Brief introduction to Shaanxi provincial conditions

　　Located in the hinterland area of the country, Shaanxi province borders Inner Mongolia to the north, Sichuan and Hubei to the south, Gansu and Ningxia to the west, and Shanxi and Henan to the east. It is a door to enter the vast northwest China area, occupying a key position to unite the north and south of China.

　　Shaanxi is an important cradle land of the Chinese Nation and the Chinese culture.

　　As a famous Chinese saying goes, the central part of the land of Qin (Shaanxi) has always been a cradle of empires. In the Chinese history, 13 feudal empires successively established their capital cities on this piece of land, lasting a total of 1180 years. As early as 2,100 B.C., the ancient Silk Road of the Han Dynasty was opened, initiated from the ancient Chang'an City (present Xi'an City), making Shaaxi the earliest birthplace in the country opening to the outside world. And the capital city of Chang'an became a world famous trade center.

　　Characteristic resources

　　Mineral resources

　　Shaanxi is one of the provinces with richest mineral resources in the country. Of China's 136 varieties of mineral resources, the province has 91 varieties with proven reserves. Of this, seven varieties are of the largest reserves, including rhenium and cement limestone; 11 varieties are of the second largest reserves, including natural gas, molybdenum and hydrargyrum; 10 varieties are of the third largest reserves, including coal, magnesium salts and asbestos; and 56 varieties are listed among the top ten in reserves.

　　Biological resources

　　Shaanxi has comparatively complete varieties of plant resources in the country, containing over 1,000 varieties of herbaceous plants, and known in particular for the national treasure of single leave grasses. Shaanxi also has rich animal resources, totaling over 700 varieties of wild animals, including 64 previous animal varieties. Of this, 12 varieties, including giant pandas, golden monkeys and antelopes, are the first-grade animals under state protection.

　　Hydraulic resources

　　Shaanxi has considerably large resources of surface water and ground water. The ground water resources spread widely in the province, featuring fine supply conditions and water abundance. About 80 percent of the cities and counties in the province have rich water resources.

　　Tourist resources

　　Shaanxi is known as a natural historical museum in China. It has the most representative and most well preserved cultural relics belonging to all historical phases in the country.

　　Economic conditions

　　Shaanxi is one of the major agricultural bases of China and one of the most developed agricultural provinces in the central and western part of China. It has so far basically built up ten agricultural commercial production bases in the fields of commodity grains and edible oils and cottons, cured tobacco, fruits, milk goats, Qinchuan cattle, silkworm cocoons, tea, sheep and cashmere.

　　Shaanxi also has rich industrial bases, featuring considerably large scales and high standards. It has built up advantageous traditional processing industries, particularly in the fields of war industry, mechanical industry, electronic industry and textile industry. Of this, textile industry is in tradition the economic pillar and giant exporter of the province. To date, the province has been builtsintosone of the most important textile industrial bases in the country, with complete sets of industrial, scientific research and educational systems, based on the cotton textile industry, and supported by woolen, ramie, chemical fiber, knitting, printing and dyeing, and textile machinery industries.

　　Shaanxi is an important basis of scientific research and education in the country. It is also an important scientific research and production base in the fields of aviation, spaceflight, machinery, electronics, apparatus and instruments, and agriculture. It has extraordinary strength in the new and hi-tech areas of space technology, biological technology, electronics information, mechanical-electrical integration, new materials, and high efficiency and energy saving. Shaanxi walks in the forefront in comprehensive scientific and technological development capacities.

　　The province has rapidly developing telecommunication industry. It has realized program-controlled telephone services all over the province, with 99 cities, prefectures and counties connectedsintosthe national long-distance automatic network, 10 prefectures and cities realizing program-controlled telephone services, 86 counties and cities opening up wireless paging services that could directly connect with users worldwide and in 2,600 cities in the country.

　　Besides, Shaanxi has a highway network with a traffic mileage of over 40,000 meters, radiating from Xi'an to all directions. It has 11 trunk and branch railway lines, with a total traffic mileage of 2,173 kilometers. Xi'an Airport is a first-grade airport in the country, with 58 airlines directly connected with over 60 large and medium-sized cities in the country and Nagoya and Hiroshima in Japan and Hong Kong and Macao.

　　Orientation and priorities of development

　　1. Speeding up infrastructural construction with special attention to highway construction.

　　2. Intensifying ecological construction and implementing the project of building up scenic lands systematically.

　　3. Giving crucial attention to structural readjustment in the course of development, and striving to develop economies with local characteristics.

　　At present, Shaanxi has demonstrated remarkable advantages in scientific and technological research, tourism, fruit industry and war industry, which have great potentials to be developedsintosfour pillar industries with local characteristics in the economic construction of Shaanxi Province.

　　The province will accelerate its urbanization paces and help Xi’an to develop faster and bettersintosa model of Shaanxi in the aspects of opening up, scientific and technological research and economic construction. It will continue to stress the construction of 83 counties and 100 experimental small towns to reach the goal of urbanizing 30 percent of all the administrative regions in the province, approaching the average level of the country.

　　Preferential policies of investment

　　1. Foreign investment in export-oriented enterprises, advanced technology-based enterprises, agricultural, forestry and animal husbandry sectors, energy and communications construction projects, public welfare establishments, and various enterprises in less developed areas in Shaanxi Province will be exempted from paying local income tax, urban real estate tax, and vehicle and vessel license and plate tax. When the exemption period expires, they may continue to enjoy the privilege of tax reduction and exemption in consideration of the actual circumstances.

　　2. Production-oriented enterprises under foreign investment that have an operation period of more than ten years in the province may have the corporate income tax exempted in the first two years since starting to make profits, and have half of the corporate income tax exempted in the third to fifth year period. And foreign invested enterprises with advanced technologies may have half of the corporate income taxes exempted for another three years, provided they are confirmed still belonging to the advanced technology enterprise category when the regulated tax reduction and exemption period expires.

　　3. State-encouraged foreign invested enterprises may have their corporate income taxes reduced in the first three years after the validity period of the existing tax preferential policies expire, and they just pay 15 percent of the total corporate income taxes. Export-oriented enterprises under foreign investment may still have half of the corporate income taxes exempted when the regulated tax reduction and exemption period expires, provided that the output value for export accounts for 70 percent of their gross output value. However, if the final corporate income tax is lower than 10 percent after reduction by half, enterprises have to pay 10 percent of the corporate income tax.

　　4. Foreign invested technology-intensive and intellect-intensive projects, projects with over US million foreign investment and long investment recovery period, and projects in the infrastructure industries of energy, communications and environmental protection may have the corporate income taxes reduced, paying only 15 percent of the total corporate income taxes.

　　5. Foreign invested enterprises in the agricultural, forestry and animal husbandry industries and foreign invested enterprises in the economically less developed remote areas may apply for and, with approval of state taxation administrations, enjoy 15-30 percent reduction of corporate income taxes in the ten years after the regulated corporate income tax reduction and exemption period expires.

　　6. Provided that foreign investors of foreign invested enterprises reinvest their profitssintosthese enterprises, add registered capital, or invest these profits in other enterprises in the province, with operation period no less than five years, they may apply and, under approval of taxation administrations, have 40 percent of the paid corporate income tax payment for the reinvestment project returned.

　　7. Ordinary foreign invested manufacturing enterprises in the urban districts of Xi'an may have their local income taxes exempted during 60 percent of their operation period.

　　8. The province implements the policy of entrusting the investors to manage their projects and benefit from the projects. The province agrees to admit items as single projects provided they meet the standards as follows: 20 km or above enclosed or partially enclosed high-graded highways, 300 meters or longer highway bridges, 200 meters or longer highway tunnels, either in the forms of exclusive investment, joint investment or cooperation. When they are completed, investors will independently manage these projects, collect charges on their own, or entrust local communications departments for management during the contract period. When the principal and interest are paid off, the province will appropriately prolong the payoff terms of the investors.

　　9. The province encourages foreign investment in agricultural projects that are mainly designed for exports and earning foreign exchanges. Foreign invested enterprises in the planting, aquatic breeding, agricultural and sideline products deep-processing sectors, and enterprises integrating the performances of agricultural and sideline products production, processing, transportation, sales (excluding grains, cotton and edible oils) and exports will enjoy preferential policies for export-oriented enterprises under the approval of taxation administrations and foreign trade administrations, provided that they actually export or provide commodities for export worth 50 percent of their gross output values.

　　10. Ordinary foreign invested productive enterprises will have their land royalty exempted during 50 percent of the contract period. They will have half of the land royalty exempted when the contract period expires. And foreign invested enterprises will not pay site use fees, provided that they obtain land use right through the assignment method.

　　11. Foreign invested enterprises that obtain expendable land use right will not be charged with expenses on adequate and systematic services in the city. And new and hi-tech enterprises, after confirmation, may directly obtain land use rights through the transfer method. The fees for assignment of land use rights may have 50 percent preferential treatment.

　　12. Foreign invested enterprises may have ultimate land use rights and enterprise management rights as follows: 40 years of land use rights for commercial, tourism and entertainment industries, 50 years for industrial production, education, scientific research, culture, sanitation, sports, and agricultural development programs, and 70 years for residential projects.

　　13. Foreign invested enterprises may take precedence in obtaining loans for short-term circulating funds in the course of production and circulation, under examination and approval of the deposit bank or other financial institutions.