Guangxi
 
Inner Mongolia|Shaanxi|Tibet|Guizhou|Guangxi|Yunnan|Xinjiang|Gansu|Ningxia


Chairman:
Li Zhaozhuo
Capital: Nanning
Government office address: 1 Minyue Road, Nanning
Telephone: 0771-2807778
Website:www.gxi.gov.cn

Geographical location
Located in south China, Guangxi Zhuang Autonomous Region is a coastal province. It occupies a land of 236,700 square km, accounting for 2.5 percent of the nationí»s total and ranking ninth among all the provinces.
I. Geography and natural conditions
 

Elevation extremes

Situated in the southeast ring of the Yunnan-Guizhou Plateau, the highest point of Guangxi stands at 2,141 above sea level.

 Natural resources

(1) Water resources

Thickly crossed by rivers, Guangxi is rich in water resource. It is estimated that the surface water flowing in the province amounts to 188 billion cubic meters, accounting for 6.9 percent of the nationí»s total and ranking fourth among the provinces. The per capita possession of water resources in Guangxi is 4,101 cubic meters, nearly double the national average. The three largest water systems running through the province are Zhujiang (Pearl River), Yangtze and Duliu rivers.

 Because of the abundant water resources, Guangxi is estimated to have an energy potential with a power generating ability coming to 78.8 billion kw/h annually. Statistics of 1999 showed that existing hydropower stations in Guangxi had a total installed capacity of 6.1 million kw, with the annually generated electricity being 24.73 billion kw/h, leaving an immense room for development.

 (2) Minerals

Guangxi is known for having various mineral deposits, and it serves as one of the 10 important production bases of nonferrous metals in China. The number of proven mineral resources comes to 96, including 53 of which the deposits ranks 10th or above among provinces. The region has especially abundant reserves of manganese and tin, which amount for one third of the national total. In addition, Guangxi takes a leading role in having the reserves of vanadium, tungsten, antimony, silver, aluminum, talcum and so forth. What makes the province a favorite place for mineral development and production is that the mineral resources are found relatively concentrated lying beneath the earth.

 (3)Tourism

The picturesque scenic spots in Guangxi are famous worldwide, symbolized by Guilin, a natural beauty produced by unique karst geography. At present, the province has established several tourist attractions including three state-level natural scenic spots, six state-level natural reserves, 30 provincial-level natural scenic spots, 15 state-level cultural and historical relics, 221 provincial-level cultural and historical relics, 19 forest parks and 10 summer or winter resorts.

 (4) Marine resources

The southern section of Guangxi is ringed by seacoast. Becaust of the geographical location, the region has every reason to develop fishing, marine chemistry, marine resources and ocean tourism.

 (5) Sub-tropical Vegetation and Animals

By now, 929 kinds of land-based vertebrate animals are found in Guangxi, accounting for 43.3 percent of those found in China. Among these wild animals are 149 kinds which are rare species.

 Guangxi ranks first among the Chinese provinces in homing to the rare species of plants. About 8,354 wild plants have been found in the region, including 122 kinds which are near distinction and need special protection.

 (6) A kingdom of fruits

Among the 670 species of fruits growing in China are110, which at present take their roots in Guangxi. As the tropical or sub-tropical fruits account for 80 percent of the total growing there, Guangxi is regarded as a leading province in China to produce and export the delicacies. The region is well known for high-quality shaddock, banana, pineapple and orange. The year 1999 saw Guangxi putting out a total fruits of over 4 million tons, ranking first among the Chinese provinces.

 (7) Vast stretches of natural forests

The survey made in 1999 showed that that forests in Guangxi occupied a land of 10.6 million hectares, the rate of forest cover was 39.26 percent, and that the accumulation of growing woods totaled 277 million cubic meters. Good climate and geographical location enables Guangxi to have as many as over 8,000 tree species, including more than 1000 kinds of arbor. Most of the precious forest resources are seen concentrating in the northeast section and Baise area, where about 39 percent of the provinceí»s timber products are put out.

 (8) Environment and current issues

A record of 1999 showed that 12 major pollutants coming from the industrial discharges were put under well control in the region according to state statute in environment. In Nanning, Guilin and Beihai, three cities subjected to intense environmental care, the environment quality has reached the national standard for important cities and scenic spots. The air quality in major cities and towns in the province have all reached the second level. About 80 percent of the local rivers are maintained clean or basically clean.

 
II. Population
 
Total population: 47.13 million (1999)

 Population growth rate: 9.42 per thousand (1999)

 Life expectancy (average):

 Ethnicity

Guangxi is multi-ethnic region, where a number of ethnic groups live, including the largest groups such as the Zhuang, Han, Yao, Miao, Dong, Mulam, Maonan, Hui, Jing, Yi, Shui and Gelao, and some 25 smaller ones. The people of ethnic minority groups came to 17.956 million by 1999, accounting for 38.1 percent of the regioní»s total. The Zhuang is the largest ethnic minority group in the region, which has a population of 15.38 million.

 Literacy

The statistics available in 1999 showed that Guangxi had 157 primary schools, 36 middle schools, 22 polytechnic schools and three colleges specially for the students of minority nationalities. This enables the ratio of the schooling students of minority nationalities to exceed that of the population in the regioní»s total.

 

 
III. Economy
 

 

GDP :  200.168 billion yuan (1999)

 GDP growth rate:  8.3 percent (1999)

 Average GDP per capita:  4,247 yuan (1999)

 GDP ratio (1st, 2nd and tertiary industries):

The year 1999 witnessed a rapid development of the tertiary industry in Guangxi, the added value of it stood at 71 billion yuan, accounting for 35.48 percent of the GDP. In comparison with the booming of the second and tertiary industries, the rate of the first one in GDP was declining, which accounted for 28.99 percent.

 Poverty alleviation plan

The population living under the state-regulated poverty line was 15 million in the region in 1984, sharply reducing to 1.69 million in 1999, accounting for 4 percent of the regioní»s total.

 Inflation rate

 Unemployment rate

 Revenues: 17.53 billion yuan (1999)

 Industrial output value: 163.64 billion yuan; 7 percent (1999)

 Agricultural output value: 88.26 billion yuan (1997), 7.7 percent (1999)

 Foreign trade:

The total foreign trade volume reached US$17.53 billion in 1999.

 Foreign investment

Guangxi had attracted foreign investors from over 100 countries and regions by the end of 1998, investing in 8,802 overseas funded projects, with the actual-used capital totaling US$8.003 billion. In 1999, 223 projects with foreign investment were registered, with the actual-used capital being US$921 million.

 Pillar Industries:

(1)   Power industry with the hydropower as the mainstay;

(2)   Nonferrous metal industry (The output of 10 leading products came to 523,100 tons, worth of 10.37 billion yuan.);

(3)   Building materials industry (cement, plate glass, ceramic, granite and marble); and

(4)   Machinery industry (automobile, internal-combustion engine, engineering machines, agricultural machines, electric devices, petrochemical equipment, heavy-duty machines for mining, packaging equipment, equipment for sugar producing, power-generating equipment)

 


 
IV. Telecommunications
 

Telephones

In 1993, program-controlled telephone system was available in every county in Guangxi. By 1999, the telephone network in the region was enlarged to a great extent, providing service to 1.89 million customers of telephone, 750,000 customers of mobile phone, 1.92 million customers of pager and 35,100 customers of IP card. In 1999, telephone was available in 13,037 villages, accounting for 87.7 percent of the regioní»s total; the local post offices had a turnover totaling 6.46 billion that year, up 23.5 percent over 1998.

 Radio and TV stations

In 1999, the region had 26 TV stations, 22 radio stations and 13 cable TV stations, totally covering 88.3 percent of the regioní»s population.

 

 
V. Transportation
 


Railways

By the end of 1999, the total rail line on operation had stretched to 3,120 km.

 Highways

By the end of 1999, the total highways open to traffic was as long as 51,378 km.

 Waterways

Guangxi has a coastline stretching for 1,595km, along which 21 sea ports have been established, including 18 large-capacity and deep-water berths. Guangxi is believed to be the best place in south China to do sea transportation because of its geographical location.

 Airports

By the end of 1998, Guangxi had build five airports respectively in Nanning, Beihai, Liuzhou and Wuzhou, which link with 109 air routes (including 99 domestic, five regional and international ones) operated by 12 airlines.

 

 
VI. Projects wanting foreign investment
  The sectors that local government encourages foreign investment include infrastructure, basic industries, high-tech industry, export-oriented production bases, comprehensive agriculture projects and technical innovation of old enterprises.

 The projects that the local government encourages foreign investment include: construction of Hongshui River hydropower station and other hydro- and thermal power stations, river and sea ports, rail roads and high-grade highways. Those projects in which foreign investment is just permitted include: real estates and the development of large pieces of land. Those belonging to the tertiary industry will be open to foreign investment step by step, which include: finance, trade, transportation and tourism. It is encouraged that township and private enterprises make efforts to lure foreign investment or do manufacturing with imported materials and models.

 The existing enterprises are encouraged to do technical innovation by using overseas funds. While establishing Chinese-foreign joint ventures or corporations, the Chinese side is permitted to be a shareholding partner in terms of land, workshop, equipment and property. These enterprises may try a new system called í░one factory, two systems.í▒ Under this system, a state-owned enterprise may allow one or several subsidiaries of it to do joint venture with foreign partners. The foreign side may join the shareholding company with its advanced techniques. Foreign investors are encouraged to run Chinese enterprises of state, collective and private ownership by contract.

 Foreign investors are encouraged to develop large stretch of land, where infrastructure has not been constructed yet. After acquiring land-using license, the foreign developers are permitted to do all the planning and designing except post and telecommunication and port construction. Those construction projects in the foreign-developed zone, which are not fit in with the general plan of civil engineering made by the local government, should be submitted to the government departments concerned for examination and approval.

 The land-use period for foreign developers may be as long as 70 years, during which the land can be transferred, leased and mortgaged. The foreign developers are allowed to enjoy a 10-30 percent discount in paying the land-use fees.    

 

 
VII. Favorable policies for foreign investment
 


(1)   The existing policies that the central government made in this regard:

A)    The policies applicable to the whole region

---- More rights are given to the local government in approving foreign investment projects which are in accordance with state policy in construction, production and operation, which do not need extra state support in foreign currency use, which have nothing to do import and export quota and license and which involve a total investment lower than US$30 million.

---- The foreign-invested projects, which are in accordance with the Guidelines for Industries with Foreign Investment and which involve technical transfer, should be exempted from paying custom duties and import added-value taxes.

---- The custom duties and import added-value taxes on some self-used equipment may be exempted for the projects with domestic investment, which are in accordance with the Guiding Catalog of Industries for Foreign Investment.

---- Those productive projects with foreign investment, which are designed to have a business period of over 10 years, will be exempted from paying enterprise income tax in the first and second profit-gaining year and enjoy a reduction of enterprise income tax by half during the period from the third and fifth year.

---- Since 1994 when the taxation reform was introduced, the added-value tax, consumption tax and business tax have been applicable to all the overseas-funded and foreign-invested business. However, those foreign-invested enterprises, which were established before December 31, 1993, are permitted an exception. These enterprises are allowed to enjoy a drawback to some extent for five years starting from 1994.

---- The foreign-invested enterprises are exempted from paying custom duties and the import added value tax for importing spare parts and raw materials for production of export-oriented goods.

---- The foreign-invested enterprises are exempted from paying custom duties and the import added value tax for importing fuel (not including auto-used gas), grinding materials, catalytic agent and so forth necessary for the export-oriented production.

---- Starting from January 1, 1998, the foreign-invested and domestic-invested projects, which were approved by the government during period from April 1, 1996 to December 31, 1997 or were purchasing equipment from overseas by using the loans provided by foreign governments or international organizations, are exempted from paying custom duties and import added value tax.

---- After the regulated duty-exemption period for foreign-invested enterprises expires, those investing in agriculture, forestry and animal husbandry and those based in remote and under-developed regions are permitted to enjoy amount of tax exemption for some years to come, with the approval of the taxation department under the State Council.

---- The Chinese-foreign joint ventures, which are devoted to the construction of ports or wharfs, are permitted to enjoy a total exemption of enterprise income tax during the first five-year period of profit earning and half reduction in the following five years.

---- The foreign-invested enterprises with a business period of over five years, which decide to increase their registered capital by using the profit derived from the investment or investing in new projects to contribute to the local economy, are permitted to enjoy a tax reduction by 40 percent.

---- Foreign-invested enterprises devoted to high-tech production are permitted to enjoy tax reduction for a longer period than others.

---- After the state-regulated tax-exemption period, foreign-invested enterprises devoted to export-oriented production whose annual export output value exceeding 70 percent of the annual total are entitled to half reduction of enterprise income tax at the present tax rate.

---- Except for state insurance premium, welfare and housing subsidies, foreign-invested enterprises devoted to high-tech and export-oriented production are exempted from surrendering various state-to-employee subsidies.

---- Foreign-invested enterprises are exempted from investment-oriented adjustment tax on fixed assets, added educational tax and urban maintenance tax.

  

B) The policies applicable to special zones:

---- Those productive projects with foreign investments in the following areas are eligible to an reduced income tax rate of 24 percent. These areas include Beihai, Nanning (excluding Wuming and Yongning), Gangkou District of Fangchenggang, Wuzhou, Yulin, Qinzhou (excluding Pubei and Lishan), Cangwu County, Hepu County, Fangcheng District, Pingxiang and Dongxing. A reduced tax rate of 15 percent is allocated to projects in the fields of energy, transportation, port, dwarf and technology and knowledge-intensive projects utilizing direct foreign investments, or projects with a foreign-invested volume exceeding US$30 million and with a long investment-returning period.

---- For foreign investors, dividends, interests, rents, monopoly-right fees and other proceeds gained from Beihai, Nanning and Gangkou District of Fangcheng without correspondent organizations can enjoy a reduced 10 percent income tax rate together except those enjoying legal tax exemption. The municipal government withholds the power to grant further preferential policies to projects involving favorable capital conditions or advanced technological transfers.

---- Under State ratification, the costal open cities can delineate definite area to establish new economic and technological development zones, where the joint ventures with productive projects are allowed a reduced 15 percent income tax rate.

---- Export-oriented, inland-related productive enterprises in the boundary economic cooperation zones are entitled to a reduced 24 percent income tax. But once the profit is surrendered to the inland area, the investor-based area will over-impose a 9 percent tax.

---- Cross-border enterprises are allowed to set up. Those with investment volume below US$ 1 million can be examined and ratified by the Guangxi government and can receive charters authorized by the Ministry of Foreign Trade and Economic Cooperation.

---- Commodities exchanged on the boundary markets by local residents, so long as they value less than RMB1,000 per day per person, are exempted from custom duties and import added value tax.

---- Between 1996 and 1998, for boundary small-volume trading enterprises that imported commodities from neighboring countries via designated ports, half custom duties and import added value tax were granted, excluding commodities under State tax and duty regulations such as cigarettes, liquor and cosmetics.

----Import-duty policies for boundary small-volume trade are executed for commodities imported through economic cooperation with the neighboring countries by those boundary companies with foreign-related economic and technological operational rights. Within a reasonable range, export quota and operational division do not apply to equipment and materials under project contracts and labor cooperation with neighboring countries and necessities used by the workers themselves, and export permits are also exempted for these products.

---- Hi-tech enterprises in the Nanning and Guilin hi-tech development zones are entitled to an income tax rate of 15 percent. Those whose export output value exceeds 70 percent of the annual total can enjoy a 10 percent tax rate after the audit of bureau of taxation. After application and ratification, newly-established hi-tech enterprises are entitled to two-year exemption of income tax as of its year of production. After application and ratification by the taxation bureau, the newly-established joint ventures within the development zones whose cooperation period is up to 10 years can enjoy two-year income tax exemption as of the year of gaining profit. Foreign-invested hi-tech enterprises within the economic and technological development zones are still eligible to special taxation policies. After the exemption period expires, preferential tax reduction in a certain period can be granted to those enterprises with difficulty in surrendering taxes.

---- Products developed by hi-tech enterprises in the Nanning and Guilin hi-tech development zones are entitled to export duty exemption, excluding State qualified and specially-regulated items.

---- After ratification, Nanning and Guilin hi-tech development zones can set up technological import and export companies and can grant export operational rights to high-tech enterprises with good export business records.

---- Foreign-invested enterprises in the Beihai Yintan State Tourist Resort are eligible to a reduced 24 percent tax rate. Sino-foreign tourist auto companies employing domestic autos can be set up. Sino-foreign travel agencies can be set up handling overseas travel operation. Foreign exchange shops may also be established.

(2)   Local Preferential Policies of Guangxi

A) Tax Reductions

---- Exemption of local income tax

Local income tax exemptions are granted to the following foreign-invested enterprises in Guangxi: export-oriented and state-of-the-art technological enterprises; enterprise with export output value exceeding half of the annual total and audited by the city and county taxation bureaus; enterprises engaging in infrastructure construction including energy, transportation and port construction; enterprises set up in coastal open cities and zones, boundary open cities and towns, high-tech development zones and 48 mountainous districts and counties; enterprises dealing in agriculture, forestation, livestock raising and fishing; profit gained from conveyance of scientific and technological fruits; enterprises with a total investment volume over US$3 million, exceeding tax exemption period, with annual profits below RMB 1 million and ratified by city or county taxation bureaus.

----Real Estate Tax Reduction

Tax is imposed on the remaining value after a 30 percent reduction of original face accounts of self-owned real estate, with an annual rate of 1.2 percent and rent income tax rate of 12 percent. Enterprises that have difficulty in handing in the real estate tax may apply for ratification of the local taxation bureau for partial or all remission.

---- Reduction in Vehicle License Tax

The tax volume for passenger cars is RMB140 or RMB160 annually whereas that for load-carrying vehicle is RMB40 per ton annually. Motorboats taxed by the custom offices are exempted from such tax item.

  B) Tax Remission

  ---- A two-year exemption of income tax as of the year of gaining profit is granted to foreign-invested productive projects set up in coastal open cities, coastal economic open zones, boundary open cities and towns, Nanning City and economic and technological development zones under the ratification of the regioní»s government and having an operational period over 15 years. Between the third and the fifth year, they enjoy half reduction of income tax and full remission from the local financial department. Between the sixth and the 10th year, after a full surrender of income tax, they will be granted a 30 to 50 percent remission from the local financial department. Foreign-invested enterprises engaged in infrastructure construction such as transportation and energy that are in the above-mentioned areas and with an operational period over 15 years are eligible to two-year income tax exemption as of the year of gaining profit. They will also enjoy a full remission of income tax from the local financial department from the third year to the 10th year, and a 30 to 50 percent remission from the 11th to the 15th year.

---- Sino-foreign port projects with a contract period over 15 years are eligible to income tax exemption between the first and fifth year as of the year of gaining profit. For the sixth to the 10th year, they will enjoy half reduction of income tax and full remission from the local financial department, and between the 11th and 15th year, the local tax remission of 30 to 50 percent is available after tax surrender.

----For foreign-invested export-oriented or state-of-the-art technology enterprises in other areas that have difficulty in returning bank loans after taxation, a reasonable remission in a certain period from the local financial department is available after ratification of various levels of the government.

---- State-ratified foreign-invested enterprises in the high-tech development zones are eligible to half reduction of urban maintenance fee and exemption of securities of state key construction. They are also eligible to two-year exemption of income tax as of the year of gaining profit. Starting from the third year, a 15 percent income tax rate is granted to these enterprises and full tax remission from the local financial department between the third and the 10th year is available.

---- Foreign-invested export-oriented or high-tech enterprises and productive projects set up in coastal open cities and economic open zones, boundary cities and towns and hi-tech economic and technological zones can perform accelerated fixed assets depreciation under ratification of the city or county taxation bureaus.

C) Other Preferential Policies

---- Production and operational autonomy of enterprises are fully regarded. No unit can charge extra fee items or overcharge foreign-invested enterprises unless they have obtained ratification from the local government.

---- According to different usage, region and period of utilization, foreign investment in land development are eligible to a 10 to 30 percent discount in land-conveyance prices, so long as the rate is above the local bottom line. Various cities and counties can make their own specific regulations about exemptions and reductions of land utilization fees and attached infrastructure fees.

---- Foreign-invested hi-tech and export-oriented enterprises are eligible to a 10 to 20 percent discount in various fees.

---- Foreign-invested enterprise employing domestic raw materials, and equipment, export-oriented ones and those with an annual export volume over US$5 million (the figure in poverty-stricken area is US$2 million) enjoy preemptive rights concerning import quota and permits allocation. They will also receive aid in export quota bidding held by the state.

---- Those foreign investors with over 10 enterprises set up in China that engage in production or infrastructure construction, and whose actual registered capital exceeding US$30 million, are encouraged to establish investment companies and comprehensive development companies within the region.

---- For those foreign-invested hi-tech or import-substitute enterprises, their products, excluding the ones under strict regulation by the state, domestic market can be enlarged to achieve foreign exchange balance.

---- Enlarge the examination and ratification powers for regions, cities and counties to utilize foreign investment. Governments at the city level are granted the power to examine and ratify joint ventures with total investment volume below US$30 million, so long as these projects are in accordance with state industrial policies, or has international market and construction and operational conditions, or does not need the regioní»s comprehensive balance of foreign exchange or quota and permits for export. Governments at the city level in the coastal open zone, Pingxiang City and Dongxing Town are allowed to examine and ratify projects with total investment volume below US$20 million. Governments in other counties, cities and regions are allowed to examine and ratify projects with investment volume below US$5.99 million. Any solely foreign-funded enterprises complying with the above-mentioned criteria and with total investment volume below US$30 million are consigned to city and region governments for evaluation and ratification, but they must be put on file at the Ministry of Foreign Trade and Economic Cooperation. Government of the autonomous region entrust the power of granting ratification certificates for the above-mentioned enterprises to various city and county governments. Bureau for industry and commerce of the autonomous region consign to such bureaus at the city level the task of initial evaluation and registration procedures needed for operational license.

 

Any person that has contributed to the introduction of foreign investment, including foreigners, overseas Chinese, compatriots in Taiwan, Hong Kong and Macao and various personages, will all be rewarded regardless of profession or rank.