PROFESSIONAL COMMENT----Shenzhen Investment
Ⅰ.Shenzhen Brief Introduction
Shenzhen is located in the very south of Guangdong Province. Overlooking Hong Kong to the south and bordering New Territories, this area is commonly referred to as Hong Kong's "backyard". Although the population of the city is about 5 million, only 1.5 million people are legally registered permanent residents. The remainder are a bizarre mixture of businessmen, investors and illegal immigrants, all here in an attempt to get a share in the Special Economic Zone's wealth.
Ⅱ. Beautiful environment of Shenzhen
Lying by the sea and mountains, Shenzhen is an evergreen city, with beautiful sceneries and sound weather. Shenzhen has subtropical oceanic climate, with average annual temperature of 22.40℃,and average annual rainfall of 1933.3mm. Such theme parks of Shenzhen as "Windows of the World", "Splendid China",and "Minsk Aircraft Carrier"are famous in the whole country. Shenzhen owns multitude of entertainment and recreation sports as public gardens, beaches,bathing beaches, etc. Green grasses are seen everywhere in the city.
Shenzhen has set up 7 international-standard golf courses, and many international and domestic golf competitions are held annually in the city. In year 2000, Shenzhen won the "international Garden City"prize.Vigorous Shenzhen abounds in endless commercial Opportunities, and the free trade zones, with their unique advantages, have become the first choice for investors.
Ⅲ. Climate in Shenzhen
The climate in Shenzhen is fairly similar to that of Hong Kong and temperatures here can be almost subtropical with intense summer heat and lots of rain! The summers here are exceptionally long, running for about six months and temperatures can reach 35 degrees C. The winters in this city are much more bearable however, and temperatures rarely drop below 10 degrees C. August and September are the best seasons to visit when the temperature is pleasant and the days are long. Shenzhen has abundant rainfall particularly during May to September so make sure you bring your umbrella!
Ⅳ. Convenient Transprotation in Shenzhen
Shenzhen owns a three-dimensional transportation network of sea, land and air.The throughput of containers of Shenzhen port in year 2001 was up to 5.07 million TEUs, second only to Shanghai in China mainland, and ranking the eighth in the whole world. Shenzhen international Airport is the fourth largest one in CHina mainland. Shenzhen neighbours Hong Kong, with China's largest passenger land port----Luohu Port,the largest freight land port----Huanggang Port, as well as Wenjindu port and Shatoujiao port connected to Hong Kong .The highways, expressways, and railways from Shenzhen extend in all directions. Shenzhen connects Guangzhou-Shenzhen and Shenzhen-Shantou Expressways,and Beijing-Guangzhou and Beijing-Kowloon raiway arteries join in Shenzhen. Shenzhen Subway Phase I project will be completed and put into operation by the and of 2003.
Ⅴ.Shenzhen Investment Environment
1.A Key Economic Base Town in South China
1). Regional Advantages
Shenzhen is situated at the frontier of the Pearl River Delta, and joins New Territory Hong Kong to the south. Facing Daya Bay to the east, connecting to Zhujiang River mouth to the west, and neighboring Dongguan City and Huizhou City to the north, Shenzhen with 12 ports is a transportation hinge in the costal area of South China. Meanwhile, Shenzhen is the only city in China Mainland that has sea, land and air ports meantime.
Shenzhen Port ranks the fourth among container ports around the world. Shenzhen has the largest land passenger ports of China, Luohu Port and Huanggang Port. Guangzhou-Shenzhen and Shenzhen-Shantou expressways as well as Beijing-Kowloon and Guangzhou-Shenzhen railways closely bring Hong Kong, Shenzhen and inland cities together.
At present, Shenzhen-Hong Kong ports have successfully launches the 24-hour customs clearance and paperless inspection. With the construction of the western bridge, the integration between Shenzhen and Hong Kong will be further promoted. The air freight industry of Shenzhen ranks the thirty-seventh in the world. With the support of Hong Kong International Airport, goods from Shenzhen can reach any of the major cities of Asia within 5 hours. Relying on its special geography, Shenzhen enjoys highlighted regional advantages, which not only furthers economies of both Shenzhen and Hong Kong, but also serves a link and bridge for Hong Kong to be connected with the inland regions as well as other parts of the world.
2). Economic Scale
In 2005, the total output of Shenzhen reached RMB 492.690 billion, and the total retail sales of consumption commodities amounted to RMB 143.767 billion. The total imports and exports reached USD 182.860 billion, among which, the exports were USD 101.500 billion and the imports being USD 81.350 billion. The exports in Shenzhen have ranked top among large cities of the country for 13 years consecutively. In 2005, the added value of the city’s industries above designated scale reached RMB 227.290 billion, and output of hi-tech industries reached RMB 490.00 billion, among which, the output of hi-tech products with independent intellectual properties accounted for 58%. By end of 2005, aggregated actually utilized foreign funds reached USD 30.300 billion.
The total imports and exports of Shenzhen have maintained the first position in China for 13 years successively, accounting for about 13% of those of the country. In 2005, the disposable income per capita of Shenzhen reached RMB 21,494.40, and its GDP per capita ranked the first in China Mainland.
2.Perfect & Complete Environment with Industrial Chains
Shenzhen, and even the entire Pearl River Delta, is the region with the densest cluster of industrial and commercial enterprises in China. This region features rich labor resources, high level of technological strength, convenient transportation and excellent logistics services, which offers Shenzhen the atmosphere of a manufacture industrial cluster. In the area centered by Shenzhen, you can purchase almost all electronic components, hardware products, raw chemical materials, textile products, and agricultural by-products within 3 hours. Delivered from factories, products can reach every part of the world via the ports and air freights of Shenzhen and Hong Kong within 2 hours.
Based on the basis of the manufacture industry, Shenzhen has fostered a unique industrial structure diversified with garments, gold and jewelry, clocks and watches, underwear, furniture, moulds, leather, artistic gifts, printing, toys, consumer electronic products, household electric appliances, computer components, IC, semi-conduct illumination, cartoons and animation, biological medicine, fine chemical industry, and others.
The electronic information industry of Shenzhen is the largest in China. The output of color TV sets, computers and SPC exchanges and exports of its software products rank the first in the country. The electronic information industry has been the backbone industry of Shenzhen with the growth rate, the competitive strength, and the industrial relevancy, the success of which has well propelled the increase and improvement of traditional industries such as machinery, garments, clocks and watches, toys, and moulds industries.
Shenzhen boasts a perfect supporting system for the electronic information industry, covering basically computers, communications, household electric appliances and other related industries. Currently, the city has built national level corporate R & D centers, including 5 of the electronic information industry, and there are 10 enterprises with annual sales over RMB 5 billion, and 18 over RMB 1 billion in the industry. Shenzhen’s patent application related to information technologies has been in the first position several years successively. In 2005, Shenzhen’s trade amount of electronic information products reached RMB 100 billion.
The significance of industrial clusters has been fully recognized by both leaders from the Shenzhen Municipality and experts from the economic and academic world. Great efforts have been taken to construct industrial bases for the industrial clusters, and to attract leading enterprises to station in and actively develop leader industries.
3.Top Class Infrastructure and Resources
The telecommunications market of Shenzhen is fully competitive, with the networks covering every corner of the city, and enabling consumers to have free choice in the mode and provider of telecommunications. Shenzhen possesses natural deep-water harbor, and is increasing the investment in building new freight wharfs to satisfy the ever-increasing demands for freight transportation. Through the express arteries connected to the wharfs, container trucks can conveniently commute between sources of goods and the wharfs.
In 2004, the container throughput of Shenzhen Port ranked 4th in the world, reaching 13.65 million TEUs. Shenzhen Port has become a major beachhead for international freight transportation. Currently, Over 40 world famous container shippers have set up 146 offshore and ocean international container liner courses in Shenzhen Port.
Shenzhen Airport ranks the 46th in freight transportation in the world. Its domestic flight courses cover all major cities of China, and the international courses include 9 international (regional) freight courses commissioned by FedEx, China Southern Airlines, Macau Airlines, etc. The destinations include the United States, Japan, South Korea, Belgium, Singapore, Malaysia, Thailand, Philippines, Taibei, and Macau. The entry/exit planes reach 150-plus sorties per week.
Shenzhen and Hong Kong have established close cooperative relationship with regard to their airports. One-stop customs clearance for both passenger and freight transportation have been realized. Seamless connection is the ultimate target of airports of the two cities. Goods can be transported to every corner of the world from Hong Kong Airport via express channels.
Shenzhen’s railways and highways are a major part of the traffic system of China, as well as an essential hinge to connect Hong Kong with China Mainland. The convenient highway network system enables Shenzhen people to reach even the remotest villages of the country.
Shenzhen is situated in the domain of the southern water system of China. Even in the driest seasons, water supply for both residents and industries of Shenzhen can be guaranteed. Shenzhen’s power plants ensure 70% power supply for industries and residents of the city. Based on cooperation with other provinces rich in energy sources in the Pan Pearl River Delta, Shenzhen obtains prior support for power supply.
4.Fair Market Environment
1). Protecting of Intellectual Properties
Since 2004, Shenzhen has been releasing white books on the status of intellectual properties on an annual basis. The white books timely and objectively reflected the creation, management, utilization and protection status of intellectual properties for the whole city, enabling both domestic and foreign investors to have a clearer understanding of the status of Shenzhen’s intellectual properties, as well as further improving the conscience of the whole society over intellectual properties, so as to promote independent innovation of intellectual properties, and protect legal rights and interests of investors both domestic and overseas.
① Construction of Legislative and Judicial Systems
Shenzhen Municipality has promulgated a series of policies and ordinances related to intellectual property. In 2004, Shenzhen set up the Municipal Bureau of Intellectual Properties. In 1994, Shenzhen established a specialized trial court for intellectual properties cases. Nanshan District People’s Court set up the trial court for intellectual properties in 2004. The People’s Procuratorate of various level in Shenzhen are in charge of litigation examining and suit bringing in respect of criminal cases on infringement of intellectual properties. In 2002, Shenzhen Municipal Bureau of Public Security set up the first professional criminal law-implementing unit related to intellectual properties.
② Optimized and Systematical Law and Policy Environment
In addition to existing regulations of the Municipality, including Regulations for the Protection of Corporate Technological Secrets, Regulations for Severely Striking on Illegal Behaviors of Producing and Selling Fake and Inferior Commodities, Provisions for the Implementation of the Law of the People’s Republic of China for Countering Unfair Competition, Measures for the Evaluation and Sales Handling of Intangible Assets, Administrative Measures for Stock Ownership through Technological Achievements, and Administrative Measures of Shenzhen Municipality for Sponsoring Patent Application, the city further released in 2004 a series of policies and measures concerning intellectual properties, integrating the contents of intellectual property management and protection into the formulation and implementation process of various regulations and policies.
2). Building Orderly Market Competition
① Organizing Campaigns on Protection of Intellectual Properties
Shenzhen has organized the campaign of “protecting genuine software and striking pirate software”, and has successfully protected famous brands including INTEL, HP, LENOVA, ZTE, etc.
② Financial Support for Patents
③ Self-Discipline Mechanism of Industries
3). Closing Regional and International Cooperation (additional cooperation matters with the WTO)
In 2002, Shenzhen established the WTO Affairs Center, adopting consultation, training, forum and legal service measures to provide relevant professional services, dedicated to maintaining a fair trade order.
Meanwhile, government departments on fair trade and patent affairs have organized academic exchanges with famous foreign agencies including WSGR, KBS, BSKB, etc. Owners of famous global brands are invited to strengthen internal trainings for relevant law-implementing personnel, and liaison has been strengthened with international organizations such as IFPI. And information exchange channels have been established well in this city.
5.Enormous Market Potentials
1)Markets for Consumption Products
Through Shenzhen, you can reach an enormous market centered by Shenzhen, within 3 drive hours from which, there is a population of 50 million that represents the strongest purchasing power and leads the consumption vogues and trends in China. Basing on convenient transportation network, and supported by a singular market with a population of 1.3 billion, Shenzhen sees an appealing vision.
2)Corporate Consumption Market
There are 180,000 enterprises and 200,000 small sized private shops and firms in Shenzhen. The Pearl River Delta where Shenzhen sits in is the region with the most active and prosperous industries and commerce in China, with a good number of enterprises, which is a great support to corporate and raw industrial material consumption markets.In 2005, the fixed asset investment in Shenzhen reached RMB 117.613 billion, seeing a year-on-year increase by 7.6%.
3)Global Procurement Center
In Shenzhen, lots of firms provide products with world level, yet they maintain a much lower production costs compared to like providers from other countries. The industrial supporting ability and radiation capacity of Shenzhen provide an ideal environment for transnational companies to set up their global procurement centers. Currently, more than 40 transnationals have set up their procurement centers in this city, among which are Wal-Mart, IBM, GE, McDonald’s Carrefour, Alcatel, SONY, Panasonic, Motorola, Phillips, INTEL, Omron, DuPont, and others. Bring your products with competitive edges, and the markets are there in Shenzhen.
Ⅵ. Cultural Features of Shenzhen
Shenzhen is newly developed city of migrants. Only 25 years, and Shenzhen has grown from a small fishing village to be a metropolis with a population over 10 million. The contribution and ambitions of migrants have been motivating the hi-speed growth of the city in the sense of social life, economy and culture. Meanwhile, people have brought in diversified life styles, values and cultures, which have formed the unique immigrant culture of Shenzhen.
1).An Open Mind and Inclusive Cultures
The Shenzhen culture not only inherits the Chinese culture, but also enriches itself with the elements of different cultures centering that of Hong Kong. The unique geography and population of Shenzhen have brought forward the open, inclusive and innovative features of the Shenzhen culture, which also makes Shenzhen a city of hope and vitality most suitable for talents from both Mainland and overseas talents to live and start their businesses.
Shenzhen is the earliest opened region in China. Enjoying relatively more mature market economy mechanism, Shenzhen people have a stronger sense of business, and have keen senses of business opportunities, and have more profound understand over the operation of business.
3).Young Age Structure
In China, Shenzhen is unique for it’s one so young yet so lively. The average age of Shenzhen people is less than 30. Most have come for their ideals. Besides passions and enthusiasm, they have also brought in expertise and techniques. Many of those immigrants have grown the
backbone supporting development of this city.
4).Encouraging Innovation, Forgiving Failure and Pursuing Excellence
Shenzhen people impress others most with their spirits of unwavering efforts and restless innovation. In the history of Shenzhen, people have created a series of Number Ones in China. In other aspects, such as the land reform and the development of the financial industry, Shenzhen people have taken the lead for brave trying. Without the courage to ponder, to try, to do and to experience, without the concept of exploitation, inclusion and innovation, there couldn’t be the Shenzhen today.
According to Global Entrepreneurship Monitor Hong Kong and Shenzhen 2004, the immigrant culture of Shenzhen features most of activity and hard work. One in eight adults of Shenzhen is starting his/here own business. They respect practicality and deny void talks. Shenzhen people think highly of competition, and are willing to survive and develop in an environment full of competition.
Ⅶ. Abundant & Highly Skilled Human Resources In Shenzhen
Shenzhen boasts abundant human resources. By end of 2005, there were 791,000 technicians in the city, among which 305,200 had intermediate professional titles or above. Shenzhen people highlight the spirit of innovation, diligence and enterprising, which have contributed a lot for Shenzhen’s great achievements in the economic growth.
1.The City of Attraction for Talents
Shenzhen is a domestic city with extraordinary attraction for the Chinese people, and more for the talents, with its fair and miraculous opportunities, especially the chances for development. With population grown from the original 300,000 twenty-five years ago to the present number of 10 million, recording an increase by 30 times.
In the hi-tech and service trade industries, especially, high level talents find their stages in Shenzhen. Young people with ambition and talents always find themselves filled with pride working in this city. Shenzhen welcomes over 30,000 graduates from various universities each year.
The innovative atmosphere of Shenzhen enables the prompt industrialization of knowledge. Talents from both China and overseas have crowded to Shenzhen for investment and initial business. Currently, there are over 5,000 overseas graduates in Shenzhen who have set up 300-plus hi-tech enterprises, covering hi-tech fields to include electronic information, biological medicine, optical-mechanical-electric integration, new energy, new materials, etc.
2.Capital of Creativity
Shenzhen is the most creative city with public recognition in China. Its output of hi-tech products accounts for nearly 60% of the total industrial output, and sees an increase by 40% annually. Its labor productivity ranks top in China. The GDP per capita of Shenzhen has exceeded USD 7,000. All the achievements have owed so much to the high quality labor force of Shenzhen.
People in Shenzhen enjoy studying novel things. As well educated most of them, they are keen on learning updated techniques, eager to keep up with the trends and maintain competitive edges.
3.Perfect Talent Mechanism
By end of 2005, there were 1,380 schools in Shenzhen, yielding 208,100 graduates, enrolling 290,200 new students, and with 1,047,400 in-school students. During 2005, colleges of Shenzhen enrolled 15,000 freshmen, and yielded 9,100 graduates, with 45,300 in-college students.
Shenzhen has set up 5 international schools and 3 schools for children of Hong Kong people working in Shenzhen. Shenzhen possesses 10 full-time higher education institutions, including graduate schools set up by Tsinghua University and Harbin Institute of Technology, etc. A virtual university park combining over 40 domestic and foreign universities has been established in the city. The Virtual University Park has adopted the internationalized development mode, and initially grown into a university technology park integrating styles, trends and cultures of universities stationed in. In respect of hardware investment, Shenzhen has been shouldering the standards of intermediately developed countries. Shenzhen has been honored as the first “Strong City of Education” in Guangdong Province.
Shenzhen’s university town has attracted first class educational institutions from China and overseas to set up their campuses and offices in the town.
Shenzhen Municipal Government encourages vocational education facilities of the private sector to provide training opportunities for the labor force. The reeducation ratio of social laborers of Shenzhen has exceeded 40%.
Shenzhen has constructed a comprehensive environment for training of talents. People from every part of the country work and study here in Shenzhen, and bring their experiences to other cities, making Shenzhen a significant distribution center of talents in China.
Ⅷ. Major taxation items in shenzhen
Category of tax
Enterprise income tax
Income derived from manufacturing,business operation and other resources
Manufacturing enterprises with an operation period of over 10 years are, upon their profiting year,free of taxation for the first 2 years,and levied by half for the following 3 years (8years for hi-tech enterprises).Those enterprises with over 70%of their products exported will be levied by 10%from the 6th year(11th year for hitech enterprises) on.
Income derving from providing taxable services, transferring intangible assets, or selling realestate
Individual income tax
individual taxable income
Individual monthly taxable income is the remaining sum of monthly income deducted 800 yuan
Commodities imported from the free trade zone and sold in domestic market
Product exports and transactions within the free trade zone are free of value-added faxes
Taxable consumption commodities imported via the free trade zone
Ⅸ. Salaries, insurance and welfare for employees in shenzhen
The salaries of the employees are determined by the enterprises on their own .
Salary for workers:800-1500RMB/month.
Salary for management personnel:2000-5000RMB/month.
Lowest salary for Shenzhen SEZ in year 20001:574 RMB/month.
Social insurance fees account for about 21%of the salary of an employee.