.


Real estate enterprises with a total investment of more than 10 million U.S. dollars, the proportion
of registered capital should be not less than 50%.


Ⅲ Forms of Capital Contribution
 )


                                                  76
1. Convertible foreign currencies;
2. Foreign investors' profits in RMB from the equity/contractual joint venture or from the wholly
foreign funded enterprise in China;
3. Equipment and machinery, raw materials and other goods and materials;
4. Land which has been granted the legitimate right to use and developed in accordance with the
regulations for the development and operation of the whole areas of land by foreign investors, and
attachments and buildings belonging to it;
5. Industrial property rights and proprietary technology


III. Procedures for Registration of Foreign-Funded Enterprises


I) Business Registration


1. Registration of foreign funded enterprise


Business registration of a foreign-funded enterprise involves two steps: one is the business name
registration before the contract and the articles of association are approved, the other is the
business operation registration after the contract and the articles of association are approved.


A. For business name registration, an enterprise shall submit the following documents:


     a) Pre-examination and approval application of the name of the enterprise with the
         signature of all the investors. Application for registration signed by the person
         responsible for its establishment shall include the name and address of the corporation to
         be established, its business scope, registered capital/ capitalized capital, name of investor
         and investment cost;
     b) Certificate of the representative/ deputy appointed by the investors;
     c) Certificates for qualifications of the representative/deputy;
     d) Certificates for qualification of all investors.
     e) The certificates include other documents required by Administration Bureau for Industry
         and Commerce


B. For business operation registration, an enterprise shall submit the following documents within
30 days after received the approval;

     a) Application for business licenses of foreign investment with the signature of legal
        representative;
     b) One copy of approval document of the examination and approval organ;
     c) The contract and articles of association;
     d) Notice on pre-examination and approval of the name of the enterprise;
     e) Investors’ qualification certificate or natural person ID certificate. The documents refer
        to:



                                                  77
          Chinese investors shall provide the business license/legal representative registration
          certificate of the social undertaking institution/ legal representative registration
          certificate of the social organization/certificate of private-owned non-enterprise
          institution copied and stamped as the qualification certificate; foreign investors’
          qualification certificate shall be notarized by the Public Notary of the investor-resided
          country (region) and verified by Chinese Embassy in the investor-resided country
          (region). In case the investor-resided country has no diplomatic relations with China, the
          certificates shall be notarized by the Public Notary of the third country that has
          diplomatic relations with China, then verified by Chinese embassy in the third country.
          The investors from Hong Kong, Macao and Taiwan shall provide the qualification and
          ID certificates notarized in these regions.

     f)   Copies of position and ID certificates of the directors, supervisors and managers;
     g)   Copies of appointment and ID certificates of the legal representative;
     h)   Residence location certificate;
     i)   For the projects with business scope governed in the state laws and administration
          decrees as well as the decisions of the State Council, which shall be approved before the
          registration, the investors shall submit related approval document or license copies or
          permission certificate;
     j)   The legal document shall be enclosed with Power of Attorney;

     k) Other related documents and certificates.

          Above mentioned document shall be provided with one original copy except for
          otherwise stated.

In case above mentioned documents are in foreign language, they shall be translated into Chinese
stamped by Translation Company.


C. The branch and agency establishment registration of foreign funded enterprise


The registered foreign funded enterprise for establishing branches and agencies shall submit
following documents and certificates:


a) Application for the branch and agency establishment registration signed by legal representative
of the parent enterprise;
b) Articles of Association of the Company signed by legal representative of the parent enterprise;
c) The Appointment and ID Certificate of the person in charge of the branch provided by the
parent enterprise;
d) Business license and duplicate of the parent enterprise (stamped by the parent enterprise)
e) Certificate of housing and site use for business operation;


f) For the projects with business scope governed under the state laws and administration decrees
as well as the decisions of the State Council, which shall be approved before the registration, the
investors shall submit related approval document or license copies or permission certificate;

g) Other related documents and certificates.


2. Registration Procedures for Foreign –Invested Partnership Enterprise

                                                 78
The representative appointed by all partners or proxy jiontly authorized by all parners derectly
apply establishment registration.
The following documents shall be submitted:
     a) Application for registration signed by the partners;
     b) Agreement of partnership signed by all partners;
     c) the subject qualification certificate or the natural person's identification certificate;
     d) the certificate of business site;
     e) power of attorney of appointing representative and jiontly authoring proxy signed by all
     partners;
     f) all partners ’confirmation to all partners’subscribed and paid-in capital;
     g) Instruction of complying with foreign-invested industry policy signed by all partners;
     h) credit certificate issued by finacial institution who has business transaction with foreign
     partners;
     i) Power of Attorney for Serving Legal Documents (1 original) signed between the Chinese
     recipient of legal documents and the investor from abroad;
     j) the other documents required by laws.



3. Registration for the establishment of permanent representative agency of enterprises from
foreign countries and Taiwan, Hong Kong, Macao Regions

Enterprises from foreign countries and Taiwan, Hong Kong, Macao Regions and other economic
entity applying for setting up permanent representative agency in Hunan may register in Hunan
Provincial Administration Bureau for Industry and Commerce, with following documents and
certificates submitted:.

a). Application for the agency registration signed by chairman of the board or managing director,
with the content including foreign enterprise name, permanent agency name, business scope,
duration, address, chief representative and staff;


b). Certificate for lawful operation provided by authority in the enterprise located country or
region;


c). Enterprise status certificate;


d). Appointment document for the chief representative, deputy and employees;


e). ID card copies and 2 photos of the representative, deputy and employees;


f). Certificate of office address.


4. Production and operation registration of foreign enterprise in Chinese territory


                                                     79
After the production and operation project of foreign enterprise in Chinese territory approved by
the examination and approval authority, the foreign enterprise shall register in administration
bureau for industry and commerce within 30 days after the approval, with following documents
and certificates submitted;


a). Application signed by the chairman of the board or managing director;


b). Approval document or certificate provided by the examination and approval authority;


c). Contract for engaging in the production activity;


d). Certificate for lawful business operation provided by authority in the enterprise located country
and region;


e). Certificate of foreign enterprise financial status;


f). Power of attorney, resume and ID certificate for the person in charge of the project in China
designated by the chairman of managing director of foreign enterprise;


g). Other related documents.


5. Registration modification, cancellation and annual examination of foreign funded
enterprise


The main registration issues modification of foreign funded enterprise and its branches and
agencies shall have modification application submitted to the original registration authority for
approval.


The termination and expiry of foreign funded enterprise, approval certificate invalidity, contract
termination approved by examination and approval authority, shall have application submitted to
the original registration authority for cancellation.


Foreign-invested enterprise and its branches should receive annual exam between March 1st and
June 30th every year according to the requirement of the company’s registration organ.


6. Department of Industry and Commerce's Preferential Policies to Foreign-invested Enterprise


a. About the subject qualification examination of investor. Foreign investors who have submitted
notarized and attested subject qualification certificate when they established foreign-invested
enterprises, for establishing foreign-invested enterprise in Hunan within one year, only need
submit first-establishment certificate issued by registration organs and copies affixed a special seal


                                                   80
for archive inquiry and needn’t submit original certificate of subject qualification.


b. About approval of name of foreign-invested enterprise. Foreign-invested enterprise whose name
use the word of “China” and doesn't contain name of administrative division can apply to
Administrative Bureau for Industry and Commerce of Hunan Province for name approval, change.
All kinds of foreign-invested enterprises approved by the related ministries of the State Council
can register in Administrative Bureau for Industry and Commerce of Hunan Province through the
form of State Administration of Industry and Commerce individual case authorization


c. About name registration of foreign-invested enterprise. Foreign-invested enterprise's name can
carry such words as "Hunan” or Hunan Province” provided that its registration capital reach the
minimum amount stipulated in the Company Law of People’s Republic of China. Enterprise
whose registered capital reaches RMB 50 million, and whoes nature of corporate economic
activities belong to the national economy more than 3 industry categories shall not use natinal
economy industry category expressions in its name.


d. About establishing enterprise group by foreign –invested enterprise. Foreign –invested
enterprise establishing enterprise group is couraged, and enterprise can establish enterprise group
provided that its parent company group's registered capital reaching RMB 30 million, with more
than 3 subsidiary companies and the registered capital sum of parent company and subsidiary
companies more than RMB 50 million.


e. About approval registration authority limit of foreign-invested enterprise. Foreign-invested
enterprise in Changsha-Zhuzhou-Xiangtan city group can handle registration and change
procedures in county-level industry commence administrative bureau (high-tec development zone
and economy technical development zone’s industry and commence administrative bureau’s
branch bureau).


f.About foreign investor establishing advertising enterprise in Changsha-Zhuzhou-Xiangtan city
group. Foreign enterprise, provided that it has been established and operated for three years and
mainly engaged in advertisment business can set up wholly-owned advertising enterprise in
accordance of laws; Foreign enterprise, provided that it has been established and operated for two
years and engaged in advertisment business and had advertising performance can set up
sino-foreign jiont advertising enterprise in accordance of the related regulations; Foreign investor
also can embark in sino-foreign jiont advertising venture through buying parts of shares from
adertising enterprise in China.




                                                  81
II) Tax Registration


1. Foreign-funded enterprise with its branches or a foreign enterprise with its permanent
representative office should register in the local tax authorities within 30 days after it obtains the
business license. For tax registration, the foreign-funded enterprise or the foreign enterprise shall
submit the business license, the national unified code certificate, the copies of contract and articles
of association and the legal person ID card or passport. Then fill in two copies of the tax
registration form (obtained in the taxation department or downloaded from Hunan state taxation
webpage) and proceed to the taxation department to register. The tax authorities will issue to the
enterprise the certificate of tax registration after they have verified these documents.


2. In case a foreign-funded enterprise and its branches or a foreign enterprise and its permanent
office change its tax registration during the production and operation, it, with necessary
documents, shall proceed to the tax authorities for making changes or cancellation in the tax
registration in 30 days after the industrial and commercial administration has handled formality
change or before it applies for taxation cancellation to the industrial and commercial
administration.


III) Fiscal Registration


A foreign-funded enterprise should register in the local department of finance within 30 days after
it obtains the business license by presenting following documents:


a) Approval certificate;
b) Business license;
c) the investment-amount certificate;
d) Contract and articles of association of the enterprise (duplicates);
e) Financial and accounting system of the enterprise adopted by the board of directors;
f) Effective qualification certificates of the enterprise's accounting personnel;

The department of finance will issue to the enterprise a fiscal registration certificate and its
duplicates after the procedures have been duly completed.


The foreign-funded enterprise should submit their accounting statements on scheduled time to the
financial department, and subject themselves to the supervision and management of the financial
department.


If it divides, unites or sets a branch, the enterprise is required to register at the local administration
of industry and commerce; and in 30 days, it still should submit to the local financial authority its
registration documents, duplicates and copies to go through corresponding financial procedures.
After dissolution and liquidation, it is required to submit to the local financial department its
liquidation report, its original auditing report, duplicate and copy made by a Chinese CPA to
cancel its fiscal registration, prior to cancellation of its business registration.



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IV). Registration system of deliver and receiver for Imp. & Exp. cargoes


Approving Object: The enterprise applies for Registration of deliver and receiver for Imp.& Exp.
cargoes


Approving Authority: Enterprise Administration Section of Changsha Customs Investigation
            Division (Add.: 678 Dongerhuan Rd., Yuhua District, Changsha City, Tel.:
            0731-84781354)


Procedures for Examination and Approval:


1. Submit the following information:


 (I) Business license of the enterprise


 (II) The Foreign Trade Operator Record Registration Form issued by the commerce
administration authorities;


 (III) Articles of Association of the enterprise


 (IV) The copy of the duplicate of the Tax Registration Certificate (National Tax);


 (V) The copy of the Account Opening Certificate issued by the bank;


 (VI) The copy of the duplicate of the Organizational Code Certificate;


 (VII) Foreign Funded Enterprise Approval Certificate of P.R. China


 (VIII) Other certification documents needed for registration.


(IX)The duplicate of the legal person’s ID card (new version, both sides duplicated).The
original should be checked.
(X)The duplicate of the responsible person’s ID card (new version, both sides duplicated).The
original should be checked.
(XI)The authorization letter provided by the enterprise, if the responsible person is not the legal
  person. Such a passage should be included in the letter as “_____ is authorized to apply for
  registration in the Customs House”.
All the documents involved in the Registration Notice of deliver and receiver for Imp.& Exp.
Cargoes should be submitted in terms of duplicate. The original, thought not submitted, should be
checked. About the above documents, if only their copies are required, their original and
duplicate shall be submitted to customs for inspection.

                                                   83
2. The enterprise self-engraves a customs clearance special-purpose stamp


The content and requirement of customs clearance special-purpose stamp: the stamp should be in
the form of oval with a length of 50MM and a width of 36MM. The stamp is printed with the full
name of enterprise on the up side and the customs clearance special-purpose stamp on the down
side from left to right.


3. Fill the following forms


     1. The Registration Form of the Conditions about the Enterprise;
     2. The Registration Form of the Conditions about the Enterprise Management Members
     3. Custom Registration Enterprise Information Inspection Form


Time Limit for Examination and Approval: If the Customs consider the enterprise applying for
registration meets the conditions after all the above-mentioned procedures have been handled and
the customs preliminarily examined the information, the customs will finish the registration
procedures within two working days and issue the Certificate of the Customs Registration of
deliver and receiver for Imp. & Exp. cargoes.


(V) “Foreign Processing and Production Enterprise” Registration Examination and
Approval System
Approving Object: The enterprise applies for dealing with the foreign processing and production
enterprise registration


Approving Authority: Enterprise Administration Section of Changsha Customs Investigation
             Division (Add.: 678 Dongerhuan Rd., Yuhua District, Changsha City, Tel.:
             0731-84781354)


Basis for Examination and Approval: the Customs Law of the People’s Republic of China and
related laws and regulations


Procedures for Examination and Approval:


(I). Submit the following information:
      1. The original and the reprinting copy of the processing and production enterprise’s
          industrial and commercial business license;
      2. The original and the reprinting copy of the Processing Trade Business Ratification
          Certificate issued by the directing department of foreign trade and economy to approve
          an enterprise doing the processing business;
      3. The original and the reprinting copy of the Productive Capacity Certificate of the


                                                84
                   Processing Trade Enterprise issued by the directing department of foreign trade and
                   economy;
               4. The original and the reprinting copy of the Tax Registration Certificate (National Tax) of
                   the processing and production enterprise;
               5. The original and the reprinting copy of the Organizational Code Certificate of the People’s
                   Republic of China of the processing and production enterprise;
               6. The original and the reprinting copy of the legal representative’s ID card, a two-inch
                   bareheaded photo and his/her telephone number for contact.
               The documents and certificates shall be provided with the original and the copies for
                   Customs check.


         (II). Fill the following forms:


             1. The Registration Form of the Conditions about the Enterprise;


             2. The Registration Form of the Conditions about the Enterprise Management Members.


             3. Custom Registration Enterprise Information Inspection Form




         Supervision and Management Measures: If an enterprise wants to change its original name,
                      legal representative or other contents which have been registered in the customs, or
                      wants to cancel some registered contents, the enterprise shall deal with related
                      produces about change or cancellation in time.


         Time Limit for Examination and Approval: If all the above-mentioned procedures have been
         handled and the submitted certificates and information have no mistake or omission, the customs
         will inspect and handle the foreign processing and production enterprise’s registration procedure
         within two working days.



(VI) “Alteration in the Registration Certificate of the deliver and receiver for Imp.& Exp. cargoes
         Approving Object: The enterprise which applies for handling the alternation in the Registration
         Certificate of the deliver and receiver for Imp.& Exp. cargoes


         Approving Authority: Enterprise Administration Section of Changsha Customs Investigation
                      Division (Add.: 678 Dongerhuan Rd., Yuhua District, Changsha City, Tel.:
                      0731-84781354)


         Basis for Examination and Approval: the Customs Law of the People’s Republic of China and

                                                          85
related laws and regulations


Procedures for Examination and Approval:


The application unit puts forward the application for alternation by holding the following
documents:
   1.     Go to the Changsha Customs, and then obtain and fill in the Alternation Registration
          Application Form of the Customs deliver and receiver for Imp.& Exp. cargoest, the
          Registration Form of the Conditions about the Enterprise and the Registration Form of
          the Conditions about the Enterprise Management Members;
   2.     Return the original Registration Certificate of the Customs Clearance Self-handling
          Unit;
   3.     Submit corresponding documents according to the alternation in contents (one or several
          kinds of the following documents):
        (1)       The original and the reprinting copy of the enterprise legal person’s business
                     license after alternation;
        (2) Original document (duplicate 2) of the Foreign-invested Enterprise Ratification
              Certificate of the P.R. China or the original and the reprinting copy of the Foreign
              Trade Operator Record Registration Form after alternation;
        (3)The original copy and the reprinting copy of the original Tax Registration Certificate
              (National Tax) after alternation;
        (4)The original copy and the reprinting copy of the original the Organizational Code
              Certificate of the People’s Republic of China after alternation;
        (5)The contract and the articles of association after alternation;
        (6) Bank account certificate
        (7)The original and the reprinting copy of the official, written reply about the altered
              contents given by the competent governmental authority (submitted by the
              foreign-invested enterprise merely);
        (8)Other related information;
4. Alteration in the legal person
    The
(1) duplicate of the legal person’s ID card(new version, both sides duplicated).The original
should be checked.
(2)The duplicate of the responsible person’s ID card (new version, both sides duplicated).The
original should be checked.
(3)The authorization letter provided by the enterprise, if the responsible person is not the legal
person. Such a passage should be included in the letter as “_____ is authorized to apply for
registration in the Customs House”.
(4)All the documents involved in the Alteration Notice of Registration of deliver and receiver


                                                  86
         for Imp.& Exp. Cargoes should be submitted in terms of duplicate. The original, thought not
         submitted, should be checked.




         5. Alteration in items except for the legal person
         (1)The duplicate of the responsible person’s ID card (new version, both sides duplicated).The
         original should be checked.
         (2)The authorization letter provided by the enterprise, if the responsible person is not the legal
         person. Such a passage should be included in the letter as “_____ is authorized to apply for
         registration in the Customs House”.
         (3)All the documents involved in the Alteration Notice of Registration of deliver and receiver
         for Imp.& Exp. Cargoes should be submitted in terms of duplicate. The original, thought not
         submitted, should be checked.



         6. In case of the alternation in the enterprise’s name, the enterprise needs to submit the name
         alternation confirmation certificate issued by the industrial and commercial administration;


         7. In case of the alternation in the enterprise’s name or nature, the enterprise needs to give back the
         original customs clearance special-purpose stamp, and self-engraves a new round customs
         clearance special-purpose stamp. After the customs inspects the stamp, the stamp die shall be left
         in the customs for further reference.


         8. In case of the alternation in the bank account number, the enterprise needs to submit the account
         opening certificate with the current account number issued by the bank;


         Time Limit for Examination and Approval: If all the above-mentioned procedures have been
         handled and the submitted certificates and information have no mistake or omission, the customs
         will handle the alternation procedure and issue the certificate within one working day.


(VII) “Registration Certificate of the deliver and receiver for Imp.& Exp. cargoes” Cancellation
          Examination and Approval System
         Approving Object: The enterprise applies for handling the Registration Certificate of the deliver
                      and receiver for Imp.& Exp. cargoes


         Approving Authority: Enterprise Administration Section of Changsha Customs Investigation
                      Division (Add.: 678 Dongerhuan Rd., Yuhua District, Changsha City, Tel.:
                      0731-84781354)


         Basis for Examination and Approval: The Customs Law of the People’s Republic of China and

                                                              87
related laws and regulations


Procedures for Examination and Approval:


    1. The enterprise which meets the following terms and conditions can apply for handling the
       cancellation procedure:
        (1)        The Sino-foreign joint venture, the cooperative business or the exclusively
                   foreign-owned enterprise in China has reached the time limit of operation;
        (2)        The enterprise of which the industrial and commercial administration has
                   ratified the cancellation;
        (3)        The enterprise of which the foreign trade and economic administration
                   department has ratified canceling or withdrawing the managerial authority of
                   import and export;
        (4)        Other enterprises which need to deal with the cancellation of the Registration
                   Certificate of the Customs Clearance Self-handling Unit.
    2. Submit the following information:
        (1)The written application of the enterprise;
        (2)The written, official approval document issued by the industrial and commercial
                administration department or the foreign trade and economic administration
                department;
         (3) “Examination and Approval Form of the Registration Certificate of the Customs
               Clearance Self-handling Unit Cancellation Application” (Firstly the applicant
               receives the form at the customs clearance registry window, and then goes to the
               tax exemptions and reductions department, the foreign business person’s self-used
               articles administration department and the bonded department for ideas signing.
               Lastly, the applicant submits the form to the administrative department of the
               enterprise.);
        (4)The original copy of the Registration Certificate of the Customs Clearance
                Self-handling Unit;
        (5)The customs clearance special-purpose stamp;
            The
         (6) Customs Declarant’s Qualification Certificate of the customs declarant with the
                    enterprise (the enterprise without the customs declarant is exempt from
                    submission of such a certificate);
         (7)Other information needed by the customs.


Time Limit for Examination and Approval: If all the above-mentioned procedures have been
handled and the submitted certificates and information have no mistake or omission, the customs



                                                88
will handle the cancellation procedure within one working day. The file about this enterprise will
be eliminated in the database.


(VIII). Handling of Tax-exemption Procedures for Foreign-invested Projects:
1. Basis:
  Shujianyi Document No. (1992) 1099 and Shushui Document No. (1997) 1062 and General
  Administration of Customs Document No. (2008) 103


2. Registration application


     In application for tax-exemption registration, foreign-funded enterprises (Sino-foreign equity
     joint ventures, Sino-foreign contractual joint venture and wholly foreign-funded enterprises)
     should provide to the customs the following documents:
     1. Business license (duplicate)
     2. Permit (duplicate)
     3. Enterprise contract (Exemption is allowed for wholly foreign-funded enterprises.)
     4. Articles of enterprise and its official approval (duplicate)
     5. The Approval Letter (original) should be submitted if the enterprise was set up after
            January 1st 1998.
     6. The filled-in Application for Registration of Tax-Collection and Tax-Exemption Project
            that is standard and effective. (Stamped by the enterprise)
     7. Financial status report (The customs checks the original and reserves the duplicate.)
     8. Other documents demanded by the customs
3. Tax-exemption application:
     In application for tax exemption, the enterprise that has been approved to register by the
     customs should provide to the customs the following documents:
     1. Examination and approval form for imported materials;
     2. The filled-in Application for Tax-Collection and Tax-Exemption for Imported Goods that is
            standard and effective. (Stamped by the enterprise)
     3. Three goods-ordering contracts or invoices (duplicate)
     4. Other documents demanded by the customs


(IX). Foreign Exchange Registration


1. The foreign-funded enterprise (except the real estate enterprise) is required to submit the
following documents:
(1). Foreign Exchange Registration Application Form for the Foreign-Funded Enterprises;
(2). Establishment-approval documents and original approval certificate issued by the supervising
department
(3). Approved enterprise Contract and Articles of Association (except the solely foreign-owned
enterprises);
(4). Photocopy of Business License; Non-legal-person Sino-foreign cooperative enterprise shall

                                                   89
submit the original of business license;
(5). Code Certificate of the organizer;
(6). The Chinese partner, in case of a domestic institution, offers its code certificate and the
    duplicate of its business license; in case of a natural person, offers his ID card. The foreign
    partner, in case of an individual, offers his valid identity card; in case of an institution, offers
    its registration document;
(7). Supplementary documents.

2. The foreign-funded real estate enterprise is required to submit the following document:
(1). Foreign Exchange Registration Application Form for the Foreign-Funded Enterprises and a
   commitment letter;
(2). Photocopy of the 1-year-valid Business License; Non-legal-person Sino-foreign cooperative
enterprise shall submit the original of business license;
(3). 1-year-valid establishment-approval documents and original approval certificate issued by the
supervising department
(4). Approved enterprise Contract and Articles of Association (except the solely foreign-owned
enterprises);
(5). Code Certificate of the organizer;
(6). The Chinese partner, in case of a domestic institution, offers its code certificate and the
duplicate of its business license; in case of a natural person, offers his ID card. The foreign partner,
 in case of an individual, offers his valid identity card; in case of an institution, offers its
 registration document;
 (7). Record-keeping certification of Commerce Department                 (announcing on the website
 of Commerce Department)
(8). Supplementary documents.

3. Foreign investor handles foreign-invested enterprise foreign exchange
registration for mergers and acquisitions of demotic enterprise (excluding foreign investor
investing real estate enterprise):
a. Foreign-invested Enterprise Foreign Exchange Registration Application Form submitted by
foreign-invested enterprise;
b. The approval document issued by commence (industry) departments (excluding enterprise in
bonded area), approval certificate;
c. Approved valid foreign-invested enterprise contract ( excluding foreign wholly-owned
enterprise) and article; shares transfer agreement or documents shall be submitted once shares
transfer happened;
d. Business License Duplicate (inspecting original)
e. Organization Code Certificate;
f. If Chinese investor is demotic institution, the Business License Duplicate and Organization
Code Certificate of the demotic institution shall be sumitted; If Chinese investor is demotic natural
person, the Identity Card of the natural person shall be submitted; If foreign investor is foreign
natural person, the validly Identity certificates of the natural person shall be submitted; If foreign
investor is foreign institution, the Business License Duplicate and Organization Code Certificate
of the demotic institution shall be sumitted;


 The following documents are required to open the capital account:
(1). A written application;
(2). IC card for foreign exchange registration;
(3). Supplementary documents.

The following documents should be submitted to apply for reinvestment in China by Foreign

                                                  90
Partner in terms of Distributed Profit:
(1).A written application from the foreign-funded enterprise which has made profit(simplified as
the profit-making enterprise, including the investment-oriented corporation);
(2). The foreign exchange registration IC card of the profit-making enterprise;
(3). The confirmation letter, from the board of director of the profit-making enterprise, on profit
distribution and reinvestment (adding investment) with profit by the foreign partner;
(4). The latest annual financial auditing report (with the corresponding approval of
foreign exchange income and expenditure) of the profit-making enterprise;
(5). Income tax payment or exemption certificate concerning the enterprise’s reinvestment (adding
investment) profit;
(6). Approval documents and original approval certificate issued by the supervising department;
(7). Capital Examination Report of the profit-making enterprise;
(8). Supplementary documents

The following documents should be submitted to apply for reinvestment by Foreign Partner
in terms of reserved capital, reserved fund surplus, undistributed profit and registered debt
(interest):
(1). A written application from the foreign-funded enterprise
(2). The foreign exchange registration IC card
(3). Decision on capital transfer from the board of director;
(4). Approval documents on capital transfer issued by the supervising department (confirmation
should be made by the supervising department to those enterprises who have registered to
transform debt to capital);
(5) The latest reports on capital examination and financial auditing (with the corresponding
    approval
of foreign exchange income and expenditure);
(6). Those enterprises who have transformed undistributed profit into capital should submit
income tax payment or exemption certificate.
(7). For the registered debts and present interest, it is necessary to provide such approval
documents as debts change feedback, the contract of this debt and certificate of creditor approving
transfer share rights.
(8). Supplementary documents

 (X) Registration of Import & Export Commodity Inspection and Quarantine


Foreign-investment enterprises import lawful commodities during the process of establishment,
the commodities must be tested by inspection and quarantine institutions at Exit and Entry; One
should check out relevant procedures at the inspection and quarantine organizations if he engages
in import-export commodity production and operations related to Exit and Entry inspection and
quarantine monitoring management; Foreign-investment enterprises should set up import-export
commodity inspection and authentication organizations and should submit application to Exit and
Entry inspection and quarantine organizations. Please refer to the website (www.hnciq.gov.cn) of
Exit and Entry inspection and quarantine in Hunan Province for relevant procedures.

 (XI) Property Registration of State-owned Assets


A foreign-funded enterprise which holds or uses state-owned assets shall, after obtaining the
certificate of approval issued by the Hunan Provincial Department of Commerce and submit the
contract, articles of association, certificate of approval (photocopy), "Report on Verification of
Capital" and certificate of capital contribution by the Chinese and foreign parties (including a
detailed property list and the "Notification of Confirmation of Assets Evaluation") issued by a


                                                91
public accountant office to go through the procedures for property registration of state-owned
assets at the management department of state-owned assets relevant with financial relationship of
administrative subordination.


(XII) Environment Protection in Hunan Province


A. Introduction


The overall environment quality in 2010 was improved than before. Among 97 surface water
control and monitoring fracture surfaces, 89 reached the III--Type water quality standard,
accounting for 91.8%, rose 4.3% over that of 2009. The mean value of average concentration for
sulfur dioxide decreased by 9.1% that of the previous year, and the environment and air quality
in 14 provincial level cities all reached II standard of national air quality, the rate of qualified
cities rose from 85.7% in 2009 to 100%.
   Upon the nation’s approval, the sulfur dioxide was reduced by 118,100, dropped 12.81% than
that of 2005, completing 142% of the task made in the “eleventh five year plan”. The net
reduction of chemical oxygen demand reached 96,000 ton, 10.72% lower than that of 2005,
completing 142% of the task made in the “eleventh five year plan”. The emission of Crsenic and
Cadmium dropped by 30.23% and 25.5% lower than that of 2005, completing 121% and 102% of
the task of the “eleventh five year plan” respectively.

B. Environmental Protection Procure


(Any construction project with foreign investment shall go through the following formalities.)


1. The project constructor shall entrust to a qualified institution the task of compiling the
environmental impact assessment report.( the assessment is conducted in accordance with the
Administration List of Environmental Protection for Construction Project.)


2. The project constructor shall submit Environment Impact Report to Environment Protection
Bureau for approval which is conducted in accordance with the corresponding rules at both the
provincial level and the state level


3. After the project is completed, the enterprise shall apply to the environment protection
administration for check and inspection (the project in which trial operation is applied for should
be examined in light of the relevant requirement.). Only after the project is proved to meet the
environmental requirement can the project start regular operation.


4. After the project is put into operation, the enterprise shall register the pollution discharge in the
local Environment Protection Authority and obtain the License of Pollution Discharge.




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IV. Title Transfer


1. Forms of Title Transfer


The state-owned title transfer may be conducted in such forms as bidding, auction, agreement and
in other forms approved by the state law and administrative regulations.


2. Procedures of Title Transfer


(1). Check and approval: the state-owned title transfer should be reported to the government for
approval in accordance with the state regulation. The target for transfer needs financial auditing,
asset check and evaluation.
(2). Application for registration and entrustment: the seller lets the transfer agency issue notice.
(3). Signing of Contract, dealing with payment and title transfer registration.


3. Scope and Parties of Title Transfer
(1). Title transfer may cover part or whole of the property rights and the management rights of an
enterprise.
(2). The parties concerned may be foreign, state-owned and collective enterprises, shareholding
companies, private businesses and other economic entities, regardless of their system of ownership,
line of business and location. The state law and administration regulation should be taken into
consideration.


4. Disposal of the Income from the Title Transfer and Nature of the Transferred Title:


(1)The income from the transfer of the property rights shall belong to the seller of the property
rights. The net income from transferring the state-owned title should be handled in accordance
with relevant regulations.


(2).The nature of the property rights transferred shall be changed according to the nature of the
buyer's property rights.


V. Social and Labor Insurance in Hunan


1. The social insurance develops in an all-round way.
By the end of 2010, the total number of talents in Hunan reached 4.6 million, among
which 2.115 were professional technicians; skilled labor force reached 3.4 million, among which
850,000 were high skilled talents; the practical talents in rural areas reached 1.05 million; Within
Hunan Province there were 49 academicians of the Chinese Academy of Science and Chinese
Academy of Engineering, and the mobile stations and working stations for post-doctoral research
reached 152; 8 innovation parks for returned overseas students were built up; foreign experts for
long-term service in Huan remained 2,000 persons. Now 1,932 persons enjoyed the government’s
special allowance and the selected national-grade talents from “new century hundreds of
talents”project were 102 and 100 young and middle-aged experts made outstanding contribution to

                                                  93
China, the selected persons from “province-new century 121 talents” project were 942.
 By the end of 2010,the insured persons in Enterprise Endowment Insurance reached in the whole
province were 7.29 million, the number in Endowment Insurance of government agency and
institutions was 2.09 million, the number in unemployment insurance was 3.99 million, the
number in medical insurance for urban employees was 7.77 million, the number in employment
injury insurance was 5.15 million, and the number in birh insurance was 5.27 million. The insured
people in Urban Resident Basic Medical Insurance remained more than 10 million , the insured
persons in 46 pilot counties and(cities) for Endowment Insurance were 10 million, among which
2.35 million rural old persons over 60 years old got new-type rural Basic Endowment Insurance,
until then, the whole province realized all coverage of Endowment Insurance for all the urban and
rural residents.
2. Foreigners work in Hunan

In line with the requiements of Management Provisions on Foreign Employees in
China, and Hunan’s Implementaion of “Management Provisions on Foreign
Employees in China” and Notification on Enforcement of Management and Service
for Foreign Employees in Huan (Hunan labor agency GZ[2009] No.88 ), Hunan carried
out employment permission system for foreign employees(the foreigners refers to
those without the Chinese nationality according to Nationality laws of the People’s
Republic of China, foriegn employees refers to those without residence right taking
part in social labor and earning payment of labor in the administrative area of Hunan ).
The permission system apply to the foreign employees and employing unit hiring
foreigners wihthin the administrative region of Hunan.

     .


 (1). Operation procedures
The emloying unit should apply for employment permission for the foreigner to be
employed, the emloyment shall not valid without permission. Foreigners should hold
his certificate and foreign affairs and other invitation letters signed by entitled units to
manageprofession visa in the Chinese Ambassy. After entering Hunan, one should
manageprofession visa then manageresidence certificate in the Public Security
Organizations.
 (2). Foreigners Employment in Hunan shall meet following conditions:
a. Aged 18 or above, in good health;
b. Possessing professional skill and related working experience needed in his employment post;
c. Proof of no criminal record
d. Organizations’ confirmation for the employment
e. Valid passport or other international travel document which can replace the passport

(3)、Application documents for approval of foreigner employment
a. Employer’s invitation
b. Letter of Intent for the employment or contract
c. Valid identity card of foreigner to be employed (passport or other International Travel
Certificates which can replace passport)
d. Foreigners working experience and education background
e. Work Qualification Certificate of the Foreigners for the Employment
f. Health Status Certificate
g. Proof of no criminal record
h. Qualification documents of the employer (the business license, code, tax registration certificate,
   approval certification)
i. Power of attorney of the legal person in the employer, ID care of the authorized person



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3. Instructions on social insurance administration for foreign-invested enterprises:
1. Registration procedure. Enterprises have to managesocial insurance registration at the local
social insurance agencies, and join the social insurance. The registration matters including: name
of organizations, residence, operation place, organization type, legal representatives or principal,
the number of bank of deposit and other specified matters.
2. Declaration procedure. The payment units have to report to the social insurance agency the
amount of monthly payable social insurance charges. Upon the approval of social insurance
agency, the units have to pay social insurance charges within the specified period.
3. Payment procedure. The payment units and individuals should pay the full amount of social
insurance charges in currency form. The individual’s payable social insurance charges should be
withheld and remitted tax from its wages by his unit.
4. Human resource and social insurance administrative department would ordered the units to
manage the social insurance for its employees if it fails to do so; if the organizations fail to pay
any kind of social insurance, he must not only pay the default of payment but also pay the 2‰ of
the payable amount of overdue fine from the day the default begins and add the amount by the day.
And the value of overdue fine would fit into each kind of social insurance funds.

VI. Instructions on Entry and Exit Administration


1. The administrative procedures of entry and exit concerning foreigners:

Conditions of applying port visa and the materials need providing
1) Conditions of Applying port visa from Huanghua International Airport
A. Application for port visa at Huanghua International Airport.
Foreigners should hold the letter from the authorized organizations and hold the
common passport of the country having diplomatic relationship or official trade
contact with China. Due to the following reasons, foreigners have no time to manage
relevant visa at Chinese agencies stationed abroad, can also apply for the visa at port
visa agency of Huanghua airport authorized by the Ministry of Public Security. The
port visa department of the Public Security Organs can sign and issue L, F, G and C
type visa according to the particulars of a matter.
(a) Foreigners invited by China’s temporary decision to attend the trade fair;
(b) Foreigners invited to China for bid or signing official economic and trade contract;
(c)Foreigners invited to China for monitoring the export-import commodities inspection or take
part in the checking and acceptance of contract;
(d) Foreigners invited to China to attend device installation or rush repair of the projects;
(e) Foreigners required by China to resolve problem of claim indemnity;
(f) Foreigners invited by China to provide scientific and technological information;
(g) Foreigners invited by China to organize group and agreed by China for temporary change after
properly completing of visa.
(h) Foreigners come to China to visit dying patients or handle funeral arrangement;
(i) People of direct transit fail to take original plane within 24 hours or need to change to other
transportations due to irresistible reasons;
(j) Other invited foreigners who really have no time to apply for visa at Chinese agency stationed
abroad, and hold the letter agreed by designated competent department to apply for visa at the


                                                 95
port.
(k) International tourism agency in China and the tourism group organized and received by the
approved HongKong, Macau agencies.
      2) The following documents should be submitted:
      a. valid ordinary passport;
      b. Submitting the Foreigner Visa and residence Permit Application Form completely filled up
   and one recent 2-inch half-length, bareheaded and full-faced photograph;

    c. Other doucments raquired by visa section of public security department.

2. Foreigners need to stay in China beyond the valid period of the visa, they should apply for
visa extension procedure in Entry and Exit management department of the local Public
Security Organs.

3. While applying for visa and residence permission in Entry and Exit management
department of the local Public Security Organs, foreigners should answer relevant questions
and provided the following materials.

      (1) Valid international travel document;

       (2) Fill in Visa and Residence Permission Form for Foreigners, submit a recently taken 2

inch head frontage photos without wearing a hat.
  (3) Proof materials related to application for visa and residence permission.
If relevant proof documents are provided, the investors and legal representatives and their
accompanying family members can get 2 years valid residence permission; While common
foreigners seeking employment or held a post in China can gain 1 year valid residence permission
under the same conditions.

4. The administrative procedures of entry and exit concerning Taiwan residents

 A. To manage Taiwan resident port visa and the Taiwai Compatriot Certificate between
Mainland and Taiwan Strait for. Taiwan residents fail to manage Taiwan Compatriot Certificate or
endorsement but must enter China temporary, can manage Taiwan Compatriot Certificate and the
endorsement between Mainland and Taiwan in the port visa department at Huanghua International
Airport. The Public Security Organs port visa department shall issue valid endorsement of once
three months.

The port visa department of Public Security Organs should inquire relevant situations and require
the applicant to provide the following materials when accepting Taiwan Compatriot Certificate
and endorsement

     1) Fill in intact Taiwan Compatriot Certificate between Mainland and Taiwan and
Endorsement (port) Application Form with a recently taken colorful frontage photo without
wearing a hat;
     2) Taiwan residents holding valid Taiwan Compatriot Certificate should submit it; and need
to manage at a time Taiwan Compatriot Certificate if not holding an available one and another
recently taken colorful frontage photo without wearing a hat should be submitted, the


                                                 96
identification card and the documents of Taiwan Entry and Exit should be submitted and inspected
and submit copy.
     B. Completion of the to and from e and residence endorsement
     The applicant should apply in the Entry and Exit management department of the Public
Security Bureau of municipal and regional level in the area where he plans to live. People should
go to the spot personally if it’s his first application, otherwise, it can be done by his working unit.
After being questioned, he should provide the following materials:
     (1) Submit valid Taiwan Compatriot Certificate to and from the Mainland.
     (2)Fill in To and From Application Form Mainland Taiwan Compatriot Certificate for
Taiwan residents.
     (3)Submit 2 recently taken two-inch colorful frontage head photo without wearing a hat;
     (4) One should submit health certificate provided by other health and medical institutions
admitted by Entry and Exit Inspection and Quarantine Department or Public Security Organs.
     (5) Provide original copy and copies of proof material related to application.
     The valid period of residence endorsement can be 1 to 5 years according to the
information provided by applicants.
5.Relevant Procedures on application for visiting Hong Kong and Macau or going abroad on
business for Chinese Participants in Foreign- investment enterprises.
(1) Visit Hong Kong and Macau for business. As for those potential hi-tech enterprises accorded
with the industrial policy of Hunan Province paid more than RMB200,000 Yuan tax fees or earned
more than $200,000 dollars foreign exchange in the previous year or this year, the representative
organizations of enterprises or overseas enterprises paid more than10,000 tax fees in previous year
or this year or with foreign exchange earning proof and permanently stationed in the Inland of
China, the county-grade Public Security Entry and Exit Management Department with acceptance
and handling right shall be responsible for accepting and handling registration application for local
enterprises; in case of no acceptance and handling rights, the Entry and Exit Management
Department in the city and state where the enterprise located shall take responsibility to accept and
handle the application. The record staff in First Type enterprises can sign and issue valid business
endorsement of “More than once a year”, “More than once every three months” and “once every
three months” as needed. The record staff in Second Type enterprises can sign and issue valid
business endorsement of “More than once every three months” and “once every three
months”. .As to non-record enterprise staff, according to actual needs, they can handle valid
endorsement of “once every three months”. Applying for “More than once every three months”
including fewer times shall be examined and approved by Entry and Exit Management
Department of the Public Security Organs in the city and state where the enterprise located.
Applying for endorsement of “once three months” shall be examined and approved by Entry and
Exit Management Departments of provincial and state Public Security Organs. At present, all the
Entry and Exit Management Department of the Public Security Organs in the cities and states all
over Hunan Province can examine and approve valid business endorsement of “More than once
every three months” and “More than once a year” for visiting Hong Kong, and business
endorsement of “More than once every three months” should be reported to Population and Entry
and Exit Management Bureau of the Public Security Bureau in Hunan. Others should be reported
to the Population and Exit and Entry Management Bureau of the Public Security Bureau for
examination and approval as well as accreditation.


                                                  97
 (2.) Business abroad. The Chinese participants in the enterprise applying for going abroad for the
business events, can submit applications to the Exit and Entry Management Department of the
Public Security Organs in the county and city where their registered permanent residence placed
by using their Residence Book and Identification Card, Exit and Entry Management Department
of the Public Security Organs and of the city and state shall examine and approve and issued
certificate.



VII. Guide On Handling Processing Trade In Customs

A. Conditions for permit application

1.The enterprise shall possess the qualification and ability for processing trade;

2.Approved by commerce department in charge;

3.Other conditions stipulated in laws, administrative decrees and rules

B. Name of processing trade business:

Processing trade record ( modify, outsourcing processing, intensive processing carry-over,
remainder carry over, cancel after verification, abandon approval, tax collection for domestic sale.

C. Documents submitted for application:

1. Applying for processing trade contract put in record (modify)

(1)Processing Trade Approval Certificate issued by commerce department in charge, except for
 otherwise stipulated by state authorities;

(2)Production Capacity Certificate of Processing Trade Enterprises issued by commerce
department in charge. (The enterprises that reapply for record in the valid period of Production
Capacity Certificate of Processing Trade Enterprise may submit the duplicate of Production
Capacity Certificate of Processing Trade Enterprise stamped with the enterprise seal to customs);.

(3)Contract or agreement signed by and between the enterprise and foreign partners;

(4) enterprises that entrust others for processing shall submit the Entrust Processing Contract
     The
signed by and between the enterprises and the entrusted processing enterprises;

(5)Product Unit Consumption Calculation Data confirmed and signed by the enterprises,
including process chart, compose chart and process formula;.

(6)Submit Form of processing Contract Record (printed by pre-type-in service office);

(7)The goods controlled by state authorities shall be presented the permit certificate issued by
concerned departments;

(8)Power of Attorney for handling the contract record issued by legal person of the enterprise to
the entrusted handling personnel;


                                                98
(9)Other documents and certificates needed by customs based on rules;

2. Applying for outsourcing processing

(1)Application Form for Bonded Goods Outsourcing Processing sealed by the engaged
enterprise.

(2)Entrust Processing Contract signed by and between the enterprises and the entrusted
processing enterprises;

(3) Business License copy of the entrusted processing enterprises;

(4) Production Capacity Certificate sealed by the Entrusted Processing Enterprises

(5) Other documents and certificates needed by customs based on rules;

3. Applying for Intensive Processing Carry-over

(1) Intensive Processing Carry-over documents approved by commerce department in charge;

(2) Application Form for Bonded Goods Intensive Processing Carry-over of Customs of
P.R.China;

(3) Purchase and Sale Contract or Agreement;

(4) Other documents and certificates needed by customs based on rules;

4. Applying for processing trade remainder carry-over

(1) Application in written form for remainder carry-over of the enterprise engaged in the
processing;

(2)Copy of Processing Trade Register Manual of the roll-out enterprise;

(3)List of Remained Materials of the enterprise engaged in processing planned for carry-over;

(4)Other documents and certificates needed by customs based on rules.

5. Applying for abandon of processing goods

(1)Application in written form for abandon of processing goods of the enterprise engaged in the
processing;

(2)List of Processing Goods of the enterprise engaged in processing planned for abandon;

(3)Certificate of the Real Right Owner for processing goods to consent the abandon;

(4) Value Certificate of Abandoned Processing Goods presented by Price Evaluation Organ
affirmed by governmental price control department

(5) Other documents and certificates needed by customs based on rules



                                                  99
6. Applying for domestic sale of processing goods

(1) Approval Certificate for Bonded Materials Domestic Sale in Processing Trade issued by
commerce department in charge

(2) Application in written form for domestic sale of bonded processing goods of the enterprise;

(3) Other documents and certificates needed by customs based on rules

(4) List of Goods for domestic sale in processing trade ;

7. Applying for cancel after verification of processing trade manual

(1) Application in written form for cancel after verification of bonded processing goods sealed by
the enterprise engaged in the processing;

(2) Product Unit Consumption Calculation Data confirmed and signed by the enterprises,
including process chart, compose chart and process formula;.

(3) Import and Export Customs Declaration specialized for processing trade;

(4) Report Form for Cancel after Verification of the Processing Trade (printed by pre-type-in
service office);

(5) List of Use for Imported Materials

(6) Other documents and certificates needed by customs based on rules

D. Procedure briefing


1. While the processing trade operation enterprises apply for contract record in the customs of the
enterprise located (In case the operation enterprise and processing enterprise are not in the same
administrative region of the customs control, the goods record procedures shall be handled
according to the rules of Ex-situ processing trade administration of the customs), the related data
shall be firstly input in the pre-type-in center. The customs concentration check center shall
examine and verify the e-data. After the data check passed, the e-data can be turned into the
bonded supervision and control site. The enterprise may hand in the documents to the supervision
and control site for auditing. For those data check not passed, the applicant may have the right to
apply for administrative review or proceed to administrative suit.

2. While the operation enterprises apply for outsourcing processing in the customs of the
enterprise located, the Application Form for Bonded Goods Outsourcing Processing shall be firstly
input in the pre-type-in center. The customs concentration check center shall examine and verify
the content of the application form. After the data check passed, the e-data can be turned into the
related business site. The enterprise may hand in the data to the bonded goods supervision and
control site for auditing. For those data check not passed, the applicant may have the right to apply
for administrative review or proceed to administrative suit.

3. While the operation enterprises apply for intensive processing carry-over business, the


                                                100
Application Form for Bonded Goods Intensive Processing Carry-over of the Customs of P.R.China
(hereinafter called Application Form) shall be input in the pre-type-in center as the carry-over
handling of the roll-out and roll-in enterprises. The customs check center shall carry out the record
and examine the enterprise data declared on internet. After the Application check by both customs
in charge passed, the roll-in and roll-out enterprises may handle the carry-over goods receive and
deliver procedures. The enterprises for roll-out and roll-in shall declare actually Goods Receive
and Deliver List or Goods Returned Note by computer based on stipulated schedule for each batch
of receive and deliver. The enterprises for roll-out and roll-in shall apply for the carry-over in the
customs of their located respectively. For those application not approved, the applicant may have
the right to apply for administrative review or proceed to administrative suit.



4. While the operation enterprises apply for remaining materials carry-over business in the
customs of the enterprise located, the Liaison Form for Processing Trade Remainer Carry-over of
the enterprise shall be signed and stamped by customs. For those application not approved, the
applicant may have the right to apply for administrative review or proceed to administrative suit.


5. While the operation enterprises apply for processing trade cancel after verification in the
customs of the enterprise located, the related data of the enterprise shall be firstly input in the
pre-type-in center. The customs concentration check center shall examine and verify the E-data
After the data check passed, the e-data can be turned into the related bonded supervision and
control business site. The enterprise may hand in the documents to the supervision and control site
for auditing.



6. While the operation enterprises apply for processing trade goods domestic sale in the customs
of the enterprise located, the related data of the enterprise shall be firstly input in the pre-type-in
center. The customs concentration check center shall examine and verify the E-data After the data
check passed, the e-data can be turned into the related bonded supervision and control business
site. The enterprise may hand in the documents to the supervision and control site for auditing. For
those application not approved, the data may be returned.


E. Recently Released Political Policy

1. Make great efforts on industrial transfer. Carefully carry through Opinion on Undertaking
Industrial Transfer and Promoting Development of Processing Trade from the People’s
Government of Hunan Province (Xiang Political Issue [2008] No.16). Improve the construction of
the infrastructure, public service platform and supporting facilities in key undertaking spot of
processing trade transfer and key (pilot) counties which undertake the industrial transfer by
providing subsidies on the standard of RMB 10-15 Yuan per square meter to the newly built
standard workshops that meet conditions. Accelerate the construction of nation class
demonstration zones that undertake industrial transfer in Xiangnan, and perfect the continuous
identification method on qualification concerned for enterprises involved in the transfer.


                                                 101
Enterprises which have been transferred to our province as high-tech enterprises or material
comprehensive utilization enterprises identified by other provinces will continue enjoying relevant
favorable policies during the period of validity of the identification after being reviewed by
department concerned.

2. With the undertaking of industrial transfer as the agent, take the opportunity of global industrial
transfer by further exerting the important effect of key undertaking spot of national processing
trade graded transfer, province class key undertaking counties, pilot counties and demonstration
zones and making scientific industrial transfer plan to promote the establishing of an appropriate
industrial layout. Meanwhile, the advantage of the position, material and human resource of our
province should be brought into play; supporting functions should be strengthened to enhance the
appeal and cohesion in undertaking industrial transfer of our province. The dynamic news of
industrial transfer must be grasped in time. For those strategic projects with high value investment,
strong driving force and high relevance and core enterprises, high class promotion, high position
cooperation and special treatment for special situation should be implemented to promote the
group transfer and group development.

3. Optimize the layout in Opening Area. Accelerate the exploration and opening of the city group
around Changsha-Zhuzhou-Xiangtan. The pilot zone of Changsha-Zhuzhou-Xiangtan “two
oriented society” should take the lead in opening up wider and become the volunteer and
demonstration zone for the wider opening of the province. Backed by the national new and
high-tech industrial development zone, economic development zone and the undertaking base of
industrial transfer, an internationally competitive device manufacturing base, important
electromechanical product export base, strategic new industry base and culture creation center
with international influence should be built with efforts. Accelerate the development of port
economy and airport economy. Turn the area close to the port of Yueyang into an important
international port, logistics center and national bonded port on the middle reaches of Yangtze
River and, exert its effects as a volunteer in the opening up of our province. Speed up the opening
up of Huanghua International Airport by striving for setting up more flight courses and scheduled
flights and accelerate the development of aviation freight. Compete for upgrading Jinxia Bonded
Logistics Center into Changsha-Zhuzhou-Xiangtan Comprehensive Bonded Area. Take full
advantage of the geographical position of great southern Hunan Province, the emphasis of which
is its connection to Guangdong, Hong Kong and Macao, Beibu Gulf Economic Zone and
China-ASEAN Free Trade Zone, and strive for becoming the national demonstrate zone that
undertakes industrial transfer. Speed up the opening and development of great western Hunan
Province by cultivating and developing characteristic opening economy such as tourism,
biomedicine, food processing, ecological agriculture and cross-provincial trade logistics and,
integrate with Wuling Mountain economic cooperation zone actively.

4. Accelerate the Opening and Development of Economy in the Counties. The counties, cities and
districts should grasp the big opportunity for development by innovating the opening and
development perspective. Take reality as the starting point, rely on the resource advantage, spare
no efforts in investment attraction and, continuously increase the opening level of the countries’
economy. The emphasis of county opening economy should be put on the encouragement of


                                                 102
foreign investment in modern agriculture, the development of deep processing in
resource-dependent products and, the exploration of market abroad and domestic. The key
counties and pilot counties that undertake the industrial transfer must exert its policy advantage in
investment attraction in developing processing trade; great effort should be taken to the expansion
of foreign export to behave as a qualified volunteer in the development of open economy of the
counties. Pay special attention to the construction of a group of counties, districts and cities with
open economy, outstanding industrial characteristic, big export scale and high extroversion degree.
The province and the cities should provide strong backup to the opening development of economy
of the counties in policy, investment invitation channel, personnel training and client information.

5. Support the expansion of undertaking capacity of development zones at levels higher than
province level. Project area could be constructed in the surrounding of the province level
development zones in the key undertaking spots of processing trade graded transfer and, key (pilot)
counties that undertake industrial transfer, where comply with urban and rural layout and the land
use planning, which would be included into the general planning of the zone and enjoy the
relevant policies with the zone. Cooperative zones could be set up inside development zones
above province level under suitable conditions to develop cooperation with investors both abroad
and domestic.

6. Accelerate the construction of smooth customs clearance system in ports. Strengthen the
construction of infrastructure and supporting facilities in ports, complete the port functions,
increase port work zones, accelerate the construction of electronic port’s entity platform and
realize the sharing of information resource. Inspection and quarantine and the working offices of
customs are supported to be built in cities and counties under suitable conditions; efforts should be
made to build export processing zone or comprehensive bonded area in Changsha, Yueyang and
Hengyang and the role of Chenzhou as an export processing platform should be brought into
better play. Strengthen trans-regional port cooperation, promote the rapid customs clearance mode
of “applying in the place belonged to, checking in the port”; implement the customs clearance
policy of 24 hours booking and provide personalized customs clearance service to key import and
export enterprises and build up inspection and quarantine green channel and no-check customs
clearance system to import and export credible enterprise. Simplify exit and entry procedures for
business people and expand the range of through train for enterprises with demand of going
aboard on business. Perfect the coordination mechanism of the customs clearance in ports
throughout the province, strengthen the coordination of departments in charge of ports, customs,
inspection and quarantine, frontier defense, finance, revenue and transport, take efforts to build a
foreseeable customs clearance system with high efficiency and low cost and realize the
convenience of investment trade.
he construction of export processing area and bonded logistics zone, encourage and lead the
industrial transfer enterprises into active processing trade, give priority to the processing trade in
enterprises specializing in advanced equipment manufacturing, information industry, biomedicine,
new material, new energy and energy-saving and environment-friendly industry and, lead the
processing trade to the high-end of the industrial chain.




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                             Preferential Policies for Investment

I. Regulations on Basic Taxes<top>


II. Preferential Taxation Policies<top>


III. Preferential policy concerning the administration of entry and exit<top>

IV. Several Opinions of the State Council on Further Utilizing Foreign Investment
V. Hunan Provincial People's Government’s Comment on Speeding up the Development of
Service Outsourcing Industries<top>
VI. Hunan Provincial People's Government’s Comment on Taking Industrial Shift and
   Promoting process trade<top>
Ⅶ Hunan Communist Party Committee Hunan People’s Government made strategic
 .
   decision on accelerating emerging industries. <top>
Ⅷ . Applying for confirmation letter concerning the state-encouraged foreign-funded
   projects<top>
IX. Hunan Provincial Party Committee of CPCThe People's Government of Hunan Province
  Decision on further expansion of opening up and acceleration of the development of open
                                       economy <top>
X. Several Policies to Speed up the Development of Open Economy<top>




Ⅰ Regulations on Basic Taxes <top>
 .

Concering the applicable taxation to foreign-funed and foreign enterprises. In addition to
Provisional Regulations of the People's Republic of China on Value-added Tax, Provisional
Regulations of the People's Republic of China on Consumption Tax, Provisional Regulations of
the People's Republic of China on Business Tax, and Enterprise income tax law of the People’s
Republic of China, the following regulations are applicable to foreign-funded and foreign
enterprises.

1.Revision of Provisional Regulations of the People's Republic of China on Urban Land Use Tax
promulgated by the State Council on December 30,2006;
2.Provisional Regulations on Vehicle and Vessel Tax promulgated by the State Council on
December 27, 2006;
3 . Provisional Regulations of the People's Republic of China on Land Appreciation Tax
promulgated by the State Council on December 13,1993;
4.Provisional Regulations of the People's Republic of China on Resource Tax promulgated by the
State Council on December 25, 1993;
5.Provisional Regulations of the People's Republic of China on Stamp Tax promulgated by the
State Council on August 6, 1988;
6. Provisional Regulations of the People's Republic of China on Real Estate Tax promulgated by

                                             104
the State Council on September 15, 1986;
7.Hunan Communist Party Committee Hunan People’s Government made strategic decision on
accelerating emerging industries.
8. Provisional regulations on urban maintenance and construction tax of the People’s Republic of
China issued by the State Council on February 8th 1985.
9. Provisional regulations on levy additional charges on education issued by the State Council on
April 28th 1986.
10. Administrative Measures on additional charges of education and local education additional
charges in Hunan issued by Hunan Provincial People’s Government on December 19th ,2007.
II. Preferential Tax Policies<top>

STATE TAXATION




    )
  (Ⅰ VAT(value-added tax)

(1)Since January 1st, 2009, added-value tax payer has been able to use added-value tax invoice,
the customs-import-tax-payment letter and transport-cost-settlement bill to deduct tax when he
purchases or self-make fixed asset in accordance with Provisional Regulations of the People's
Republic of China on Value-added Tax (the State Council Document No. 538) and Implementation
Details of Provisional Regulations of the People's Republic of China on Value-added Tax (the
Ministry of Finance, the State Taxation Bureau Document No. 50). The payment is written in the
category of Value-added tax payable
(2)The deductible tax for the fixed asset refers to that arises since January 1st, 2009.
(3)    Since January 1st, 2009, the value-added tax is paid in the following different situations when
used fixed asset is sold:
      a)Applicable tax rate is levied for the fixed asset which was bought or made after January 1st,
2009;
      b) Half of the tax payment based on rate of 4% is levied for those who were not included in
the expanded scope of value-added tax system before December 31st, 2008, and sell their fixed
asset which was bought or made before December 31st, 2008;
      c)For those were already included in the expanded scope of value-added tax system before
December 31st, 2008, Half of the tax payment based on rate of 4% is levied for their fixed asset
which was bought or made before their involvement in the system; Applicable tax rate is levied
for the fixed asset which was bought or made after their involvement in the system.
(4) Value-added tax is exempted for the following self-made products:
      a) reclaimed water
      b) rubber powder completely made of discarded tires
      c) renovated tire
      d)the specific building materials with the doped residue of more than 30%
(5) Labor in sewage treatment is exempted from value-added tax.
(6) For the following self-made products, the tax will be returned after it is levied:
      a) high purity carbon dioxide made from industrial waste gas
      b) electrical or thermal power fueled by garbage
      c) shale oil made from shale which is dug and discarded during the process of coal mining
      d) renewed asphalt concrete made from scrap asphalt concrete. Waste Asphalt concrete
accounts for not less than 30% in the raw materials.
      e) cement (including cement clinker) made in the rotary kiln process. Waste residue accounts
for not less than 30% in the raw material..
(7)For the following self-made products, half of the tax will be returned after it is levied:
      a) nitrocellulose paint powder made from retired military powder,


                                                 105
      b) by-products made in desulfurization from fume and sulfur gas discharged from the coal
power plant and other various industrial enterprises,
      c) steam, active carbon, white carbon black, lactic acid, calcium lactate, methane made of the
abandoned wine lees
      d) electrical or thermal power generated by using gangue, coal slime, stone coal, oil shale
which accounts for not less than 60% in the raw fuel
    e) electricity generated by wind power,
    f) some new wall materials.
(8) For sale of self-made bio-diesel, , the tax will be returned after it is levied.
(9) Applicable tax rate instead of simple treatment is employed for clay brick and tile. Since
July1st, 2008, the tax-return policy has not apply to the cement (including cement clinker)
manufactured in the shaft kiln process.
(10) Since January 1st, 2009, the policy has been cancelled that waste collector is exempted from
value-added tax in selling its waste and waste buyer is exempted from value-added tax in buying
waste from the collector, which accounts for 10% of the total amount recorded in the invoice
supervised by the taxation authority.
(11) When renewable resource is sold, value-added tax should be paid in accordance with
Provisional Regulations of the People's Republic of China on Value-added Tax and
Implementation Details of Provisional Regulations of the People's Republic of China on
Value-added Tax. Those who purchase renewable resources are able to, with the tax-return warrant
stipulated in the above Regulation and Implementation Details, deduct their tax payable. The
former invoice with recorded “waste materials” has expired.
(12) By the end of 2010, the qualified tax payer will be able to enjoy the return-after-levy policy
when he sells renewable resource.
      In 2009, 70% of the tax will be returned to the qualified payer in selling renewable resource;
in 2010, 50% will be returned.

(II) Corporate Income Tax
1. The income of those enterprises which are engaged in agriculture, forestry, animal husbandry
and fishery is exempted from income tax.

   The
2、 enterprise is exempted from half income tax, dealing with flowers, tea, beverage pand spice
plant as well as seawater and inland breeding.

3、The enterprise involved in such state-supporting key infrastructure projects as port, airport,
railway, road, urban traffic, power supply, water conservancy, which are included in List of
Preferential Income Tax for Public Infrastructure Projects, is, after its first income is earned,
exempted from full income tax for the initial 3 years, and from half income tax for the subsequent
3 years.

4、 The enterprise involved in such environmentally-friendly, energy and water saving projects as
sewage treatment, garbage treatment, methane utilization, energy-saving technology, seawater
desalting, which are supported by the State Council, is, since its first income is earned, exempted
from full income tax for the initial 3 years, and from half income tax for the subsequent 3 years.

If the tax-reduction project in above mentioned Art.3,4, items is transferred within the reduction
period, the accepter is entitled to enjoy the exemption from the day of transfer to the day when the
exemption expires. If the project is transferred after the exemption expires, the acceptor is
refrained from the preferential taxation.

5. The enterprise whose technical transfer in 1 taxation year is worth less than RMB 5 million is
exempted from full income tax; for the amount over RMB 5 million, half income tax is reduced.

6.The non-resident enterprise is entitled to pay 90% of its income tax if it does not set any branch
in China, or its income does not come from the branch.

7.The income tax is exempted for the following incomes:

                                                106
(1)the interest income from the national debt issued by the financial department under the state
council;
(2)the income from equity investment in the resident enterprise, such as dividend and bonus ;
(3)such income as dividend and bonus from equity investment in the resident enterprise by the
non-resident enterprise which sets branches in China and whose income comes from its branches;
(4)the income made in non-profit activities by non-profit organizations.
The equity investment income excludes the revenue from stocks which, issued by the
resident enterprise, circulates less than 12 months.

8.The small-profit enterprise is allowed a 20% reduction in its income taxation.

9.The hi-tech enterprise supported by the state is allowed a 15% reduction in its income taxation.

10.The government of the ethnic autonomous district is entitled to make a decision concerning
reduction or exemption of its shared tax-income, however, it should approved by provincial
government.

11.The research expense for developing new technology, new product and new processing is to be
deducted in 50% of its amount if it does not turn into the intangible asset. It is to be amortized in
150% of the asset cost if it has turned into the intangible asset.

12.The enterprise which offers the handicapped jobs is exempted from 100% of the wage amount
paid to the handicapped on the basis of actually deducting the paid wages to the handicapped. The
handicapped employee is recognized in accordance with Law of the People's Republic of China on
Supporting the Handicapped.

13.The business-initiation enterprise which invest, with equity capital, the unlisted hi-tech
enterprise for more than 2 years is exempted from the income tax payable based upon 70% of the
equity capital at the second year of holding it, or in the following years.

14.Cutting depreciation year or speeding up depreciation applies to the fixed asset which upgrades
within short period due to technical progress or keeps staying in strong chock and frequent
erosion.
For the former, the shortest number of years should not be less than 60% of the legal number, for
the latter, double-balance degression or year summation should be adopted.

15.The enterprise which chooses as the main raw material the resource prescribed in List of
Preferential Income Tax for the Resource-Comprehensive-Utilization Enterprises and whose
products are not restricted or prohibited by the state, is allowed 10% deduction from the income
earned from those products. The raw material percentage of production claimed the standard is in
accordance with the List.

16.The enterprise which purchases and uses the environmentally-friendly, water & energy-saving
and safe-work equipment prescribed in List of Preferential Income Tax for the
environmentally-friendly-equipment Enterprises, List of Preferential Income Tax for the
water-energy-saving-equipment Enterprises and List of Preferential Income Tax for the
Safe-Work-Equipment Enterprises is allowed 10% of the equipment cost from its tax payable in
the same year, or in the subsequent 5 years.
The enterprise that enjoy the preferential tax policies shall actually purchase and use the special
equipment in the catalogue, and should be denied that taxation favor if it puts the equipment on
transfer or lease within 5 years. In addition, it should compensate the deducted tax.
In above mentioned enterprise income tax preferential policies,if an enterprise involves different
projects in terms of the income tax treatment, the preferential project should be individually
handled, reasonably bearing the cost during the enterprise operation; Otherwise it is denied the
favorable taxation.

                                                107
  )
(Ⅲ VEHICLE PURCHASE TAX

The returned students who are serving in China can be exempted from the car purchase tax if they
buy one unit of car. The foreign experts who are settling in China can be exempted from car
purchase tax if they import one unit of car for self-use.

LOCAL TAXATION
(Ⅰ)Business tax
(1). The common life insurance, pension insurance less than one year (including one year)
launched by the insurance companies as well as health insurance more than one year or more, can
be exempted from business tax if listed by Ministry of Finance and State General Administration
of Taxation.
(2). The insurance income from individual investment bonus launched by the insurance companies
can be exempted from the business tax.
(3). The grain logistic project loaned by the World Bank can be exempted from construction and
installation business tax and the project service income tax.
  (4). In case the foreign companies transfer the stock right of the enterprises owned in Chinese
territory, the business tax can be exempted if the stock right is not involved with the transfer of
intangible assets or real estate.
(5). The foreign funded enterprises and foreign enterprises engaged in financing lease business
with an approval of the Ministry of Commerce shall enjoy the equal treatment as the domestic
enterprises on the financing lease business with an approval of the People’s Bank of China to pay
business tax based on the terms of financing lease.
(6). Any foreign enterprises possess the identification of countries that signed the Protocol and
Agreement with China, meeting the terms of Protocol of Double Tax Levying Avoidance signed
between China and other countries, the terms of Protocol of Mutual Exemption for International
Transport Income of the Shipping Companies, Ocean Shipping Agreement as well as other
agreement or Exchange of Notes (hereinafter called Protocol or Agreement), can be exempted
from enterprise annual income tax and business tax if they get the freight income from
international transport by operating shipping based on the terms defined in The Notice of
Interpreting Chinese Transport Issues in the Tax Levying Regulations promulgated by State
General Administration of Taxation, except for the agent income of various shipping agents.

(7)The institutions and individuals (including foreign-funded enterprises, the research and
development centers with foreign investment, foreign enterprises and foreign individuals) shall be
exempted from the business tax on the incomes that are obtained from technological transfer,
technological development business and the relevant technological consulting and the
technological services.


(8).According to GSBF (2004)No.80 Doc. The examination and approval procedures for
business tax exemption shall be cancelled for the income of foreign enterprises and individuals
from the technical transfer in Chinese territory. After the cancellation, the foreign enterprises and
individuals who demand to the business tax exemption shall submit the following documents to
the taxation authorities for obtaining the tax exemption approval.
(1) Contract in Chinese version for technical transfer and technical development;


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(2) Examination opinion certificate provided by the provincial sci-tech department in the
location of the technology accepter;
(3)Technical transfer permision documents issued by state department in charge;

(4)The foreign enterprises and individuals who entrust Chinese accepter of the technology to
handle with the procedures for business tax exemption shall provide the Power of Attorney signed
by the legal representative of the applicant. .


(9) In the case that foreign enterprises sold the software to the enterprises in Chinese territory or
      .
sold post, telecom equipment and computers and these cargoes related software, no matter whether
the domestic accepters paid the customs duty and import link value-added tax for the software or
not, the paid software use fee will not be deducted for the business tax of the foreign enterprises.
(Ⅱ)INDIVIDUAL INCOME TAX
(1). Foreign experts’ wage is exempted from the tax. Following foreign experts’ wage and salary
exempted from individual tax; (CSZ (1994) No. 20)
a. Foreign experts designated by World Bank to China according to the Specialized Loan
Agreement of the World Bank;
b. Foreign experts designated by UN organizations to China;
c. Foreign experts designated by UN to China for the aided projects;
d. Foreign experts designated by donation countries to China for the donated projects;
e. Foreign experts engaged in culture and education within 2 years in China based on the
agreement signed by the governments, with the wage and salary borne by the designated
countries;
f. Foreign experts designated by civil scientific research institutes, with the wage and salary
borne by the designated countries.
(2). Foreign employees who are working in international organs and embassies in China may be
exempted from the individual income tax temporarily.
(3). Foreigners’ housing allowance, accommodation allowance, washing fee, removal fee, business
trip fee, home leave fee, language training fee, children education fee and other allowance can be
exempted from individual income tax after the taxation verification to the vouchers provided by
the taxpayers.
(4). The profit (stock bonus, interests) obtained from foreign invested enterprises or from
sino-foreign joint ventures can be exempted from the income tax.The profit (stock bonus, interests)
obtained from holding B Share or overseas share by enterprises and individuals or from listed
Chinese enterprises in overseas stock market can be exempted from the income tax..
(5). Employees’ overseas insurance fee paid by foreign funded enterprises or the payable sum paid
by foreign enterprises but without deduction from the enterprise payable tax may not be levied
with income tax after verified by local taxation authorities if the social insurance fee is really
borne by the employer based on relevant state regulations.
(6). As for the teachers and researchers tax exemption terms, based on tax agreement signed by
Chinese departments, who are engaged in teaching, lectures or scientific activities in Chinese
universities, colleges and schools or educational institutes, they may be exempted from the income
tax during the agreement period.
  )
(Ⅲ OTHER TAX
1.The tax payer having difficulty in paying the land-use tax should report to the provincial tax


                                                109
authority for exemption which is to be determined by the State Tax Bureau.


2.The foreign embassy, consulate, international organization with their staff are exempted from
vehicle and boat tax in accordance with relevant Chinese laws and the international treaties China
participates in or concludes.


3.The foreign-funded enterprises, the foreign enterprise, organization and individual are exempted
from urban real estate tax for their self-use houses in running the school, the hospital, the
kindergarten and the sanatorium for the elder.
The enterprise whose handicapped employees account for 35% of the total staff is exempted from
urban real estate tax, in terms of their self-use houses.
The enterprises are exempted from half of the urban real estate tax for the residential buildings
they rent to their employees.
The foreign individual is exempted from the urban real estate tax in terms of non-business house.
The urban real estate tax should be levied on the basis of 80% the original value.
The taxpayer having difficulty in paying the real estate tax should report to the local tax authority
for corresponding exemption which is to be determined by the county or a higher tax authority


4. The contract text for the preferential loan provided by foreign government or international
financial institutions to Chinese government and state financial institutions can be exempted from
the stamp tax.


<<Notice for Import Tax Policy about further encouraging foreign investment>> issued by
the Customs General Administration

(I) In terms of the technological transformation of the established foreign-invested enterprises
belonging to the encouraging kind and the limited class B, the foreign-invested research and
development center, the advanced technology-type and the product export-oriented
foreign-invested enterprises (called five kinds of enterprises for short hereinafter), such an
enterprise can be exempt from import tariff and import link tax according to the State Council’s
Notice about Regulating Imported Equipment Tax Policy (Guo Fa No. [1997]37) when this
enterprise wants to import equipment for self-use, auxiliary technologies, fittings and spare parts
within the originally ratified production and operation scope, under the circumstances that the
domestic factories cannot produce such things or the homemade products’ performance fails to
satisfy the need of this enterprise.

A.Enjoying this preferential tax exemption policy shall conform to the following conditions:

(a) The funds source should be the self-owned funds out of the total invested capital of five
kinds of enterprises (specifically referred to the enterprise’s reserve funds, development funds,
depreciation and profit after tax. The following content as same as hereof will be omitted
hereinafter.)

(b)Use of imported commodities: Within the originally ratified production and operation scope,
renewing or maintaining the original equipment of this enterprise (excluding the complete sets of
equipment and production lines);


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(c)   Scope of imported commodities: The equipment which the domestic factories cannot produce,
or whose performance fails to meet the need of enterprise (i.e. the commodity which is not listed
in the Non-exemption Imports Catalogue in Terms of the Domestic Investment Projects), and the
technology, fittings, spare parts to form a complete set with the above-mentioned equipment
(including the one imported with the equipment or the one imported solely).

B. Tax exemption procedure transaction

(a)Issue of the import certificate: According to Points 1, 2, Item (I) of this article, the competent
department issues the Certificate of the Foreign-invested Enterprise Importing Renewed
Equipment, Technology, Fitting and Spare Parts (see Annex 1 for format), of which the certificate
for foreign-invested enterprise belonging to the encouraging kind and the limited class B shall be
issued by the original competent department which issued the project confirmation letter to such
an enterprise (the certificate for the above-mentioned enterprise which was ratified to establish
before Dec. 31, 1997 shall be issued by the original approving authority); the certificate for the
foreign-invested research and development center shall be issued by the original approving
authority (as for the specific department, refer to Point 1, Item (I), Article II of this notice for
details); the certificate for the advanced technology-type and the product export-oriented
foreign-invested enterprises shall be issued by the Ministry of Foreign Trade and Economy or the
provincial, autonomous or municipal bureau of foreign trade and economic cooperation, which
issued the Foreign-invested Product Export-oriented Enterprise Confirmation Letter and the
Foreign-invested Advanced Technology Enterprise Confirmation Letter originally.

(b)Tax exemption certificate transaction: Upon the above-mentioned import certificate, contract
and import license and other related information submitted by the enterprise, if it is in conformity
with Point 3, Item (I) of this article after checking the imports scope, the customs directly under
the municipal superior authority in the seat of this enterprise will issue the enterprise the tax
exemption certificate.

C. Special regulations:

(a)If an enterprise of the above-mentioned five kinds carries out technological transformation
beyond the regulated scope of Point 2, Item (I) of this article, its import certificate shall be issued
the Technological Transformation Project Confirmation Registration Certificate by the national or
provincial commission of trade and economic cooperation (see Annex 2 for format).

(b)If an enterprise of the above-mentioned five kinds needs to import commodities listed in the
Non-exemption Imports Catalogue in Terms of the Domestic Investment Projects for carrying out
equipment renewal or maintenance or technological transformation by using its own funds, under
the circumstances that the performance of domestic products of the same kind cannot meet the
enterprise’s need, the national trade authority in charge of managing this kind of products will
check and issue the Certificate of the Foreign-invested Enterprise Importing the Same-kind
Equipment Which Cannot be Produced Internally for Equipment Renewal or Technological
Transformation (see Annex 3 for format). And then the customs directly under the municipal
superior authority will handle the procedure for tax exemption examination and approval in terms
of equipment and auxiliary technology upon the above-mentioned certificate, the Certificate of the
Foreign-invested Enterprise Importing Renewed Equipment, Technology, Fittings and Spare Parts
or the Technological Transformation Project Confirmation Registration Certificate, the contract
and the import license.

(c)As for the foreign-invested research and development center, if it wants to import the
equipment for self use, and the auxiliary technology, fittings and spare parts within the total
invested capital when the domestic factories cannot produce the products of the same kind or such
homemade products’ performance cannot satisfy its need, the customs won’t collect the import
tariff from it according to the State Council’s Notice about Regulating Imported Equipment Tax
Policy (Guo Fa No. [1997]37).

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A. Enjoying this preferential tax exemption policy shall conform to the following conditions:

(a). The enjoying unit shall be a research institute which specially engages in product or
technology development and established in the internal of a foreign-invested enterprise or
established solely, which is ratified by the National Economic Planning Commission, the National
Commission of Trade and Economic Cooperation, the Ministry of Foreign Trade and Economy,
and the Municipal Economic Planning Commission, the Municipal Commission of Trade and
Economic Cooperation and the Municipal Bureau of Foreign Trade and Economic Cooperation or
the Provincial Department of Commerce in each province, autonomous region, municipality or
planned solely-listed city;

(b). The funds source shall be within the total invested capital;

(c). Scope of imported commodities: The equipment which the domestic factories cannot produce,
or whose performance fails to meet the need of enterprise (i.e. the commodity which is not listed
in the Non-exemption Imports Catalogue in Terms of the Domestic Investment Projects), and the
technology, fittings, spare parts to form a complete set with the above-mentioned equipment,
however, only confined to the laboratory or the pilot-scope which cannot form mass production,
excluding ships, planes, special vehicles and construction machines.

B. Tax exemption procedure transaction:

(a). Issue of the project confirmation letter: According to the above-mentioned research institute’s
approving jurisdiction, the National Economic Planning Commission, the National Commission of
Trade and Economic Cooperation, the Ministry of Foreign Trade and Economy, and the Municipal
Economic Planning Commission, the Municipal Commission of Trade and Economic Cooperation
and the Municipal Bureau of Foreign Trade and Economic Cooperation or the Provincial
Department of Commerce in each province, autonomous region, municipality or planned
solely-listed city issue the project confirmation letter to the foreign-invested research and
development center according to Points 1 and 2, Item (I) of this article. The format and content of
the project confirmation letter is identical with those of the Confirmation Letter of the Internal or
Foreign-invested Projects of which the State Encourages Development attached by the Shu Shui
No. (1997)1062 Document.

(b).Tax exemption procedure transaction: Upon the above-mentioned project confirmation letter
and related information, the customs directly under the municipal superior authority in the seat of
this enterprise handles the procedure in the light of the Shu Shui No. (1997)1062 Document.

(III). As for the project in accordance with the Catalogue of the Provinces, Autonomous Regions
and Municipalities in the Middle West Taking Use of Foreign-invested Advantageous Industries
and Advantageous Projects (upon the State Council’s ratification, publish otherwise. The
following content as same as hereof will be omitted hereinafter), when the domestic factories
cannot produce equipment for self-use, auxiliary technologies, fittings and spare parts or such
things’ performance cannot meet the need within the total invested capital, the customs won’t
collect the import tariff and the import link tax, excepting the Catalogue of Non-exemption
                                                                                   37
Imports in terms of the Foreign-invested Projects regulated by the Guo Fa No.1997) Document.
The related procedures will be handled in the light of the regulations in the Shu Shui No.
[1997]1062 Document.

(IV). As for the project in accordance with the Catalogue of the Provinces, Autonomous Regions
and Municipalities in the Middle West Taking Use of Foreign-invested Advantageous Industries
and Advantageous Projects, when the enterprise needs to import the commodity within the
commodity scope of enjoying preferential tax policy by using the self-owned funds out of the total
invested capital, the tax exemption procedure will be handled in the light of the related regulations
about the five kinds of enterprises in Article I of this notice.


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(V). The imported goods exempt from tax in accordance with regulations of this notice are those
supervised and controlled by the customs, and the enterprise cannot sell or transfer without
authorization. If the replaced equipment due to renewal or technical transformation is used
continuously in this enterprise, the customs will administer according to the supervising time limit.
If the above-mentioned replaced equipment is sold or transferred to the other enterprise which
enjoys the imported equipment preferential tax policy within the supervising time limit, it can be
exempt from paying an overdue tax, otherwise the tax shall be collected according to the rules.

This notice was issued in 1999, which is still in enforcement. The authorities of a part of
administrative departments described in the notice have been adjusted. Please consult the local
customs for details. The foreign-funded enterprises of the encouraging kind and the limited class
B are defined in the Catalogue for the Guidance of Foreign Investment Industries applicable in the
year.
Notes:
(1) The foreign investors and foreign cooperators described in the above-mentioned tax preference
policies are all applicable for investors and cooperators from Taiwan, Hong Kong, Macao and
Chinese foreign compatriots from other countries.
(2). Except part of above-mentioned investment policies applicable in Changsha City, Yueyang
City and Xiangxi Autonomous Prefecture, the investment policies applicable in administrative
zones and economic zones at the provincial-below level are not listed in this handbook. Please
consult the local commercial or investment promotion departments for the details.

Taxation management of export processing zone: (Note: compiled according to
Guo Shui Fa [2000] No.155 Document and Guo Shui Fa [2002] No.116 Document
issued by State Administration of Taxation)
     (1) Export processing zone means a special closed area approved by the State
Council and supervised by the customs.
     (2) For the goods transported out of export processing zone, thre customs shall
go through import entry procedure according to relevant regulations regarding import
goods and collect value added tax and consumption tax on such goods; goods
transported by an outside enterprise into export processing zone shall be regarded as
export goods, the customs shall go through customs clearing procedure for export and
issue goods declaration for exportation (special use for export rebates).
     An “outside enterprise” means an enterprise with import-export power, including
foreign trade (industrial trade) company, foreign-invested enterprise and
domestic-invested production enterprise with import-export power.
     (3) For the domestic equipments, raw materials, parts, components, packing
materials sold by outside enterprises to inside enterprises and transported into export
processing zone for their use, and capital construction materials (excluding water,
power and gas) for infrastructural construction and production and office houses
construction of production enterprises and administrative departments, the outside
enterprises may apply to the taxation bureau for tax rebate or exemption by the goods
declaration for exportation (special use for export rebates) issued by the customs and
other effective export export rebates vouchers.
     For consumption goods and traffic transportation tools sold by an outside
enterprise to inside enterprises and administrative departments and transported into
export processing zone for their use, the customs shall not issue goods declaration for
exportation (special use for export rebates), and the taxation bureau shall not rebate or

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exempt tax.
     For the import equipments, raw materials, parts, components, packing materials
sold by outside enterprises to inside enterprises and transported into export processing
zone for their use, and capital construction materials, the customs shall not issue
goods declaration for exportation (special use for export rebates), and the taxation
bureau shall not rebate or exempt tax.
     (4) For the goods enjoying tax rebate or exemption treatment stipulated in
Section (3) and sold and transported into export processing zone by foreign-invested
enterprises enjoying export goods tax exemption treatment, the tax exemption policy
shall be executed by the end of 2000.
     (5) For the goods sold by outside enterprises and transported into export
processing zone, export sale invoices shall be made out without exception, VAT
invoices or plain invoices shall not be made out.
     (6) For the goods enjoying tax rebate or exemption treatment and sold by outside
enterprises to inside enterprises and transported into export processing zone for their
use, outside enterprise shall complete goods declaration for exportation, in which, the
bar of “transport mode” shall be written as “export” (the full name of “transport
mode” is “export processing zone ”).
     (7) For the goods processed or produced by inside enterprises in the export
processing zone, when they are directly exported or sold to inside enterprises, such
goods shall enjoy VAT and consumption tax exemption. For the goods exported by
inside enterprises, such goods shall not enjoy tax rebate.
     (8) When inside enterprises entrust outside enterprises to process their products,
such goods shall not enjoy tax rebate or exemption without exception.
     (9) Inside enterprises shall pay local taxes in accordance with laws and
regulations in force.
     (10) Domestic enterprises in the zone shall pay income tax in accordance with
income tax laws and regulations in force, foreign-invested enterprises in the zone
shall pay income tax in accordance with the income tax policy for economic and
technological development zones.
     (11) Capital construction materials purchased by inside enterprises and
administrative departments from outside suppliers shall be applied to local customs
and taxation bureau. Capital construction materials purchased within the checked
amount can go through check and acceptance formalities in the export processing
zone by the customs. After supervision of the customs, relevant enterprises can apply
to the taxation bureau for tax rebate or exemption by the goods declaration for
exportation (special use for export rebates) issued by the customs.
     (12) For the water, power and gas consumed by inside enterprises for producing
export goods in the export processing zone shall enjoy their VAT rebates. Inside
enterprises shall by the season complete Application for Tax Rebates for Water, Power
and Gas Consumed by Inside Enterprises for production (refer to the appendix), and
submit the following vouchers to the relevant taxation bureau for tax rebates:
     1. VAT invoices (rebate receipt) made out by water supply, power supply and gas
supply companies;

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      2. Bank settlement vouchers for paying water, power and gas expenses (copies
with bank stamp).
     (13) The rebated tax amounts of water, power and gas shall be calculated
according to the following formula:
      Rebated tax amount = input amount indicated in the VAT invoice × tax rebate
rate
      The tax rebate rate of water, power and gas is 13%. If the suppliers collect VAT
in a simple way, the tax rebate rate shall be the tax collection rate.
      (14) If water, power and gas purchased by inside enterprises from outside
suppliers are used for leased or transferred workshops, tax rebate shall be rejected. In
case such tax rebate is handled, the inside enterprises shall report to the relevant tax
bureau and pay back the rebated tax in the next month after such lease or transfer
occurs.
      (15) For the water, power and gas sold and transported by outside enterprises to
the inside enterprises, the outside enterprises shall make out VAT invoices to the
inside enterprises, not plain invoices or special export invoices.
      (16) The registration, approval and management of water, power and gas tax
rebates for inside enterprises shall be in the charge of the taxation bureau responsible
for export rebates. The taxation bureau responsible for export rebates shall by the
season ckeck the real water, power and gas consumption conditions of the export
processing zone, and clear the water, power and gas tax rebates of the previous year
after the year end.

III. Preferential policy concerning the administration of entry and exit:<top>

      1. If relevant proof documents are provided, high level talents of foreign nationality and
investors can obtain “more than once” F visa valid over 2 years and less than 5 years, or residence
permission valid more than 2 years and less than 5 years, application times are not limited. People
of foreign nationality with large amount of investment or great contribution to China, having
provided proof documents, can apply for permanent residential qualification (green card). People
holding residence permission and green card need not manage visa.
      2. All Taiwan businessmen set up factory in the Mainland and higher management and their
accompanying spouse and children can obtain endorsement within 5 years; Taiwan residents work
in the Mainland can apply for residence endorsement based on Employment Permit or labor
contract; For the sake of investment, people enter China in advance for investigation, consultation,
signing contract, can manage Exit and Entry one year valid more than once Visa if provided letters
of relevant department.
      3. If meeting the following conditions, Taiwan residents are approved to settle down in
Hunan.
(1) If investing in Hunan and the tax payment of the previous year was above 500,000 Yuan or the
investment amount was more than 2 million Yuan.
(2)Talents in the fields of science and technology, education, culture, medical science, agriculture
and so on urgently need by China and their spouse, children, and proved by national ministry of
personnel or State Bureau of Foreign Experts Affairs.
4. People work in Foreign Funded Enterprises from other provinces with more than one year
temporary residence in Hunan, and have to visit Hong Kong and Macau for business events can


                                                115
apply for relevant procedures in the Exit and Entry Management Department of the Public
Security Organs in the place where the enterprise located, after local Public Security Organs
examined by sending letter to the area where the applicants permanently reside, issued the
certificate according to the law. The examination letter is valid for one year. If the applicant
applies for it again with the valid people, examination letter shall be not issued.
IV、Several Opinions of the State Council on Further Utilizing Foreign Investment(Guo Fa
[2010] No. 9)
Utilizing foreign capital is the important content in China's basic state policy of opening up to the
outside world. China has positively been attracting foreign investment and promoted industrial
upgrading and technical progress since the opening up, with foreign-invested enterprises being the
important component of the national economy. At present, Chinese advantage over utilizing
foreign capital remains obvious. For the purpose of raising the quality and level of utilizing
foreign capital and better giving full play to utilizing foreign capital in boosting scientific
innovation, industrial upgrading and regional coordinated and balanced development, the
following opinions are hereby put forward:
(I) Optimizing the structure of utilizing foreign capital
(1)      The Catalogue for the Guidance of Foreign Investment Industries shall in accordance with
the economic growth of China and combining the national industrial restructuring and
revitalization plan be revised to expand the open areas and encourage foreign capital to high-end
manufacturing, high and new technology industry, modern service industry, new energy and
energy-saving and environmental protection industry and "High-polluting, high-energy-consuming
and resource-dependent" and low-level and overcapacity expansion projects strictly restricted.
(2)      The policies and measures in the national industrial restructuring and revitalization plan
shall be simultaneously subject to qualified foreign-invested enterprises.
(3) If foreign- ivestment public benefit and infrastructure projects are under the same condition,
land supply shall be given priority. As to operation projects such as commodity house, tourism
land, entertainment and industrial land should make bidding, but if the condition for investment
promotion are the same, land supply should be given priority to, simplified program and open up
green channels
(4) Foreign investment in hi-tech enterprises shall be encouraged and hi-tech enterprise
recognition improved and perfected.
(5)      Domestic and foreign enterprises shall be encouraged to strengthened R&D cooperation
and qualified foreign-invested enterprises supported to cooperate with domestic enterprises and
research institutes to apply for the national scientific development projects and innovation
capability construction projects and the recognition of the establishment of the national technical
center.
(6)      Transnational companies shall be encouraged to set up such functional institutes as
regional headquarters, R&D centers, purchase centers, finance management centers, settlement
center and cost and profit calculation centers within China. No tariffs and value-added tax and
consumption tax of import shall be levied on the products for scientific development use indeed
needed by qualified foreign-funded R&D centers prior to December 31, 2010. and
(7) Supporting policies shall be implemented and perfected to encourage foreign investment in
the service outsourcing industry so as to bring in advanced technologies and management
experience to raise the international competitiveness of China's service outsourcing industry.
(II). Guiding foreign capital to central and west China and increase of investment
(8)       In accordance with the amendment of the Catalogue for the Guidance of Foreign
Investment Industries, the Catalogue of Priority Industries for Foreign Investment in the
Central-Western Region shall be supplemented to add the items of labor-intense projects and
encourage foreign businessmen to develop the labor-intense industries qualified for environmental
protection in the central and western region.
(9)      The preferential policies of enterprise income tax shall be continuously subject to qualified
domestic and foreign-invested enterprises in the central and west China to maintain the good
momentum of growth in attracting foreign investment in the region.
(10) The shift of foreign-invested enterprises in the east to the central-western region shall be
strengthened the support in policy opening and supporting technologies and funds, and
simultaneously, administrative services perfected to provide facility in handling such procedures
as industry and commerce, taxation, foreign exchange and social insurance and encourage and

                                                 116
guide foreign-funded banks to set up branches and conduct business in the central and west China.
(11) The east and the central-western region shall be encouraged to be market-oriented to
jointly construct development zones in the principle of complementing advantages each other,
industrial combination and jointly sharing profits in the forms of mandatory management and
investment cooperation.
(III). Promoting diversification of utilizing foreign capital
(12)Foreign capital shall be encouraged to participate in the restructuring and merger of domestic
enterprises by means of equity participation and acquisition, A-share listed companies supported
to bring in domestic and overseas strategic investors, regulations s made for foreign capital
participating in domestic securities investment and acquisition and antitrust scrutiny executed
according to law and the establishment of the system of foreign capital merger and acquisition
security scrutiny sped up.
(13) Qualified enterprises shall be continuously supported to utilize overseas capital market to be
listed in overseas market and make full use of two markets and two kinds of resources to
constantly raise competitiveness in accordance with the national development strategy and
self-development.
(14) The pilot project in utilizing foreign capital to set up the minor enterprises guarantee
companies shall be advanced and foreign businessmen encouraged to invest to set up investment
enterprises, private equity and investment funds proactively utilized and exit mechanism
perfected.
(15) Qualified foreign-invested enterprises shall be bolstered to publicly issue stocks, corporate
bonds and medium-term notes within China to widen financing channel and financial institutes
guided to continuously strengthen support of credit loan for foreign-invested enterprises. The scale
of overseas subjects issuing Renminbi within China shall be steadily expanded.
(16)The projects of encouragement and permission in the Catalogue for the Guidance of Foreign
Investment Industries with the total investment (inclusive of increase of capital) below USD300m
shall be approved by local governments except those approved by relevant departments under the
State Council as prescribed in the Catalogue of Investment Projects Approved by the Government.
Relevant departments under the State Council may authorize the local government to approve their
responsible items under the premise of strengthening supervision except that laws and regulations
specifically provide the projects shall be approved by relevant department under the State Council.
The establishment of foreign-invested enterprises in the service area (exclusive of finance and
telecommunication service) shall be approved by local government according to relevant
provisions.
(17)      Approval contents shall be adjusted and approval procedures shall be simplified to
narrow the approval and check scale to the maximum and strengthen the transparency of approval.
Full clearance of approval items related to foreign investment shall be made to shorten the time of
approval, improve the approval mode, gradually conduct the format approval of contract and
article of association of foreign-invested enterprises across the country on the basis of conducting
pilot program and summing up experience and strongly promote online administrative licensing
and regulate administrative acts.
(V).Creating a good investment environment
(18)Development zone development shall be regulated and promoted to exert the carrier and
platform role of development zones in institutional innovation, scientific leading, industrial cluster
and land consolidation. Qualified provincial development zones shall be supported to upgrade and
qualified national and provincial development zones supported to expand districts and adjust the
locations of districts, with the policies and measures to speeding up the construction of border
economic cooperation zones to formulate.
(19) Foreign exchange management of foreign-invested enterprises shall be further perfected and
the procedures of foreign exchange capital settlement for foreign-invested enterprises simplified.
The foreign-invested enterprises operating by law but temporarily failing to make contribution on
time for lack of capital shall be allowed to extend the deadline of contribution.
(20) Investment promotion shall be intensified to strengthen the promotion and introduction to key
countries, regions and industries to publicize Chinese policies of utilizing foreign capital and
positively participate in multilateral investment cooperation to combine "absorb foreign capital"
and "expand export" to boost the constant improvement of cross-border investment policy
environment.


                                                 117
Relevant departments under the State Council and local people's governments at all levels shall
reach an uniform consensus, adhere to the guideline of positively and effectively utilizing foreign
capital, insist on self-independence, select foreign capital amid the best and boost the combination
of "absorb foreign capital" and "bring in advancement" to constantly raise the quality of utilizing
foreign capital, and also sum up the experience of reform and opening up and combine the new
situation and requirements to further enhance reform and innovation and raise the facilitation to
create a more open and optimized environment of environment so as to fully raise the level of
utilizing foreign capital.

V.Hunan Provincial People's Government’s Comment on Speeding up the Development of
Service Outsourcing Industries<top>

Service outsourcing is one of the major fields in industry shift in the world. To seize the
opportunity that outsourcing is shifted from abroad to China, and from the coastal area to the inner
provinces, enterprises are encouraged to take outsourcing to promote its development in Hunan.
Importance is attached to the following points:

(I)、Keep a clear mind to specify the task and target of service outsourcing industries.
(1)、Clearing our mind. Acceleration of outsourcing is of great significance in building the
resource-saving and environmental-friendly society, and making people wealthier and the
province stronger. It is our strategic alternative in the renewed round of opening-up process; it
provides an important way to transforming the mode of economic growth, optimizing the utilize of
foreign investment and export making-up, and create more jobs; it is a key step in achieving the
new-type industrialization and developing modern service industry. Departments at different levels
should further clear mind to speed up outsourcing by listing it in their agenda and taking effective
measures.
(2)、Setting the target. Lead by the 3+5 city group with Changsha at the core and covering the
  whole province the outsourcing base, with international competitiveness, will turn the province
  into a key area where enterprises and experts gather to handle the service outsourcing from all
  over the world, with the output amount and staff reaching RMB 2 million Yuan and 100,000
  respectively in 5 years.
(3)、Specifying the task. Based upon Changsha city, the outsourcing park will draw in services
  from all over the world, with the foreign one as the focus, by fostering a group of native and
  famous enterprises. Headquarter and research center of multinational firms are welcomed, which
  can not only take global service but also sign contact with China. The Japanese market should be
  strengthened, market should be widened to Europe and USA, Hongkong should be used as a
  strategic bridgehead to bring Hunan to the international track. In accordance with the
  requirement of global outsourcing and industrialization in Hunan, such categories should be
  focused upon as Engineering equipment manufacturing, information communications, modern
  logistics, creative industries, finance and insurance, biomedicine, health, radio and television
  media , distance education, financial background services, animation production, software
  development outsourcing, R & D outsourcing, data processing and accounting.
(II)、Create service outsourcing model parks in the key region.
(1). We should try to choose outsourcing model parks. Hunan Provincial Department of
Commerce, together with Information Department and Technology Department, is entitled to
choose the parks from the qualified ones at the province-level and the state-level.
      We
(2)、 should try to optimize the distribution of the parks. The state-level park will be unitized as
the main body when we make choice and take measures. We will prepare enough for infrastructure
construction, such as land, telecommunication and traffic, in this way, resources in term of
technology, manpower and policy preference will concentrate. We encourage the governments at
the prefecture level to establish outsourcing bases with individual preference in the province-level
development zones, thus to bring into full play of the regional strength.
(3)、We should offer more fund to build infrastructure in the model park. Discount loan will be
distributed to infrastructure construction, meanwhile, the local government will appraise the
subsidiary projects and provide corresponding subsidy to qualified ones.
(4)、We support the building of public service platform in the model park. We will try to obtain

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support from the central government and provided certain amount of fund to help purchase and
operation of the platform.
(5)、We will improve telecommunication facilities to provide fine data network. We will try to
build an international interface in Changsha, motivate the telecom operator to better the bandwidth,
optimize data traffic, in order to supply the outsourcing enterprises with efficient, stable and
diverse services.
(6)、We will introduce famous international developers to take part in design, construction and
investment attraction. With their advantages in construction, administration, service and
investment promotion, we will speed up attracting a group of domestic and foreign large-scale
outsourcing firms. To meet the requirements of high-level and forward-looking firms, we will
borrow advanced experiences to build office buildings, leisure equipment, fitness and
entertainment facilities. We will take into consideration the working population and traffic
condition to plan the traffic system in and near the model park. .
(III)、Increase our effort to foster and strengthen the service outsourcing enterprises:
       We
(1)、 will try to appraise and support the outsourcing enterprises. The provincial department of
commerce will invite the department of information and technology to evaluate and choose the
enterprises which can enjoy the preferential policies listed in this report. Those hi-tech or software
enterprises whose outsourcing service output reach USD500,000 annually or whose outsourcing
service accounts for 30% in the main business are automatically regarded as outsourcing
enterprises.
(2)、We will offer preferential tax policy to the outsourcing enterprises. For those enterprises
which own independent intellectual property right and meet corresponding requirement in the
income tax law, the income taxation rate is dropped to 15%. The software enterprise newly built
in China, is, since its first income is earned, exempted from full income tax for the initial 2 years,
and from half income tax for the subsequent 3 years. Furthermore, its value-added tax is returned
after levied, and will not be regarded as tax-related income if used in software research and
reproduction.
      We
(3)、 will introduce large-scale outsourcing enterprises from all over the world, especially those
multinational ones who can not only handle global contracts but also sign contracts with China, to
improve the level and scale of our outsourcing service. We encourage the small and medium scale
firms in Hunan to grow into international ones by cooperating with large scale ones in the world in
terms of syndication, purchase and regrouping.
(4)、We encourage enterprises to go through relevant global appraisal and obtain certificate. We
offer less than 50% of appraisal cost to those which have managed to obtain CMMI, PCMM,
ISO027001/BS7799, IS020000 and SAS70. Furthermore, we offer fund of less than RMB 500,000
Yuan to help those enterprises to maintain their certificate in accordance with their maintenance
cost.
(5)、We encourage the outsourcing enterprises to speed technical research and innovation. The
research expense for developing new technology, new product and new processing is to be
deducted in 50% of its amount if it does not turn into the intangible asset. It is to be amortized in
150% of the asset cost if it has turned into the intangible asset.
     We
(6)、 encourage the outsourcing enterprises to carry out technical transfer and innovation. Those
whose technical transfer worth less than RMB 5 million Yuan in 1 taxation year are exempted
from income tax. For the amount which surpasses RMB 5 million, the enterprises are exempted
from half income tax. The enterprise which purchases and uses the environmentally-friendly,
water & energy-saving and safe-work equipment prescribed by the state is allowed 10% of the
equipment cost from its tax payable in the same year, or in the subsequent 5 years. The purchased
software, if meeting corresponding requirement, can be taken as fixed asset or intangible asset. Its
depression or amortization can be reduced to as short as 2 years.
(7)、We encourage the outsourcing enterprises to step into the global market. We will pay for their
  stands when they are organized by the provincial department or state authority of commerce to
  attend domestic and international fair or exhibition. We will held outsourcing forum and send the
  outsourcing enterprises to conference in the world. We will organize the outsourcing enterprises
  to cooperate with foreign partners, take part in bidding and tendering. We will motivate the
  domestic enterprise to establish braches in Japan, USA and Europe to draw international
  business.

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(8)、We will try to wide the market entrance. We will offer convenience to prior approval and
registration in the industrial and commercial administration. The industrial and commercial
administration should appraise the business which does not involve prior approval with such
words as “this enterprise is engaged in… in terms of outsourcing service”. The relevant authority
should simplify the procedure for the business which involves prior approval. After the enterprise
has obtained approval, the industrial and commercial administration should present its agreement
with such words as “this enterprise is engaged in… in terms of outsourcing service”.
(9)、We will carry out brand policy. We will select a group of native enterprises which enjoy
  considerable profit, strong innovative capability, proficient managing skill, distinctive advantage
  in service and huge market potential and turn them into famous brands by supporting them with
  market, technical and fund resources. Those enterprises which try to form independent brand will
  be given preferential policy.    。
(IV)、Improve education to foster and introduce service outsourcing experts.
(1). Taking advantage of strong human power in Hunan, we will endeavor to train a group of
technicians who meet the outsourcing market requirement, and to foster a group of open-minded
experts who acquaint themselves with the international rules concerning the outsourcing, and to
bring up a group of professional who have innovative capability. Based upon research in and
evaluation of the requirement of outsourcing experts, we will stipulate training target and plan.
Moreover, we will progressively establish and improve the system, which, with Hunan
characteristics, involves expert training and introduction, at-the-job education, and which connects
the outsourcing park with enterprises, and coordinate between the enterprises and
higher-education institutions. We will try to acquire fund from the state government, meanwhile,
the provincial government, the prefecture government and the park authority will work together to
fund the personnel training.
     We
(2)、 will build personnel training bases. Depending upon Hunan’s educational strength, we will
make use of the state-level developmental zones in Changsha and zhuzhou as bases to establish
training institutions with enterprises, universities and the outsourcing parks as the main body. We
will offer a certain amount of fund and the enterprise will employ the excellent graduates who
have passed training program.
(3)、We will attach great importance to offering educational program to personnel from the
outsourcing enterprises and provide subsidy according to corresponding official documents, thus
reduce the cost of enterprises. At the same time, we will make efforts to formulate policies and
measures to send the outsourcing experts abroad for field training.
(4)、We will encourage the institutions of higher education, vocational schools, scientific research
institutes to work with the outsourcing enterprise and establish internship bases. We will motivate
the universities and colleges to initiate disciplines in and offer programs in outsourcing service.
We support those private schools engaged in training outsourcing personnel. We will offer bonus
to those training institutions which, qualified by the educational authority in software and
outsourcing services, send graduates to the native enterprises. We will offer convenience in terms
of evaluation to those training institutions which is solely funded by an outsourcing organization
at home or abroad, or is established in a way of cooperation between the organization and
universities or enterprises.
(5)、We will go to great lengths to recruit outsourcing experts from all over the world. We will
create an expert-attraction mechanism in which demand corresponds with supply. We will offer
preferential policies in housing, social insurance, children’s going to school, and spouse’s
employment. The consultancy and labor expense paid to experts, overseas Chinese professionals
and the specialists who enjoy the special state allowance for specific projects can be included into
cost.
(V)、Promote the supporting service to create a favorable environment for the service outsourcing
industry:
      We
(1)、 will improve leadership by establishing a special committee with a provincial-government
leader as the director and corresponding functional authorities as the members. There is an office
(Department of Commerce of Hunan Province) directly under the committee. Regular meetings
will be held among the functional authorities to conduct research concerning urgent issues of the
outsourcing. Such committee should also be organized in the prefectures and cities in the province
according to their actual conditions.

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(2)、  Hunan industry-shift fund should be offered for the outsourcing service. Led by the provincial
government and subsidized by the prefecture-level government, public service platform, public
technology platform and public training platform should be set up in the base cities including the
model parks, supporting facilities and investment environment should be optimized, the policy
system favorable to the development of the outsourcing should be improved.
(3)、We will make greater efforts to safeguard intellectual property right by cracking down on law
  violation, thus offering a good environment for the outsourcing development. We will motivate
  the enterprises to develop software and conduct research in independent intellectual property.
  The outstanding enterprise may be listed in the catalogue of the provincial ones for experiment
  and model. We will offer special fund to those intellectual property projects in which
  considerable social and economic benefits have been achieved. Based on the Intellectual
  Property Right Violation Report Service Center, we will encourage complaining stations to be set
  up in the model parks to collect and treat specific cases. We will try to build an environment of
  trust and credibility in which the government lead, the society supervises, and the staff
  self-disciplines.
  (4)、WE will widen the channel of financing. We will give priority to the outsourcing enterprises
  in offering science-oriented loans and expand cooperation between the state banks and Hunan.
  We will endeavor to conduct research in effective security mechanism, encouraging the
  export-oriented credit insurance companies to provide risk protection and facilitate financing for
  the small and medium scale outsourcing enterprises in Hunan. We will encourage risk investment,
  private investment and foreign investment into the outsourcing services. We will encourage the
  advantageous enterprises to purchase other listed firms and regroup assets.
(4)、We will facilitate foreign exchange receipts and disbursements. The foreign exchange
  administration, in light of laws and regulations concerned, should offer policy guidance and
  service actively. The outsourcing enterprises may open regular account into which foreign
  exchange income can be deposited. When in need, the enterprise can purchase foreign exchange.
(5)、We will try to build Hunan outsourcing information website, linking us to the corresponding
website of the state and in the world. In this way, we are able to publicize our advantages in
personnel and education, outsourcing capability, scheme, policy and environment, thus conducive
to fame in the international market. We will bring into full play the role of the overseas Chinese
students to establish network outside China.
(6)、We will encourage the intermediary agencies to play its role in forming the outsourcing
  market, stipulating trade regulations, offering human resources, securing credibility, and
  protecting intellectual property right.
(7)、We will try to offer convenient channel for entrance and exit. We will facilitate the procedure
when the Chinese employed in the outsourcing enterprises go abroad, while we will put in a prior
position issuing expert card, employment card and residence card to foreign staff employed in the
outsourcing enterprises.
  (8). The statistics department should, combing the local conditions, collect data, conduct analysis
  and research in outsourcing trend, and provide scientific evidences for decision-making.



VI. Hunan Provincial People's Government’s Comment on Undertaking Industrial Transfer
and Promoting process trade<top>

 Taking Industrial Shift and Promoting process trade is an important means in adjusting to
 economic globalization and taking part in international division of labor, an effective way to
 optimizing industrial setting-up and upgrading industries, a major force to realize rapid growth
 of economy. In order to develop open economy, to face the inward shift of industries from
 foreign countries and coastal areas, and to promote process of the new-type industrialization,
 importance is attached to following points:

(I)、Rise the task of undertaking industrial transfer and developing process trade to a strategic

1、Seize the development opportunity. We are now confronting a major opportunity that the

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economic globalization speeds up, the manufacture industry with the process trade as the main
content transfers, the state policy concerning process trade changes significantly, and mid & west
China is encouraged to carry out process trade. Governments at different levels should try to
understand the strategic role of process trade in opening up Hunan and making the people wealthy.
We should increase responsibility to put in an urgent way the process trade in a important position,
because process trade is an essential measure in promoting industrialization and upgrading and in
offering more jobs, technical skill and income, an channel in expanding international trade and


(II)、Formulate the target , principle, and frame a plan in a scientific way.
1、Aggregate target and principle. We will carry out the ideas of scientific development outlook
and try to build infrastructure and supporting facilities. We will use the industrial parks,
export-oriented process zones, bonded logistics parks, and process trade zones as the bases to lead
costal area’ process trade industry shift into Hunan. We will improve cooperation between Hunan
on one hand and Hongkong, Macao and Taiwan on the other hand to help form a reasonable and
advantageous pattern with regional characteristics. We will endeavor to raise the proportion of
process trade in the total amount of export to 30%., exceed USD 20 billion.

2、The fundamental principle. We will combine policy guide with market mechanism to bring into
 full mobilize the enthusiasm of the enterprises. We will stick to the rule of rapid and sustainable
 development in takeover environmentally friendly and resource saving projects. We will combine
 regional characteristics with industry upgrading. We will place equal emphasis on scale
 expansion and advantage utilization. While introducing labor-intensive and asset-intensive
 projects, we will raise the process trade to a high level of value-added technology.

 3、 Formulate the strategy in a scientific way. Based on the overall plan for industry development,
 we should combine use of land with the development of the industry zone to work out the
 integrated scheme of process trade, specifying its direction of development and regional
 distribution。

Direction of development: we will try to introduce business in a vigorous way and accept process
trade shift from the advanced country and costal areas. We will invite famous enterprises with big
market and advantageous technology to conduct process trade in Hunan. We will give prominence
to machinery and equipment, iron and steel, non-ferrous metals, electronic information,
biomedicine, electric locomotive, food processing and other advanced industries, and urge them to
make use of the international market to introduce key spare parts and raw material, and expand
export in terms of process trade. We will bring into full use of the abound human resources in
Hunan in attracting labor-intensive industries, such as textiles, clothing, plastics, toys, furniture,


Regional distribution: On the present industry layout and advantage, we will try to determine
focus in each prefecture-level city. Most of industries shift from Pear River Delta and some from
Yangtze River Delta. And we will use the 3 cities in southern Hunan as the intermediary bases.
Moreover, we will speed interaction between Yangtz River Delta and Hunan in industry projects.
We will, during the course of building the energy-saving and environmental-friendly city
group(Changsha, Zhuzhou and Xiangtan), introduce hi-tech-intensive and capital-intensive trades
into Changsha, Zhuzhou, Xiangtan+Yueyang, Changde, Yiyang, Loudi and Hengyang as well as
the aspects of r



   We
1、 will try to create an effective and convenient customs proceedings. We will open more ports
 such as railway, railway, waterway and aviation and work out a complete system made up of both
 class A and B ports. We will build E-ports, offering network monitoring and service integration.
 We will turn paper guidance book into E-book for class B enterprises, realizing online reporting
 and online services.
We will actively promote customs cooperation with Pearl River Delta and Yangtze River Delta to

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build the customs clearance platform characterized by "territoriality declaration and port
clearance” and to expand the scope of application. We will dredge port transfer channels to include
Hunan into speedy customs clearance system in Guangdong, Hong Kong and Macao. We will
implement eligibility confirmation after an enterprise moves into Hunan. It will be evaluated the
same kind as in Guangdong. The original imported equipment is allowed to use after it is brought
to Hunan and the supervision period can be calculated in a continuous way.

Inspection and quarantine department should take full advantage of the Pan-Pearl River Delta to
promote the entry and exit mechanism. If the value of raw materials accounts for more than 50%
of the entry goods in the processing trade, reduce charges. The inspection fee, charged for import
process trade goods with exported, is 30% lower. The quality examination fee is free when the
entry goods which is demand no test. The inspection fee, charged for processed goods when they
are exported, is 30% lower. At the same time, we adopt a modest relaxation in the first piece
detection and type test, and give a period for rectification. We loosen registration permission for
those export enterprises which do not involve safety, health, environmental protection
requirements.
We speed up to set up new customs, inspection and quarantine offices. In order to bring
convenience to the local enterprises, we will set up additional customs houses and quarantine
offices in the concentrated customs operation. We will try to set supervision station to conduct
on-the-spot business in Yongzhou City by the end of September 2008. We will try to obtain
support from the General Administration of Customs and AQSIQ to establish customs and
quarantine offices in Changsha, Loudi, Xiangtan, Yiyang. Nowadays, assisted by staff from the
local government, officers from the customs and quarantine offices are on duty.

2、We will speed up the development of logistics and mutual support among industries. We will
build logistics centers in Changsha, Zhuzhou and Xiangtan, Yueyang and Hengyang to introduce
and cultivate large modern logistics enterprises. We will improve transportation infrastructure to

We will cooperate more with logistics hubs in coastal areas to improve efficiency in handling
customs affairs and reduce costs. Personnel from the port, the customs house, the inspection and
quarantine department, the commerce administration, the economic commission, the traffic
department, railways will jointly form a working group to strengthen coordination by opening up a
thorough transport route made up of railway and waterway and offering 5 regular trains
commuting between Changsha and Shanghai, Changsha and Guangzhou, Changsha and Shenzhen,
and gradually increasing the stops along the way. More liners will be set up to serve between
major ports in our province on one hand, between Hunan and the coastal ports on the other hand.
We will try to reform management of the Hunan-Hongkong-Macao" train to improve its service
for high-value and time-sensitive goods.
Focusing on enhancing the local support, we will vigorously develop the auxiliary industries of
the processing trade, nurture industrial clusters, extend the industry chain and exert effects of
aggregation. We will foster special markets of competitive industries and industries with
characteristics; we will build markets for intermediate products, components, parts, fittings and
other means of production. We will improve the procurement rate in the province and narrow the
enterprises procurement radius to reduce purchasing costs.

3、We will improve the processing trade cities and create new approaches. We will take advantage
of the state policies to improve the infrastructure, service system and supporting capacity in
Chenzhou, Yiyang, Yueyang and Yongzhou cities which transfer the processing trade in a
ladder-like sequence. We will report to the Ministry of Commerce to apply for more transfer
bases in Hunan. We will select 10 key counties to undertake industrial shift.
We will choose a group of state-level model transfer parks to improve their infrastructure, public
facilities, such as energy supply, environmental protection, logistics, customs clearance, and
public service platform. We will build more standard and intelligent workshops.
We will vigorously build the special supervision zone. While building the export processing zones
in Chenzhou, we will make great efforts to apply for another two in Changsha and Yueyang. We
will try to offer overlay bonded logistics service in Chenzhou zone, and to build Changsha Jinxia
Bonded Logistics Center. We will offer policy which permits tax rebate for the enterprises after

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they settle down in the zones. We will try to solve the problem of one-day-trip outside the territory
for the enterprises in their good transfer.
We will explore the new approaches of industry transfer. We will experiment with the
zone-development model with the trade associate and enterprises as the main body. Forms of
independent legal person will be introduced to practise the market-oriented management. We will
encourage the industry transfer cities and counties to cooperate with the coastal areas to develop


4、We should ensure land used for industry transfer project, especially the processing trade. We
will allocate 15% of the annual land plan for key projects in the processing trade. We will offer
prior approval for the major projects which have actually introduced domestic investment worth
RMB 100 million and more, or foreign investment worth USD 10 million and more. We will make
full use of barren, hilly land, the idle land of various types in urban and rural areas for the industry.
transfer projects.
Among the land-use right transfer fee paid by the industrial transfer projects, one part will be kept
by Hunan province in accordance with relevant regulations of the state for land development, the
park infrastructure and public service platform construction.

5、We should build a professional team for the processing trade. We should carry out training for
personnel at the management sector, intermediary organizations and enterprises. Leaders at all
levels should adjust to the trend of economic globalization, set an example in studying the
processing trade, master the processing tr
Government at all levels as well as the Labor and Social Security Department should arrange
special funds to conduct vocational training for the migrant workers. A one-time vocational
training subsidy should be granted to migrant workers who register as unemployment when
participate in vocational training. A one-time subsidy for vocational skills identification should be
given to the migrant works who have obtained professional credentials. The standard of 1,000
Yuan per person should be adopted to subsidize rural poor workforce who take part in the

We encourage the rural surplus labor force and technical college students to find jobs at local
industrial parks. We encourage tertiary institutions to set up processing trade programs. We
encourage industrial parks to offer technical training schools. We encourage the colleges to
cooperate with enterprises in terms of orientation training and other forms, in order to provide


6、
We should standardize and simplify the procedures in approving the industry transfer projects. We
should further grant the trade-approving right to the export processing zone, and gradually
authorize the commercial departments in the counties where processing enterprises agglomerate.

We should seriously implement The Administrative Procedures of Hunan Province, specifying the
proceeding and deadline for both the administrative licensing process and non-administrative
licensing affairs. With complete documents, procedures of the processing trade approval,
registration and change should be finished in one day. Strict implementation of relevant
regulations and policies should be adopted to handle all the procedures. It is forbidden to collect
extra fees, or force the enterprises to pay any disguised fees. Authorities all levels should intensify

We should take intensified measures to introduce scaled industrial projects and focus on their
growth by giving priority to them in terms of land allocation, road construction, supply of


7、We will improve the auxiliary policies, offering more support in tax, finance, insurance and

Special fund should be allocated from the provincial 2009 budget to transfer the processing trade.
The fund will increase year by year for the public service platform construction, the technology
innovation in the enterprises, investment attraction, import increase in the enterprises, and bonus.
The Provincial Department of Finance and Department of Commerce of Hunan Province should

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formulate a specific rule for effective use of funds. According to the needs of cities and prefectures,

Tax: the tax department at all levels should conscientiously perform their functions in terms of
levy, Exemption, Credit and Rebate. We should take the initiative to contact with the processing
trade enterprises to promulgate tax policy. We should encourage the enterprises to raise their
level and expand their scale through technological transformation. The policies concerning income
tax relief, exemption of import tariffs and value-added tax should be seriously fulfilled for the
China-
Finance: We should open a “Green Passage” of credit loan to increase appropriate amount of fund
and reduce mortgage requirement for eligible enterprises. We should lower the interest rate in
accordance with the benchmark interest rate for those enterprises which boast market share and
profits. We will set up credit guarantee system for small and medium-sized enterprises at the
provincial and municipal levels. We encourage the security agencies to offer loans for the
processing trade enterprises.
Insurance: We will focus on strengthening export credit insurance and, in the first place, include
the processing trade enterprises into the system. We will meet their demand for the credit limit. We
will arrange a green channel for compensation claim by carrying out the rapid implementation of
compensation or beforehand compensation. We support small and medium-sized enterprises in

Foreign exchange: We will satisfy the requirement of the export-oriented processing enterprises
for foreign exchange. We should improve management of foreign exchange accounts by
accelerating approval of use of foreign exchange. We encourage the processing trade enterprises to
write off deductions. We will weaken Front Desk auditing and strengthen subsequent supervision.


(IV)、We will strengthen leadership.

1、We should create a sound leading mechanism. We will establish a special group to guide the
transfer of the processing trade industry, with a key member from the provincial People's
Government as the director and heads of the relevant functional departments as the group
members. An office (Department of Commerce of Hunan Province) is set under the leadership of
the group to deal with routine affairs. Regular joint meetings will be held to improve policies and
measures, deal with registration of key projects, and try to solve new problems. In cities and
prefectures, counterparts should also be set up, leadership ensured, and the corresponding


2、We will improve the incentive mechanism. We will grant bonus of RMB 100,000 to 200,000 to
the local People's Government for introducing industrial transfer projects with in-place investment
(cash) of USD 10 million to 50 million. We will reward the local government with RMB 300,000
to 500,000 for introducing industrial transfer projects with in-place investment (cash) more than
USD 50 million. The bonus or reward is set aside from the province's special fund for the transfer

We encourage market-oriented intermediary investors, social organizations and social investors to
introduce projects. They will be rewarded according to the type of the project and the amount of
money in place by the local government. Those who have made outstanding contributions will be
rewarded by the provin

3、We will set up key enterprises contact mechanism. The mayor or prefecture head will himself
be responsible for contact with the major enterprise whose export amount meets or exceeds a
certain standard. Relevant functional departments should also be assigned to offer corresponding
service and classified guidance, to solve problem, and to remove difficulties. Changsha Customs is
required to set up provincial key enterprises contact mechanism and to strengthen the tracking


4、We will set up duty examination mechanisms. Governments at all levels should endeavor to
stipulate working plan and program for transfer of the processing trade, and to put them into effect.
Chenzhou, Yueyang, Yiyang, Yongzhou as the key cities to introduce the processing trade, should

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focus continuously on the task and make a deputy leader in charge of the work. The Provincial
Department of Commerce should pay close attention to making specific target for the industrial
parks and the prefecture-level cities in terms of industry attraction and export promotion. A
comprehensive examination will be held to check them at the end of the year and reports will be
released.

5、We will set up supervision mechanism. The Provincial Development and Reform Commission,
Provincial Economic Commission, Department of Finance, the Provincial Labor and Social
Security Department, the Department of Land and Resources, the provincial SASAC, bureau,
Provincial Information Industry Department, Changsha Customs, Hunan Entry-Exit Inspection
and Quarantine Bureau, the Provincial Port Administration, the Provincial State Taxation Bureau,
the Provincial Trade and Industry Administration, the Provincial Local Taxation Bureau, the
People's Bank of Changsha Central Sub-branch and other relevant department should, based on
this comment, try to formulate specific measures to help transfer of industries. The provincial
supervision office and the special group to guide the transfer should intensify check to ensure
implementation of the job. The special group should make clear each quarter the progress of the
relevant departments in implementation of specific measures and report to Provincial People's
Government.

VII Resolution to Accelerate the Cultivation and Development of Strategic Rising Industry
<Excerpt> by CPC Hunan Provincial Committee and of Hunan Provincial People's Government
(Released by Hunan Province in 2010, No. 14)


 (III) Keys on the Cultivation and Development of Strategic Rising Industry


7. Strengthen and enhance advanced equipment manufacturing industries- focusing on            the
development of 7 categories of products including medium and high level of engineering
machinery equipments and key components, high level of transportation equipments and key
components in electric traction rail, new energy vehicles and other new varieties of vehicles and
key components, high level of CNC equipments, large-scale metallurgical and mining equipments,
high-tech equipments of ship and marine engineering, and aerospace equipment and related
services.


8. Enhance the integration of new materials industries-focusing on the development of 6
categories of products including advanced energy storage materials, advanced composite materials,
high performance metal structure materials, advanced hard materials, basic raw materials, rare
earth materials and other emerging materials.


9. Expand cultural and creative industries- focusing on the development of 5 fields including
creative design, digital media, digital publishing, animation and game, and creative park
construction.


10. Accelerate the development of biotechnology industry-focusing on the development of 8
major areas including modern Chinese medicine, chemical drugs, biological products, medical
devices and equipment, grain and oil crop breeding, economic crops breeding, animal husbandry
and aquaculture breeding, and special biological breeding.

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11. Vigorously develop the new energy industries-focusing on the development of 6 categories of
products including wind power equipment, solar energy utilization, intelligent grid and key
equipments, nuclear power auxiliary equipment manufacturing, biomass energy equipments,
geothermal energy and other new energy sources.


12. Make vigorous effort to revitalize the information industry- focusing on the development of 7
categories of products and services including digital machines and the new components, software
and integrated circuits, information service outsourcing, Internet economy and mobile
e-commerce, new generation of network and convergence of three networks, Internet of things and
logistics information services, and network and information security.


13. Concentrate on the development of energy-saving environmental protection industry- focusing
on 8 major projects of industrial energy efficiency, life energy saving, comprehensive utilization
of solid waste, city minerals, green remanufacturing, key pollution source control, comprehensive
improvement of rural environment, and energy conservation and environmental protection, and 3
major areas of energy-saving industries,       resources recycling industry, and environmental
improvement industry.


 (IV) Increase the Support of Policy on the Development of Strategic Rising Industry


14. Encourage Independent Innovation- it shall encourage original innovation, focus on integrated
innovation and re-innovation by the introduction and absorption, and actively support various
national scientific and technological project applications of enterprises from strategic emerging
industries. The first contributor who get the first prize of National Technology Invention Award or
outstanding winner of National Award for Science and Technology Progress will be granted
project matching fund with 3000,000 RMB, the second prize of National Technology Invention
Award or the first prize of National Award for Science and Technology Progress with RMB 2
million Yuan and the second prize of National Award for Science and Technology Progress with
RMB 1 million Yuan. In addition, the enterprises that get the provincial technological invention
and the provincial science and technology progress award will be given corresponding rewards by
the Leading Group for Boost of New Industrialization. It shall also encourage enterprises to
increase investment on innovation, and accelerate the improvement of technological innovation
system featuring business-oriented, market-oriented and integration of production, study and
research. The National Project (technology) Center, National Engineering Research Center,
enterprise technology center, and state key laboratories in enterprises will be granted matching
funds with RMB 1 million Yuan while the for new projects identified at the provincial level
(technology) center, the new approved Provincial Project (technology) Center, Provincial
Engineering Research Center, enterprise technology center, and provincial key laboratories in
enterprises will be granted matching funds with RMB 0.5 million Yuan. It shall also make full use


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of standards and norms and play the guidance role to give incentives to the main units involved in
enacting national standards for new emerging strategic industries. In addition, it shall establish
certification system for strategic innovative companies in emerging industries and innovative
products, and the government procurement system, as well as strengthen intellectual property
protection, carry out special legal aid, and crack down on IPR violations. The policy that investors
can become shareholders in the form of intellectual property right shares and technological
holders can become shareholders in the form of technology shares shall be implemented and
encouraged. Besides, the government shall establish cooperative entities which can help to draw
upon strengths from each other and share risk and profit with investors. The practice of becoming
shareholder in the form of IPR shares shall be allowed and the highest proportion of their capital
can account for 70% of the registered capital.


15. Strengthen the technical transformation- It shall completely implemented preferential policies
that the emerging industries of strategic enterprises are exempted from import tariffs when
introducing technology and equipment, and the import of state-supported major technologies and
equipment and key components are also exempted from tariffs and value-added tax. For the
projects with relatively large amount of investment, it shall make a concrete analysis of each
specific case with supported policies. It shall make an intensive and efficient use of land and give
priority to protect the land for key projects of strategic emerging industries.


18. Increase industry input- establishing special fund for the development of strategic rising
industries of Hunan province. The provincial fiscal arrangement will provide 5 million yuan each
year for major strategic new industries on fields of R & D, industrialization, technological
innovation, technological reconstruction, market cultivation, platform construction, talent
introduction and cultivation. It shall make full use of provincial fiscal special fund to guide the
investment of special fund of all administrative levels and various social funds into the strategic
rising industry, among which the proportion of provincial fiscal special fund invested into the
strategic rising industry shall not be less than 50%, and the special funds for science and
technology, the special funds for production, study and research , technical transformation, and
development of information industry shall also focus on the key projects of strategic rising
industries.


19. Increase financing support-enlarging the direct financing scale. It shall guide and support the
qualified enterprises in areas of strategic rising industries to list at both home and abroad, to which
the priority shall be given by the special funds for listed provincial enterprises, striving to
increasing more than 3 enterprises in each strategic emerging industries to be listed within 5 years.


20. Strengthen talent support-making full use of local talents and implementing the plans of
introducing innovation and research team, attracting students who study abroad to start enterprises,


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introducing a group of academic leaders, leading scientists and senior management personnel. It
shall also encourage scientific and technological personnel start their own businesses, encourage
participation in the intellectual distribution, and encourage top-level talents to develop the
strategic emerging industries in Hunan Province with their projects and technologies, such as
academician of Chinese Academy of Sciences and Chinese Academy of Engineering, “Cheung
Kong Scholars” and other talents listed in “National Thousand Talents Plan” and “Provincial
Hundred Talents Plan”. In addition, these talents who start enterprises and hold shares will be
granted certain project fund aid.


VIII. Transact Foreign-invested Projects, Confirmation on the development for Domestic and
Foreign-Projects Encouraged by the State


I The range and purview of transacting a confirmation letter:


(I ) For an encouraged foreign-invested joint venture or cooperative project with an investment of
USD 30 million and above, the confirmation shall be issued by the State Development and Reform
Commission.


(II ) For an encouraged foreign-invested joint venture or cooperative project with an investment
amount of below USD 30 million, the confirmation shall be issued by Provincial Development
and Reform Commission; for an encouraged project with an exclusive foreign capital or capital
increase above norm, the confirmation shall be issued by the Ministry of Commerce.


(III ) For an encouraged project with an exclusive foreign capital or capital increase below norm,
the confirmation shall be issued by the Provincial Department of Commerce. Encouraged
foreign-invested enterprises mean the projects in Hunan which accord with the conditions
described in Guidance Directory on Foreign-Invested Industries and Directory on
Foreign-Invested Industries in Central and Western Regions, including;


1、Foreign-invested projects in Sino-foreign joint venture, Sino-foreign jointly operated enterprise
and solely foreign-funded enterprise.


2 、 The capital-added projects in Sino-foreign joint venture, Sino-foreign jointly operated
enterprise and the wholly foreign-funded enterprise which expands the total investment and
increasing the foreign registered capital.


II、Documents for Transacting a Confirmation Letter:


1、An application written by the local (city or prefecture) Commission of Developmenet and
Reform or the Bureau of Commerce;

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2、An application report for the project enterprise


3、Copies of the documents verifying the project;


4、The projects with less than 30,000,000 US dollars’ investment should be accompanied by the
imported equipment list with 6 copies stamped by the project initiator. The projects with a total
investment of 30,000,000 US dollars or more should be accompanied by an imported equipment
list with 7 copies stamped by the project initiator (Form of export equipment schedule can be
loaded down from Hunan Investment Projects Network and website of Hunan Provincial
Department of Commerce);


5、Copy of the approval certificate and business license of the enterprise;


6、Other materials as required.


III Altering the Confirmation Letter


The confirmed project that has been presented with the confirmation letter, upon the need to alter
the project initiator, total investment sum, foreign exchange use, performance duration and
Facility List etc., are required to apply to the Provincial Development and Reform Commission or
Municipal Bureau of Commerce for the change after the municipal (prefecture) Development and
Reform Commission or Provincial Department of Commerce examines the content of the change,
with the following materials:


1. Copy of the presented project confirmation letter


2. The contrast table of the alteration and the relevant narration material


The Provincial Development and Reform Commission or Provincial Department of Commerce
should present the alternation confirmation letter after examination and approval. For those
projects that need to be examined and approved by the National Development and Reform
Commission or Ministry of Commerce, they should be submitted to the National Development
and Reform Commission for issuing.


IV. Other


(I) The total project investment amount in the foreign-invested project is the amount or the added
amount approved in the project approval documentation; the project used foreign exchange
amount is the expense for the self-construction imported facility used foreign exchange for the
facility, technology and spare parts. Project implementation period is the duration from business


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start and expiration, not referring to the operation period of the foreign funded enterprises. The
imported facility list shall include all imported equipment in the verified project application report,
containing the equipment name, specification, model, unit and set number, unit price and total
price


(II) The imported facility list of the foreign-invested project is required to print in A4 paper. The
list shall not be bound in a volume if there is more than one page and each page should be stamped
by the project initiator. The municipal (prefecture) Development and Reform Commission or
Municipal Bureau of Commerce should also stamp on each page after examination and approval.


(III) For the foreign-invested project that needs to transact project confirmation letter, the
municipal (prefecture) Development and Reform Commission or the authorized development zone
(park) should execute in strict accordance with the rules and regulations on foreign-invested
project after the national investment system reform. They should not reduce the approval
procedure and the materials for approval, and should not substitute the project application form
and the approval documentation with project approval form.


IX. Hunan Provincial Party Committee of CPCThe People's Government of Hunan Province
Decision on further expansion of opening up and acceleration of the development of open
economy <Excerpt><top>
(IV) The effective ways to vigorously expand the development of open economy
     1.Take undertaking industrial transfer as an important starting point. Seize the
significant opportunity of global industrial transfer to further bring the roles of recipient place for
gradient transfer of national processing trade, the key undertaking county of provincial level, the
pilot counties and the demonstration park into full play, develop the plan for undertaking industry
transfer in a scientific way, promote rational distribution of industry. Bring the location, resources
and talents advantages into full play; enhance allocation function to enhance the attractiveness and
gathering force of transfer of undertaking industries of our province. Grasp the trends of industrial
transfer, a large amount of those investments to drive strong, and for strategic projects with large
amount of investment and high degree of association and can give strong impetus and core
enterprises, the high-level promotion, high butting, handling special cases with special methods
shall be implemented to promote united transfer and cluster development of enterprises.
     2 . Optimize the layout of open area. Accelerate the open development of urban
agglomerations around Changsha, Zhuzhou and Xiangtan, the experimental areas of "two-oriented
society" in Changsha, Zhuzhou and Xiangtan should be the first to be expanded in opening up,
and become the province's leading regions and demonstration areas for further opening up, rely on
state-level high-tech zone, the economic development zone and accepting base for industrial
transfer to create an internationally competitive equipment manufacturing base, an important
export base of electromechanical products, strategic and emerging industrial base and the cultural
and creative center with international impact. Accelerate the development of port and airport
economy, and make the Yueyang port area become the important international port, logistics
centers and state-level bonded port area of middle reaches of Yangtze River, and bring its


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bridgehead role in opening up of the province into full play; speed up the pace of opening up and
construction of Huanghua International Airport, positively strive to open more routes and flights to
accelerate the development of air-freight service; seek to upgrade the Jinxia bonded logistics
center to comprehensive bonded area of Changsha, Zhuzhou and Xiangtan. Give full play to
regional advantages of Southern Hunan, focus on docking of Guangdong, Hong Kong and Macao,
the North Bay Economic Cooperation Zone and the China - ASEAN free trade area and strive to
make them become the national demonstration areas for undertaking industry transfer. Accelerate
the open development of the Western Hunan, foster and strengthen tourism, bio-pharmaceuticals,
food processing, eco-agriculture, inter-provincial border trade logistics and other open economies
with feature advantage, and actively engage in the open development of Wuling Mountain
economic cooperation zone.
     3.Speed up the open development of county economy. All counties and districts shall
seize the significant opportunities for development, innovate ideas of opening up and development,
proceed from reality, rely on the resources advantage, vigorously strengthen the investment
attraction and constantly raise the level of opening up of the county economy. Take encouraging
foreign investment in modern agriculture, developing resource-based products processing and
developing domestic and foreign markets as the important part of open economy of county. The
experimental counties and key counties that undertake industrial transfer should bring the policy
advantage of investment attraction into full play, develop processing trade, and make efforts to
expand exports to act as the leading counties in development of open economy. Make great efforts
to build a number of counties and districts with prominent industry characteristics, larger scale
export and high export-oriented degree in open economy. Province, municipality and state shall
provide strong support for the open development of the county economy in policy resources,
investment attraction channels, personnel training, customer information and other aspects.
     4.Highlight the battle position role of opening up of park. Further innovate system and
mechanism and management mode of park, actively explore the direct management, trusteeship,
custody, collaborative construction and several parks within a district, one park in several districts
and other diversification model, explore the joint development of trans-provincial and
multinational ones, entrusted strategic investors and whole-area development of multinational
companies and other diversified development mechanisms to make the park truly become the
main carrier of development of open economy. Strengthen the efforts to cultivate and introduce the
leading enterprises, create a number of characteristic parks with distinctive main lines of business
and relatively concentrated source of foreign investment and promote the industrial clusters
development and characteristic development of parks. Further increase the investment in park,
strengthen supporting industries, improve facilities of the park and enhance carrying capacity.
During the "12th Five-year" period, a batch of state-level parks were added, and a number of
state-level and provincial demonstration base for transformation and upgrading of foreign trade
and export processing zone were built.
     5.Build the open modern logistics system. Speed up the construction of the province's
highways, railways, ports, ports and other integrated transport hub, promote the zero distance
transfer and seamless connection of a variety of modes of transportation and form a modern
three-dimensional traffic system with smooth flow of goods. Strengthen the planning and
construction of logistics network, build a number of integrated logistics parks, logistics centers
and distribution centers with complete function, considerable scale and high export-oriented


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degree, focus on building logistical links in Changsha, Zhuzhou and Xiangtan, Chenzhou,
Hengyang, Yueyang, Huaihua and other regions, strengthen the construction of infrastructure
configured for logistics centers and promote the docking between integrated transport corridor and
large-scale logistics centers. Develop the combined transports of river and sea, railway and ocean,
land and sea and other multimodal combined transports, land border transport and the international
express business, encourage the carriage enterprise of "five scheduled" train to add trains to
effectively reduce logistics costs. Encourage and support coastal shipping companies and port
storage companies to provide multi-level cargo distribution, handling, storage, packaging,
processing, distribution, container and other integrated logistics services of ports for enterprises of
the province. Actively cultivate modern logistics service market, establish and perfect the logistics
public information platform and form the efficient, fast, low-cost modern logistics system as soon
as possible.
       6.Accelerate the construction of port customs clearance system. Strengthen the
construction of infrastructure and supporting service facilities of port, improve the functions of
port, increase operation areas of port, speed up the construction of platform of e-port entity and
implement information resource sharing. Support qualified cities and counties to establish
inspection and quarantine and customs offices, seek to build export processing zone or
comprehensive bonded area in Changsha, Yueyang and Hengyang and better bring the role of
platform of Chenzhou export processing zone into play. Strengthen inter-regional port cooperation,
promote the speedy customs clearance procedure of "declaration at local customs, inspection and
release at port customs", implement 24-hour appointment customs passage system and the
personalized customs clearance service for key import and export enterprises, and implement the
green channel of inspection and quarantine and through and release system for high-integrity
import and export enterprises. Simplify entry and exit procedures of business people and expand
the range of through train of enterprises when they are abroad on business. Improve the province's
coordination mechanism of customs clearance of ports, strengthen cooperation among ports,
customs, inspection and quarantine, border defense, finance, foreign exchange, taxation,
transportation and other departments, focus on building high-efficiency, low-cost and predictable
customs clearance system and achieve facilitation of investment and trade.
       7.Effectively build an open platform. Speed up the construction of various types of open
platforms, integrate education, culture, health, sports, tourism, foreign affairs, Taiwan, propaganda,
exhibition and other resources, give full play to their roles in foreign exchanges and development
of the open economy, form and improve the platform system that can accelerate the development
of open economy. Make great effort to create 1-2 scale, normalized and attractive international and
state-level trade and exhibition platforms, enhance the concentration effect and scale effect of
investment invitation activities. Support cities, counties, parks and enterprises to participate in all
kinds of trade activities in and outside China and actively and effectively hold investment
invitation activities.
(V) Improve the policy support system for development of open economy
       1.Offer more financial and taxation support. Establish "special fund for development of
open economy in Hunan Province ", cities and counties shall also set up special funds and
incorporate them into the annual budget. Other special funds shall all be tilted to the development
of open economy. Give full play to leverage function of tax, better grasp and make full use of
relevant preferential tax policies, strive to make more key industries and characterized industries


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of our province be included in the catalogue of industries that enjoy state tax preference. If
high-tech enterprises and enterprises that center on comprehensive use of resources which have
been identified by other provinces move to and settle down in our province, corresponding tax
preference shall continue to be given within the eligibility period. Accelerate the export tax rebate
process. The export tax rebate of the incremental portion borne by cities and counties through
classification shall be solved as a whole by the provincial finance by means of giving rewards in
place of subsidies.
       2. Offer more financial support. Conscientiously implement various trade finance policies
and further improve financial services. All commercial banks shall enhance efficiency in working
capital loans of domestic-funded and foreign owned enterprises and speed up credit examination.
Actively build the platform for docking and financing of banks and enterprises and support
eligible enterprises to develop overseas borrowing, domestic and overseas listing or expand direct
financing scale through private equity or other means. Grant greater support to import and export
credits and insurance of small and medium-sized enterprises. Organize relevant enterprises and
projects in the province to actively apply for the special preferential credit of overseas investment
for export-import banks of China. Promote cross-border RMB settlement and foreign investment
of cross-border RMB and promote facilitation of trade and investment. Allow qualified enterprises
to implement centralized management of foreign exchange funds and provide hedging services for
foreign exchange revenue and expenditure of enterprises.
       3.Earnestly guarantee land supply. Give priority to guaranteeing land for the encouraged
foreign investment projects, especially the seven strategic new industries and the twelve industrial
projects defined in implementation plans for industrial revitalization in accordance with the law.
Improve methods for approval of construction land. Break the ownership, geography, identities of
investors and other restrictions and grant the national treatment and fair competition to land use
rights, exploration and mining rights and other aspects.
       4. Strengthen human resources guarantee. Speed up the training of open talent group that
are familiar with WTO rules, master foreign laws, understand the advanced technology and be
proficient in foreign languages, focus on training of a group of leading personnel and creative
teams of enterprises, be bold to utilize highly competent people with open ideology, innovative
spirit and professional competence, make great efforts to create a public management personnel
team with international global vision and international standards. Make full use of high-quality
resources of overseas and costal developed areas and intensify targeted training for various talents.
Strengthen the construction of human resources market and foreign experts’ base and provide
effective public services for promoting the rational flow of trained personnel. Vigorously develop
vocational and technical education, speed up the training of applicable type, application type and
urgently needed technical personnel and train a large number of various types of skilled workers.
Help enterprise to solve employment problems and coordinate and handle labor relations.
(VI) Form a powerful resultant force in accelerating the development of the open economy
       2. Improvement and overall planning of coordination mechanism. Improve the
cooperation mechanism among various departments of "information sharing, collaborative
construction of environment, putting heads together on the problem and joint settlement of work"
in opening up, set up the system of joint meeting of departments, consultation system of major
projects and major activities, risk prevention mechanism for "going out" and emergency disposal
mechanism for overseas emergencies, timely hold scheduling meetings on opening up, make an


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overall plan and research on solution of new situations and problems in the development of open
economy, coordinate the progress of work on scheduling and supervision, strengthen supporting
management and follow-up service and effectively promote the investment attraction, project
construction, market development, risk aversion and so on.
       3.Energetically optimize the open environment. Cadres and the masses of the province
shall firmly establish the concept of "competitive environment is the first" and strive to create
efficient, low-cost and unobstructed open environment. Accelerate and promote the construction
of constitutional Hunan, improve foreign-related local laws and regulations, administrate in strict
accordance with the law and ensure an impartial judicature and build a legal environment that is
open, fair, just and predictable. Vigorously implement the " administrative procedure rules of
Hunan province", strengthen government reform, transform government functions, simplify the
examination and approval items and procedures, pay close attention to construction of
e-government and electronic monitoring system to achieve interconnection and
intercommunication among provincial, municipal and county government, improve work
efficiency and service levels and make great efforts to improve the administrative environment.
Speed up the construction of credit system, standardize the order of the market economy,
strengthen intellectual property protection, and create the market environment where various types
of investors can engage in fair competition. Accelerate the construction of international
community, international supermarkets, international schools, international cultural and sports
clubs and other supporting facilities to meet the demand on material and cultural lives of foreign
people in Hunan and create the working and living environment that can attract people and make
people reside here well. Further intensify the environmental remediation efforts, improve and
optimize investment environment evaluation system and effectively safeguard the legitimate rights
and interests of investors.
       4.Create the strong open atmosphere. Make full use of all kinds of media at home and
abroad to conduct all-round promotion of Hunan, improve the visibility and influence of Hunan
and enhance the attractiveness of the province’s opening up. Incorporate the theory and
professional knowledge on open economy into the important contents of the training of cadres at
all levels, make great efforts to enhance the open ideology of cadres and the masses in general and
vigorously create the strong atmosphere of emancipating the mind, expanding opening up and
accelerating development.
       5.Establish and improve the evaluation system. Establish the evaluation and incentive
mechanism for the work on open economy of cities, counties and relevant parks; improve the
systems on investment promotion, transfer of undertaken industries, export and import trade, trade
and economic cooperation and other indicators and incorporate them into the government
performance evaluation systems.
       The provincial government shall promulgate specific polices and measures in accordance
with this decision. Departments at all levels must develop practical measures for implementation
in the light of specific conditions.

X. Several Policies to Speed up the Development of Open Economy<Excerpt>



(IV) Enhance the platform function of various types of development parks


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18. Accelerate the construction of development park system. Some policies and measures shall be
formulated to promote the system construction of industrial parks to increase the park's planning
guidance and policy support. It shall improve the development level of national development
zones including high-tech districts in Changsha, Zhuzhou, Xiangtan, Hengyang, and Yiyang,
economic development zones in Changsha, Yueyang, Changde, and Ningxiang, and export
processing zone in Chenzhou, and support eligible provincial development zones upgrading to
national development zone. As for the city level development parks with good basic conditions,
great prospects for development, and strong driving ability, they can be developed into provincial
industry cluster and incorporated into the development parks above the provincial level with the
preference of free administrative charge after the approval of its development plan. From 2011 to
2015, the projects listed in development parks will be exempted from provincial administrative
charges except for the state's charges. Moreover, we shall support the various types of parks to
develop based on their own advantages and characteristics.

19. Expand carrying capacity of the development parks above the provincial level. In the key
processing trade gradient transfer zones and key (pilot) industrial transfer counties, the provincial
development parks can initiate project areas around the regions which conform to urban and rural
planning and land use planning, and be incorporated into the park master plan and enjoy the
park-related policies. The qualified development parks above the provincial level can set up
cooperation parks within the park zone to cooperate with domestic and foreign investors.

20. Attract different industries to gather in the park. Through full implementation of Proposals to
Further Promote the Development of Industrial Parks by CPC Hunan Provincial Committee and
Hunan Provincial People's Government (Released by Hunan Province in 2009, No. 4), we shall
build various types of parks into important carrier of open economy. Since the first 3 years’
production of the encouraged major investment projects with paid-in investment of more than 50
million U.S. dollars or more than RMB 0.3 billion yuan settled in development parks above the
provincial level, the government will grant appropriate incentives to the industrial parks from new
added provincial tax income for infrastructure construction.

(V) Accelerate the development of international logistics

21. Ensure a smooth flow of international logistics channel. It shall accelerate the construction of
inter-provincial highway, railway, and high-grade waterway, open up the decapitated neck, and
strengthen international logistics cooperation in coastal and border areas; speed up the
construction of airports, develop international air logistics and increase international and domestic
flight routes by focusing on upgrading the cargo capacity of Huanghua Airport. Besides, it shall
give great support in international express business in Chenzhou and Yongzhou.

22. Strengthen the logistics infrastructure construction. It shall give great support to international
logistics platforms including transportation and logistics platform for large bulk cargo (including
dangerous goods), bonded logistics platform, and public information platform for foreign trade
logistics. For newly built or expanded modern logistics park, road (including rail) transport station,
storage facilities, distribution centers, logistics information platform and other key infrastructure
projects, we shall give support in the interest payments on loans, up-front fees, etc.

23. Accelerate the development of multimodal transport. Through relying on the port, rail and road
cargo terminal, airport and other transportation hubs, it shall plan and build a number of transfer
facilities for container multimodal transport, and support the development of multimodal transport
including road, railway, waterway and aviation by focusing on the opening and operation of five
classes are scheduled (round). All the five classes are scheduled (round) to the coastal ports or
harbors from Hunan province; we will give preferences in 3 consecutive years according to the
number of actual completion of cargo containers. Besides, we shall also enhance the level of
Xiangjiang River channel and handling capacity of the ports along the river, strengthen the
construction of Chenglingji new port in Yueyang city and other ports around Dongting Lake, and
vigorously develop inland water transport.


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(VI) Optimize the environment of customs clearance

24. Speed up the construction of customs clearance. It shall improve the work coordination
mechanism and formulate basic standards and requirements for customs clearance to create a
predictable environment with high efficiency and low cost; implement various measures in
memorandum of understanding of provincial department, provincial bureau, inter-provincial units
to promote inter-regional customs clearance cooperation and building of “no-permanent port”;
fully implement the policy of "declaration in ownership place and clearance by port "issued by
Customs Bureau and accelerate the implementation of the policy of "inspection in ownership place,
possession clearance in ownership place, and access by port" issued by Inspection and Quarantine
Bureau.

25. Enhance port infrastructure construction. It shall speed up the construction of air ports in
Changsha and Zhangjiajie, water ports in Chenglingji, Yueyang, and Xianing, Changsha, railway
crossings in Changsha and Liling, road crossings in Chenzhou and Hengyang, as well as the
improvement of infrastructure facilities, supporting services and overall efficiency of the port.

26. Strengthen the construction of electronic port. Through integration of core processes and
related logistics business information services of customs clearance, it shall realize the data
sharing between ports and interconnection of reporting network, verification network, and
operation network with the China Electronic Port. Besides, we shall also accelerate the application
of project development, and provide "One Card" and "One Stop" services for import and export
customs clearance for the enterprises.

27. Improve the layout of the port joint inspection agencies. We shall support the areas with
relatively concentrated import and export goods and rapid business development to build new
ports, and help qualified cities to apply and establish representative offices of Customs Bureau and
Inspection and Quarantine Bureau. It shall also speed up the construction of Changsha Jinxia
Customs and Inspection and Quarantine Bureau, and actively promote the construction of special
inspection area and site by supporting the construction and development of export processing zone
in Chenzhou, Hunan centralized clearance field of agricultural products for Hong Kong and
Macao, Jinxia bonded logistics center in Changsha. We shall also actively strive for the
establishment of the export processing zone in Hengyang, comprehensive bonded area in
Changsha, Zhuzhou, and Xiangtan, and bonded port in Chenglingji in Yueyang City.

28. Optimize customs clearance services. It shall ensure the full implementation of 24-hour
customs clearance booking system, and gradually implement the "5 +2" work system and a
24-hour customs clearance service. We shall also actively promote the reform of customs
clearance classification; open the "green channel" of inspection and quarantine and direct release
system for high-integrity enterprise and actively help qualified export enterprise to get exemption
from inspection; lead enterprises to take full advantage of the GSP and free trade policies to
expand exports; provide convenient services for export enterprises to apply for a certificate of
origin. Besides, it shall expand the scope of convenient customs clearance and ensure smooth
process by simplifying clearance procedures for the immigration personnel and shorten the
inspection time; strive to achieve landing visa endorsement towards foreigners and compatriots
from Taiwan in Zhangjiajie Air Port.



(VII) Strengthen security of elements

29. Increase support on fiscal policy. It shall set "Hunan special funds for the development of
open economy" to be mainly used to support the expansion of investment attraction, undertake
base of industry transfer, and foreign trade, as well as the promotion of foreign investment and

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cooperation, deepening of regional economic cooperation, development of international logistics,
port construction, oversea talent introduction and personnel training. Each city and county shall
also set up special funds into the annual budget and other special funds shall be inclined to the
open economy. Besides, we shall ensure a full implementation of national tax preferential policies
to support the industry transfer undertake and adjustment of industrial structure, and encouraging
independent innovation. It shall also increase the strength of export tax rebate and the amount of
which will be borne by cities and counties in the form of awards instead of subsidy through the
provincial finance overall planning.

30. Strengthen the financial services. It shall lead the financial institutions to continue to increase
credit support on foreign investment enterprises, and open up the "green channel" of credit
approval for major projects. Then, vigorously attract foreign investment, foreign financial
institutions, and private equity institutions; encourage enterprises to list overseas; support eligible
foreign investment enterprises to expand direct financing by using private equity, issuance of
shares, corporate bonds, short-term financing bonds, medium-term notes, etc. It shall also
encourage and support guarantee institutions in our the province to expand financing guarantees
small and medium enterprises of foreign trade, and lower guaranteed rates, and give awards to
guarantee agencies of which guaranteed rate is lower than 50% of the prime bank interest for loans
of the time; support enterprises to insure export credit insurance, and expand export credit
insurance for emerging markets, and further improve the export credit insurance coverage.

31. Optimize foreign exchange management and service. It shall support the implementation of
“foreign capital pool" business for enterprise groups, and encourage enterprises to carry out the
business of "keeping export earnings abroad"; improve foreign exchange revenue and expenditure
management for service outsourcing, logistics and transport, tourism, overseas project contracting
and other areas, and increase foreign currency exchange agency points in tourist attractions.
Besides, it shall increase the strength of policy support for bonded areas, export processing zones
and other special monitoring parks in the province, lead and help companies resist against the risk
by exchange rate fluctuations, and actively promote cross-border RMB business; deepen the
reform of import payment handling and validation system.

32. Give priority to ensure the project land for encouraged foreign investments. It shall strengthen
co-ordination for land indicators and give priority to land arrangement for domestic and foreign
investment projects in development parks above the provincial level. As for the land-intensive
foreign investment projects encouraged by the state, when the base price of sales for plot is
determined, it dose not need to implement in accordance with Lowest Price of Industrial Land in
the National Standards for the land in corresponding location at percentage of least 70%. For the
encouraged major investment projects with paid-in investment of more than 50 million U.S.
dollars or more than RMB 0.3 billion yuan, it can establish a "green channel" for land approval.
Besides, it shall optimize land use approval process, and speed up land supply; the location of
projects shall be selected alone by preliminary review of some relevant authorities, and the
approval procedures of feasibility study, mineral deposit pressure assessment, risk assessment of
geological hazards and other environmental impact assessments and other formalities can be
carried out simultaneously with the preliminary review.

33. Actively introduce overseas talent and intelligence. Through formulating and implementing
Program to Introduce Professional Talents for the Development of Open Economy in Hunan, it
shall vigorously introduce high-level overseas personnel, talents in shortage and innovative team,
as well as advanced foreign technology and management experience. It can set short-term jobs in
universities, research institutes, public service organizations, and key enterprises to attract
high-level professional talents in teaching, research, technical services, project cooperation and
other works in Hunan; continuously improve working and living environment in Hunan for
high-level experts from overseas, and establish services base of foreign experts.

34. Make great efforts to train various professional talents. It shall encourage schools, research
institutes, enterprises in Hunan to start various forms of international exchange and cooperation,
and foster international trade and business professionals; support senior management and technical

                                                 138
personnel of enterprises to study at home and abroad; devote greater efforts to actively develop
various types of vocational education, and make great efforts to train professional and technical
personnel. We shall also encourage colleges to cooperate with foreign investment enterprises to
carry out the training of order type and directional orientation; strength the construction of
county-level vocational education center building, and co-ordinate training for migrant workers.
Besides, the great supports shall be given to the vocational enterprises and relevant institutions to
provide vocational skill training for newly employed staff, and subsidies will be granted to
different types of workers for the training costs; support foreign investment enterprises to provide
vocational skill training for newly employed staff. After the newly recruited staff pass the
examination for posts, the government will give subsidies to enterprises for the training costs at
proportion of 50%, which the training subsidies per person will not be more than RMB 500 yuan
in principle (professional and technical training of service outsourcing staff is not subject to this
limit.)




                            Administration and Service Department

I.   Department of Commerce of Hunan Province<top>
II. Hunan Association of Enterprises with Foreign Investment (HAEFI) <top>
III. List of banking institutions in Hunan Province<top>
IV. List of Investment-related Organizations in Hunan Province<top>\
V.   List   of   Municipality-Level      Foreign      Investment   Administrations      in   Hunan
     Province<top>




I. Department of Commerce of Hunan Province<top>

Department of Commerce of Hunan Province is an agency authorized by the provincial
government to take charge of foreign trade, economic cooperation, investment promotion and
foreign direct investment introduction of the whole province, and the functions of its
administration departments for foreign capital are followed:

1. Division of Investment & Promotion

Carry out various general and specific policies, stipulations related to foreign investment; take
charge of plan approval, guidance and coordination of Hunan’s foreign investment promotion
activities; organize and take part in the foreign investment promotion activities at provincial and
state level; research and propose long term development plan, industry orientation gist, planning
and layout advice for Hunan’s foreign investment; bring forth project for foreign investment and
set up project database; cooperate with relevant department to conduct preparatory work for
foreign investment; compile and print A Guide to Investment in Hunan and regularly publish List
of Projects open to Foreign Investment and Directory Catalogue; take charge of management and
coordination overseas investment promotion activities; including foreign investors’ reception,
negotiation and inspection work and etc; participate, coordinate and guide detailed foreign trade
and economic cooperation of the economic and technological development zones at provincial
level.

Tel:(86-731) 82287125,82284442,82289505,82289534,
             82287124,82287190, 885281215

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Fax:(86-731) 82284442,82287124,82287190
Email: invest@hunancom.gov.cn

Website:www.hninvest.gov.cn



2. Division of Administration for Foreign-funded Enterprises

 Guide and integrated management foreign-fund introduction; examine and report the
 establishment and alteration of the foreign enterprises which, in the catalogue of restricted
 investment and with fund over USD 30 million, are approved by the State Ministry of Commerce
 in accordance with law and regulation, specifically, the contract, constitution, and such vital
 changes as fund increase & decrease, share transfer & combination; check whether the foreign
 enterprises observe the law, contract and constitution; take lead in the general annual check of
 the foreign enterprises in Hunan Province; compile the introduction guideline for the annual
 foreign investment; approve for the foreign enterprises in the primary & secondary industries
 their import-export quota, facilities, permission application and issuance; check and verify the
 export-oriented enterprises and technically advanced enterprises; give out the import permission
 to the “five-type” enterprises and the confirmation letter to the enterprises encouraged by the
 state; examine the enterprises whose products are totally exported; record and analyze the foreign
 investment; check the investment environment of the provincial development zones and their
 fund introduction; handle the complain and coordinate with the foreign enterprise.

Tel:(86-731) 82287057,82287117,82287115,82289530,82287119

Fax:(86-731) 82295160

3. Division of Service Trade
Guide ,organize and implement the development plan and policy for the service trade; guide,
manage and promote service trade of the province; take charge of contact work of the coordination
mechanism of tran-department for the service trade of the province; guide, organize and
coordinate the service of the whole province for outsourcing and the promotion of extension of the
markets; draw up and carry out the development plan and policy measures for service outsourcing ;
guide, coordinate relevant work of” national service outsourcing representative cities” and
“service and trade representative areas”; attend and organize the confirmation and examination of
“service enterprises with advanced techniques”; guide, coordinate , and manage the technological
introduction and the export of technology and software, mange the registration procedure of
import technology contract of free trade except those banned by the state or belong to major
introduced technology; and take the responsibility for the statistics of service trade in Hunan
Province.
Tel:(86-731) 82287085,82287200,82289538,82289537,82287053

Fax:(86-731) 82287110

4. Division of Processing Trade

Implementing relevant state rules and policies regarding processing trade; taking charge of
formulating development plan of Hunan’s processing trade; proposing detailed ways and measures
on investment promotion for processing trade; administering invested projects database on
processing trade; guiding and coordinating investment promotion work for processing trade,
taking charge of the processing trade contracts examination and approval; guiding and

                                               140
coordinating processing and assembling work of various enterprises in the province; taking charge
of the guide, coordination, examination and approval work for provincial level processing trade
zones; taking charge of processing trade statistics and comprehensive analysis, advising measures
and methods for processing trade development.

Tel:(86-731) 82287074,82287073,82289541,82287072,82289540

Fax: 0731-82287072

II Hunan Association of Enterprises with Foreign Investment (HAEFI)<top>

HAEFI, a non-profit organization approved by the Chinese government, is composed of the
enterprises with foreign investment, enterprises with investment from compatriots from Hong
Kong, Macao and Taiwan and overseas Chinese, organizations and research institution engaged in
the service of foreign investment, foreign enterprises' agencies and offices in China engages in
investment business, and related public figures. The objective of HAEFI is in compliance with the
state general and specific policies, laws and regulations concerning the opening up to the outside
world and promoting foreign investment, tries its utmost to serve its members and other investors;
upholds their legitimate rights; promotes mutual understanding, friendship and cooperation
between Chinese and foreign parties of its membership enterprises, between its members and the
local governments and between its members themselves; brings the initiatives of its members into
full play in China's economic construction and international economic cooperation.

Add: 98 Wuyi Road, Changsha City, Hunan Province, China
Tel: (86-731) 2299706, 2286819

Fax: (86-731) 2288393

III.List of financial institutions in Hunan Province<top>

(ⅰ)Bank of China Hunan branch

Formed in 1912, Bank of China is the most time-honored commercial bank in China. On August
26, 2004, Bank of China Limited was formally incorporated in Beijing as a joint-stock commercial
bank. On June 1 and July 5,2006, Bank of China was listed in Hong Kong Stock Exchange and
Shanghai Stock Exchange respectively. Bank of China provides its customers with Universal
banking platform, so as to meet customers’sophisticated demands: The Bank provides its
corporate customers with various financial products including loans ,bill discounting, trade
finance, deposit-taking, settlement, clearing, cash management services as well as integrated
financial solutions tailor-made to meet customers’needs. The Bank provides a broad range of
personal banking products and services, including savings deposit, personal loans, payment and
settlement, bank cards and wealth management services. The financial market business of the
Bank includes foreign exchange and precious metal transactions, bond transactions, short-term
financing notes and bills, local and foreign-currency bond investment, financial derivatives and
commodity futures, local and foreign currency wealth management and asset management,
distribution and custody of funds, etc. BOCI is well-positioned to offer its clients a wide range of
investment banking products and services, including corporate financing, mergers and
acquisitions, financial advisory, sales and trading of equity and fixed income products, derivative
and structured products, asset management and private equity investments. BOCG Investment,
which was incorporated in Hong Kong in 1984. Its major business includes corporate equity

                                                141
investments, distressed asset investments, fixed assets investments, management and lease and
property management services. BOCG Insurance was founded in Hong Kong in July 1992. The
business scope of BOCG Insurance includes: property insurance, liability insurance, credit/bond
insurance, short term health insurance, accident insurance and reinsurance of the above-mentioned
classes of insurance. Its subsidiary company, BOCG Life, manages the business of life insurance
in Hong Kong. Another subsidiary company, Bank of China Insurance Company Limited, is
striving to leverage the insurance market in Chinese Mainland. BOCHK is one of the three
note-issuing banks in Hong Kong. Through its extensive service network , BOCHK offers
comprehensive financial products and services to tis retail and corporate customers. BOCHK was
appointed by the People’s Bank of China as the clearing bank for Renminbi-denominated
businesses in Hong Kong and remained the leader in Renminbi-denominated businesses in Hong
Kong. As of the end of 2006, the total assets of BOCHK Group reached RMB926.082 billion and
contributed a net profit of RMB9.448 billion to the Bank. As of the end of 2006. Bank of China
had 11,241 domestic and overseas branches and outlets. There were 37 tier one branches, 283 tier
two branches and 10,277 outlets in domestic operation, and 643 branches, subsidiaries and
representative offices in Hong Kong. Macau and 25 countries or regions. The Bank has
established correspondent relationships with more than 1,500 agency banks. Leader in non-interest
income and foreign exchange businesses. Bank of China’s non-interest income as a percentage of
total operating income is the highest among the domestic banks. The Bank manages the largest
foreign exchange portfolio among Chinese commercial banks. What’s more, the Bank is the
market leader in the foreign currency-denominated deposit, lending, and trade-service businesses
in China. Bank of China has maintained business relationships with more than 220 of the Global
Fortune 500 companies operating in China, and has established a solid customer base with more
than 41,000 corporate credit business customers, 1,500 financial institution customers and 140
million personal banking customers.

Bank of China Hunan branch was formally established in 1978, which is the first grade branch
subordinate to the H.O.. Through the past 30years, Bank of China Hunan branch has become a
great stock limited commercial bank with widely products catalogues, advanced services, and
strong capital. It significantly contributed to Hunan province in terms of economical and social
development. In addition, Bank of China Hunan Branch has always been active to meet
developmental trend and to innovate financial products, and in consequence, it has set a superior
brand image over others. Bank of China Hunan branch has 400 branches and nearly 9000
employees as well as senior leaders and experts who had studied and trained in developed
counties. Bank of China Hunan branch maintains a large market share and it exerts its traditional
strength in terms of international settlements, trade financing, exchange loan and foreign exchange
trading.

     Since 1915, Bank of China found a branch in Changsha city, which operated 96 years in
Hunan province. Combined Bank of China’s hundreds years of historical spirit and culture in
Hunan province, Bank of China Hunan Branch followed the time spirit and developed itself to
make ourselves stronger. After innovation in of China, especially regeneration of China stock
market, Bank of China Hunan branch grow much faster than before. Bank of china Hunan branch
have more than 8400 employees, 13 secondary branches, 6 business addresses in Changsha City
direct administrate by Hunan branch, 44 county branches, and total 395 business addresses. Those

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branches covered all over Hunan provinces include all 14 cities in Hunan provinces. Bank of
China Hunan branch is a listed company owned by Chinese government, it provided all kinds of
services, using advanced mode of their operation, having enough financial ability, holding huge
numbers of client, and having higher educated employees in financial aspect. It played a very
important role in building of Hunan’s economy and promoted innovation in Hunan province.

Facing the new opportunity and challenge in the society, China Communist Party lead Bank of
China Hunan branch followed a core idea which is “never give up to seeking excellence”;
believed “putting customers in the most important place and follow the demand of market”; also
believed “services create all value”. Using professional, high quality and high efficiency services
to gain more customers. Believed “creativity can lead the stream”. Make all aspects catch up the
highest level to make better services and won most customer’s confidence. Those aspects include:
international balance, financial management, Middle and Small Corporation finance services and
so on.

accomplishment. E-mail: http://www.boc.cn                Customer Service Phone: 95566

Tel:0731-82580874               Contact: Mr. Yangzheng and       Mr.Liaoqiping

(ⅱ)ICBC




      Industrial and Commercial Bank of China limited, formerly known as Industrial and
Commercial Bank of China, was established on 1 January 1984. On 28 October 2005, the Bank
was wholly restructured to a joint–stock limited company. On 27 October 2006, the Bank was
successfully listed on both SSE and SEHK.
      Till the end of 2010, our bank has developed into the top large listed bank in the world in
terms of market capitalization, cutomers’ deposits and profitability, possessing an excellent
customer base, a diversified business structure, strong innovation capabilities and market
competitiveness. Our bank provides comprehensive financial products and services to 4.12 million
corporate banking customers and 259 million personal banking cutomers by virtue of the
distribution network consisting of 16,227 domestic institutions, 203 overseas institutions and over
1,562 correspondent banks world wide, as well as through our E–banking network comprising a
range of internet and telephone banking services and self–service banking centers, basically
forming an internationalized trans–market operrating a leading positon in the domestic market in
commercial banking areas. Upholding the management of tenet of “focusing on customers and
creating value through services”, our bank constantly improves its financial services to enprich
brand connotation. With the brand image of “By Your Side and as Your Trust” being widely
recognized, our bank has been the banking brand of first choice for Chinese customers and the
most valuable financial brand around the globe.
      The Hunan branch of ICBC and it’s 524 provincial locations have built and nurtured strong
corporate relationships with many multinational corporations. It is also responsible for the

                                                143
         financial processing for over 400 large and medium-sized corporations including Wal-Mart,
         Carrefour, Metro and Fiat. The Hunan branch prides itself in providing superior quality, efficiency
         and comprehensive financial services via it’s strong capital strength, diversified financial products,
         professionalism, and good faith.。
              Business introduction refers to www.icbc.com.cn.;email:hngjyw@hr.icbc.com.cn

                                  Hunan Branch International Department Contact Information
      Branch Name                                   Address                                 TEL                   FAX
                                                                                     0731-84446501,
Hunan Branch                  No.619, Middle First Furong Road, Changsha                                  0731-84444883
                                                                                          95588
Hunan Branch Banking
                              No.465, Wuyi Road, Changsha                             0731-84413195       0731-84415348
Dept.
Zhuzhou Branch                No.320, South Jianshe Road, Zhuzhou                     0733-22210350       0733-22210874
Hengyang Branch               No.1, Jiefang Road, Hengyang                             0734-8275169        0734-8221961
Xiangtan Branch               No.1, Middle Shaoshan Road, Xiangtan                    0732-58264405       0732-58265727
Shaoyang Branch               No.389, Hongqi Road, Shaoyang                            0739-5325326        0739--5325326
Yueyang Branch                Nanhu Road, Yueyang                                      0730-8245884        0730-8245733
Changde Branch                No.358, Middle Renming Road, Changde                     0736-7151793        0736-7227280
Yiyang Branch                 No.38, Changyi Road, Yiyang                              0737-4223434        0737-4231780
Yongzhou Branch               South Nanjin Road, Zhishan District, Yongzhou            0746-6233016        0746-6233016
Chenzhou Branch               No.27, Beihu Road, Chenzhou                              0735-2222876        0735-2258780
Loudi Branch                  No.7, East Leping Street, Loudi                          0738-8315029        0738-8315117
Huaihua Branch                No.596, Middle Yingfeng Road, Huaihua                    0745-2715938        0745-2715938
Zizhizhou Branch              No.3, North Renming Road, Jishou                         0743-8236254        0743-8223651
Zhangjiajie Branch            No.29, Huilong Road, Zhangjiajie                         0744-8223635        0744-8223635


           )
         (ⅲ Agricultural Bank of China Limited Hunan Provincial Branch




                                                          144
                                Agricultural Bank of China Limited
                                      Hunan Provincial Branch
Agricultural Bank of China was established in 1951, with its Headquarters located in Beijing. It is
one of prominent state-controlled commercial banks in China. On 15 January 2009, the Bank was
restructured into a joint stock limited liability company. On 15 and 16 July 2010, the Bank was
listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange respectively, which
marked the completion of our historical transformation into a public shareholding commercial
bank. Capitalizing on the comprehensive business portfolio, extensive distribution network and
advanced IT platform, the Bank provides various corporate and retail banking products and
services for a broad range of customers and carry out treasury operations for our own accounts or
on behalf of customers. As at 31 December 2010, the Bank had total assets of RMB10.34 trillion,
deposits of RMB8.89 trillion and loans of RMB4.96 trillion. Our capital adequacy ratio was
11.59%. The Bank achieved a net profit of RMB94,907 million. Now it holds a talented, creative
and competitive team with 444 thousand employees, and affiliates 23.5 thousand outlets stretched
to every corner in Mainland China, two overseas branches in Singapore and Hong Kong, and six
representatives Offices in London, Tokyo, New York, Frankfort, Sydney and Seoul. As at the end
of 2010, there were six domestic subsidiaries including ABC-CA Fund Management Co., Ltd. etc.,
Our major overseas subsidiaries were ABC International Holdings Limited and China Agricultural
Finance Co., Ltd. incorporated in Hong Kong.
In 2010, ABC ranked No. 141 in the global Fortune 500 and it was rated as A1/stable by Moody’s.
ABC Hunan branch is a tier-one branch authorized by ABC Head office with 16 thousand
employees, 14 tier-two branches, a training institute and 873 business outlets. Bolstered by RMB
214.9 billion assets, widest network and elite staff, ABC Hunan branch is competent to provide
comprehensive services and distinctive finance solutions to all its clienteles. It is also adept at
providing customizing products and services to meet individual demands of different customers.


                                               145
         As a designated foreign exchange bank, ABC Hunan Branch can provide various kinds of banking
         services, such as foreign exchange deposits, loans, remittance, settlement and sales operations,
         foreign currency exchange, trade financing, international settlement, etc, to smooth and be in favor
         of the businesses of the investors all over the world. By the end of 2010, ABC owns a network of
         correspondent banks covered 110 countries and regions, composed by a total of 1262
         correspondent banks. ABC is also the first bank to cooperate with West Union Company, by
         providing customers the high quality, the most convenient money transfer. DETAILS ON:
         http://www.95599.cn/cn/

         LIST OF MAIN INTERNATIONAL BUSINESS OUTLETS
           Name                           Address                                           Tel                Fax
HUNAN PROVINCIAL BRANCH. NO.540      FURONG    MIDDLE    ROAD,                        0731-84306360      0731-84416367
                           SECTION 1, CHANGSHA
HUNAN BR. BUSINESS DEPT    NO.336 WUYI ROAD, CHANGSHA                                 0731-84466009      0731-84897667
ZHUZHOU BRANCH             NO.85 JIANSHE SOUTH ROAD, ZHUZHOU                          0731-28295125      0731-28216558
XIANGTAN BRANCH            NO.17 RENMIN ROAD, XIANGTAN                                0731-58254584      0731-58229741
HENGYANG BRANCH            NO.46    JIEFANG   WEST       ROAD,                        0734-8150943       0734-8150941
                           HENGYANG
SHAOYANG BRANCH            NO.152 XIHU ROAD, SHAOYANG                                 0739-5326133       0739-5328969
YUEYANG BRANCH             NO.593 NANHU ROAD, YUEYANG                                 0730-8211021       0730-8220048
YIYANG BRANCH              NO.246 KANGFU NORTH ROAD, YIYANG                           0737-4233272       0737-4233252
CHANGDE BRANCH             NO.37 WULING SOUTH ROAD, CHANGDE                           0736-7254494       0736-7252496
LOUDI BRANCH               NO.91 NANMAO EAST STREET, LOUDI                            0738-8281763       0738-8281970
CHENZHOU BRANCH            NO.3 FEIHONG ROAD, CHENZHOU                                0735-2884502       0735-2882380
YONGZHOU BRANCH            NO.63 HUANGGUSHAN MIDDLE ROAD,                             0746-6222990       0746-6338853
                           LINGLING DISTRICT, YONGZHOU
HUAIHUA BRANCH             NO.486 YINGFENG MIDDLE ROAD,                               0745-2723717       0745-2713862
                           HUAIHUA
ZIZHIZHOU BRANCH           NO.40-1 RENMIN NORTH ROAD, JISHOU                          0743-8728397       0743-8251399
ZHANGJIAJIE BRANCH         NO.38 JIAOCHANG ROAD, YONGDING                             0744-8236366       0744-8286375
                           DISTRICT, ZHANGJIAJIE



            )
          (ⅳ Profile of China Construction Bank Hunan Provincial Branch




                                                         146
 China Construction Bank Corporation is a market leading and large state-owned
commercial bank in China, who has 54 years’ history of operation in China.
Headquartered in Beijing, China Construction Bank Corporation (CCB) Always
adheres to the stable international business strategy and overseas development
strategy, whose marketing networks are worldwide. Till to December 31, 2010, the
Bank had a network of 13,415 branches and sub-branches in Mainland China, and
maintained overseas branches in Hong Kong, Singapore, Frankfurt, Johannesburg,
Tokyo, New York ,Seoul, Ho Chi Minh City and Sydney , as well as representative
offices in Moscow and Taipei . Its subsidiaries mainly include China Construction
Bank (Asia) Corporation Limited (formerly Bank of America (Asia) Limited),
China Construction Bank (London) Corporation Limited, China Construction Bank
(Asia) Limited (formerly Jian Sing Bank Limited), Sino-German Bausparkasse Co.
Ltd. It had established relationships with more than 1,300 correspondent banks in
125 countries in their head office level, which covered almost all major trading
partner countries and regions.

The Bank was listed on The Stock Exchange of Hong Kong Limited in October
2005 (Stock Code: 939), and became the first bank listed overseas among the big
four Chinese commercial banks; The Bank was listed on The Stock Exchange of
Shanghai Limited in September 2009. As of late 2010, total assets of CCB
amounted to RMB 108,103, its full year net profit amounted to RMB 1,350 billion,
its market value is about 2,200 billion U.S. dollars ; its total market value ranked
second among the listed banks in the world and the second; it is regarded as the
most dynamic, robust and profitable bank. In 2011,China Construction Bank

                                        147
ranked No. 10 among Global Bank of Top 500 Brands (by the British Banker
magazine) and ranked NO.3 In the “Top ten global commercial banking brand ”. In
2008, it was awarded as the Best Trade Finance Bank by the U.S. Global Finance
magazine, and it had in pleasure obtained the agent certificates as clearing bank for
Hong Kong Dollars and US dollars for China Foreign Exchange Trading Center.

China Construction Bank Corporation Hunan Branch (CCB Hunan Branch) is a
Provincial branch of CCB with a network of nearly 500. Presently CCB Hunan
Branch has 22 sub-branches, thirteen of which are set in different states and cities in
Hunan province, eight sub-branches and an operational department are set in
Changsha city. From 2005, all the companions in the same banking industry were
surprising at the continuous Six No 1s in local banking industries, which was: loan
amount and new added loan amount were No 1, deposit amount and new added
deposit amount were No1, fee-based income was No1, the number of bank card
issued was No1, the asset quality was No1,the economic benefit was NO1. In 2007
CCB Hunan Branch was awarded as the most influenced financial institution and
was regarded as the bellwether of the financial industry in Hunan Province by the
government of Hunan province.

To enforce the power of credit support and to serve the economic construction in
Hunan is the Highlights and power during the course of development of CCB,
Hunan Branch. In 2010, CCB Hunan Branch issued various types of loans
accumulated throughout the year more than RMB 70 billion. The bank paid high
attention to the economic construction in Hunan province and tried to modulate the
credit policy voluntary. It pooled the wisdom and high strength to support the
project construction in resource, communication, telecommunication, real estate,
city infrastructure and technical reform of quite a lot of key enterprises. It positively
explored the developing discipline of private enterprises and science and
technology enterprises, and successfully assisted many excellent private enterprises,
joint venture and high-tech enterprises. During the course of entirely constructing
affluent society and speeding up the industrialization and urbanization, CCB Hunan
Branch, not in the least, just as in the past persisting in the faith to promote the
economic development and social progress in Hunan province and sincerely
cooperating with all the parties and conspiring to develop, would contribute itself to
realize the dream of Hunan’s rejuvenation and economic take-off.

The devotion of product innovation and branch transformation had made CCB
Hunan branch become the first preferred bank of many customers. The bank has
experienced international business practitioners and worldwide correspondents,
provides professional business lines of International Settlement, Trade Finance,
Loan and Deposit in foreign currencies, Foreign Exchange, International Financing,
Foreign Guarantees, Capital Clearing Services. The bank can also provide money
exchange services, which has endured the market test, such as forward foreign
exchange settlement, Foreign Exchange Trading and other agent constitutional
financial derivatives. This year’s incoming RMB Cross-border Payment service

                                           148
         will be icing on the cake for the bank-enterprise cooperation.


         The website address of CCB: www.ccb.com.cn

         The main international business networks of CCB Hunan Branch: please see
         attached list.


                            The main international business networks of CCB Hunan Branch


         Nmae                                Address                      Telephone No            Fax No
                             Yinggang Bldg.,No 2 Baisha
The Provincial Branch        Road,Changsha                            0086 731-84419539      0086 731-84419895
                             No 85,Section 2,Furongzhong
The Operational Devision     Road,Changsha                            0086 731-84419505      0086 731-84419506
                             No 218Section 3,Furongzhong                                     0086
The Furong Subbranch         Road,Changsha                            0086 731-85297085      731--85297038
The Tianxin Subbranch        No 218,Laodongxi Road,Changsha           0086 731-89781031      0086 731-85141581
The Xiangjiang Subbranch     No 169,Xiangchun Road,Changsha           0086 731-84318683      0086 731-84318683
                             No 219,Tieyin Bldg.,Jiefangzhong
The Tieyin Subbranch         Road,Changsha                            0086 731-84181127      0086 731-84181180
The Hexi Subbranch           No 197,Xinming Road,Changsha             0086 731-88796502      0086 731-88883725
The Huaxing Subbranch        No 277,Jiefangdong Road,Changsha         0086 731-84113953      0086 731-84113953
The Jinxing Subbranch        Bldg 7,No 218,Yueluda Road,Changsha      0086 731-84529692      0086 731-84529682
The Xingsha Subbranch        No92,Tianhua Road,Xingsha,Changsha       0086 731-85246461      0086 731-85246469
The Yiyang Subbranch         Jinyuan Plaza, Yiyangda Road, Yiyang     0086 731-4227005       0086 731-4227005
The Hengyang Subbranch       No 35,Zhengxiang Bei Road,Hengyang       0086 734-8181953       0086 734-8181811
The Shaoyang Subbranch       Jianyin Bldg,No 315,Xihu Road,Shaoyang   0086 739-5326084       0086 739-5326084
                             Finace Bldg,No 85,Jianshe Nan
The Zhuzhou Subbranch        Road,Zhuzhou                             0086 731-28295503      0086 731-28295503
The Changde Subbranch        No130,Dongting Da Road,Changde           0086 736-77240086 71   0086 736-7711851
The Xiangxi Subbranch        No 6,Wuling Xi Road,Jishou               0086 743-8251104       0086 743-8251104
The Chenzhou Subbranch       No 33,Jiefang Road,Chenzhou              0086 735-2358011       0086 735-2889231
The Yueyang Subbranch        N0 310,Nanhu Da Road,Yueyang             0086 730-8241992       0086 730-8241987
The Xiangtan Subbranch       No 198,Jianshe Da Road,Xiangtan          0086 731-58297287      0086 731-58297295
                             No 360, Yingfeng Zhong Road,Hecheng
The Huaihua Subbranch        District,Huahua                          0086 745-2719210       0086 745-2719065
                             No 51,Xiangyong Road,Lengshuitan
The Yongzhou Subbranch       District,Yongzhou                        0086 746-8327531       0086 746-8326339
The Loudi Subbranch          No 38,Changqing zhong Street,Loudi       0086 738-8278938       0086 738-8315131
                             No 90,Beizheng Street,Yongding
The Zhangjiajie Subbranch    Street,Zhangjiajie                       0086 744-8291315       0086 744-8225851



                                                       149
 Contact line:

 China Construction Bank Corporation Hunan Branch

 Address: Yingang building, 2 Baisha Road, Changsha, Hunan, China, 410005

 Tele: (86-731)84419539,      (86-731)84419356

 Fax: (86-731)84419895        Email: hn_gjywb.hn@ccb.com




Ⅳ List of Investment-related Organizations in Hunan Province<top>
 .

Name                                  Address                 Tel                 P.C
Hunan Provincial Development and      8/Xiangfu Road (W),     85990801 85990800   410004
Reform Commission                     Changsha
Hunan Provincial Commission of        351/Wuyi       Road     82212144 82212305   410011
Economy                               (C),Changsha
Department of Commerce of Hunan       98/Wuyi        Road,    82287057            410001
Province                              Changsha                82288189
Hunan       State-owned     Assets    351/Wuyi       Road,    82211272 82211572   410011
Supervision     &    Administration   Changsha
Commission        under     Hunan
Provincial People’s Government
Hunan Provincial Department of        192/Bayi       Road,    84590010 84590980   410001
Public Security                       Changsha
Hunan Provincial Department of        1/Chengnan    Road      85165123 85165183   410007
Finance                               (W), Changsha
Hunan Provincial Department of        18/QingYuan Road,       84900000、84900010   410004
Labor & Social Security               Tianxin District,
                                      Changhs
Hunan Provincial Department of        8/Xiangfu Road (W),     89991111 89991170   410004
State Land & Resources                Changsha
Hunan Provincial Department of        88/Jiefang Road (C),    82212943            410011
Construction                          Changsha                82213110
Hunan Provincial Department of        113/Yingbin    Road,    84443539            410011
Communications                        Changsha                84639078
Hunan Provincial Administration of    118/Furong    Road      85693090 85693093   410004
Industry & Commerce                   (N), Changsha
Changsha Customs Administration       678/the 1stsection of   84781688            410001
of P.R.C.                             No.2 Ring Road (E),     84781085


                                             150
                                      Furong        District,
                                      Changsha
Hunan Provincial Bureau for           188/Xiangfu Road          85627487 85627590       410004
Entry-Exit Inspection and             (M), Changsha
Quarantine
State Administration of Foreign       2/Caie Road       (C),    84301658 84301611       410005
Exchange, Hunan Branch                Changsha
Hunan Provincial       Environment    No.118 3Duan              85698009 85698070       410007
Protection Bureau                     MiddleRoad
                                      Wangjiali Changsha
Hunan Provincial Commodity Price      351/Wuyi        Road,     82212197                410011
Control Bureau                        Changsha
Hunan Provincial Tourism Bureau       40/the 2nd section of     84720346                410001
                                      No.2 Ring Road (E),
                                      Changsha
Hunan Provincial State Tax Bureau     59/Laodong    Road        85552910 85555169       410007
                                      (W), Changsha
Hunan Provincial Local Tax Bureau     181/Yuhua       Road,     85608408                410007
                                      Changsha                  85608427
Hunan Provincial Statistics Bureau    351/Wuyi        Road,     82212812 82212013       410011
                                      Changsha
Hunan     Provincial      People’s    135/Yingbin     Road,     82219798                410011
Government Taiwan Affairs Office      Changsha
Hunan     Provincial       People’s   1/Shaoshan      Road,     82218440                410011
Government Journal’s Office           Changsha
Hunan      Provincial      People’s   1/Shaoshan      Road,     82217148                410011
Government Foreign Affairs and        Changsha          (12
Overseas Chinese Affairs Office       Shaoshan        North
                                      Road)
The Office of Leading and No.168 Middle Road                    85063985                410004
Coordinating Committee of CZT Xiangfu              Yuhua        Email:slxbzhc@163.com
City     Cluster     as    National District Changsha
Comprehensive Supporting Reform
Pilot Area in Hunan Province
Hunan    Provincial  Office  of       No.6 Office building      82688935                410011
Optimizing Economic Development       Shengwei Shaoshan
Climate                               Road Changsha
China Council for the Promotion of    No.1139 2nd Ring          84773335                410016
International    Trade,    Hunan      Road (E), Changsha        84773356
Sub-Council
People’s Insurance Company of         167/Xiangya     Road,     84405111                410008
China, Hunan Branch                   Changsha
Life Insurance Company of China,      128/Shaoshan Road         84302256                410011
Hunan Branch                          (N), Changsha

                                             151
Hunan Association of Enterprises     98/Wuyi Road (E),         82287506 82286819           410011
with Foreign Investment              Changsha
Complaint & Coordination Center of   98/Wuyi Road (E),         82286672                    410011
Hunan Association of Enterprises     Changsha
with Foreign Investment

Ⅴ.List of Municipality-Level Foreign         Investment        Promotion     &   Administration
Organizations in Hunan <top>
                           Subordinate
        Name                                       Tel / Fax           E-mail / Web site
                           departments
                          Liaison Division   0731-88665557
 Changsha Municipal        Administration                        hninvest@yahoo.com.cn
                                             0731-88666055
 Bureau of Commerce          Division                            www.cstrade.gov.cn
                          Project Division   0731-88665564
                          Liaison Section    0734-8217256          Boftec2002@yahoo.com.cn
 Hengyang Municipal
                           Administrative
 Bureau of Commerce                          0734-8221461           Hyzhaoshang@163.com
                             Section

                                                                     lianlk@zzinvest.gov.cn
                          Liaison Section    0731-28681889
  Zhuzhou Municipal                                                    www.zzinvest.gov.cn
 Investment Promotion
and Cooperation Bureau     Administrative                           fuwuk@zzinvest.gov.cn
                                             0731-28681898
                             Section

                                                                       hnxtswj@163.com
                          Liaison Section    0731-58570425
 Xiangtan Municipal
                                                                           www.xtwjm.com
 Bureau of Commerce
                           Administrative
                                             0731-58570378                 Kfj.3f@163.com
                             Section
                                                                       sywmzs@yahoo.com.cn
                          Liaison Section    0739-5432661
Shaoyang     Municipal                                                  www.sy-invest.com
Bureau of Commerce         Enterprise
                                             0739-5432675
                            Section
Yueyang       Municipal   Liaison Section     0730-8211088                  yyzhzhch@163.com
Investment    Promotion   Administrative                                   ZD@yyfet.gov.cn
and Cooperation Bureau                       0730-8880496
                          Section                                          www.yyfet.gov.cn
                                                                      gcydt@tom.com
                          Liaison Section    0736-7712184
  Changde Municipal                                                  www.changde.gov.cn
 Bureau of Commerce       Administrative
                                             0736-7712134              cdglk@21cn.com
                          Section


                          Liaison Section    0744-8226613             zjjcommerce@163.com
Zhangjiajie  Municipal
Bureau of Commerce
                           Administrative
                                             0744-8223452
                             Section

                                             152
                                                           invest@yiyanginvest.gov.cn
                          Liaison Section   0737-4220001
                                                            www.yiyanginvest.gov.cn
Yiyang      Municipal
                          Promotion
Economic   Cooperation                      0737-4235001
                          Section
Bureau
                          Administrative
                                            0737-4236001
                          Section
                                                              czszsj666@163.com
Chenzhou      Municipal   Liaison Section   0735-2368283
                                                             chenzhouinvest.gov.cn
Investment    Promotion
                          Administrative
and Cooperation Bureau                      0735-2368284
                          Section
                                                               hn@yztzw.com
                          Liaison Section   0746-8368204
Yongzhou     Municipal                                        www.invest.hnyz.cn
Bureau of Commerce         Administrative
                                            0746-8366289
                             Section
                                                              hhswjmj@sina.com
                          Liaison Section   0745-2715508
Huaihua      Municipal                                        www.hhinvest.gov.cn
Bureau of Commerce         Administrative
                                            0745-2716602    hhswltzqyxh@sohu.com
                             Section
                          Liaison Section   0738-8313290    qfwengllk@hotmail.com
Loudi Municipal Bureau
of Commerce               Administrative
                                            0738-8313131    Ljw6921k@vip.163.com
                          Section
                                                             xxlianluoke@163.com
 Xiangxi Autonomous       Liaison Section   0743-8528290
                                                              www.investxx.com
 Prefecture Bureau of
                           Administrative
      Commerce                              0743-8528291     xxguanlike@163.com
                             Section




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