Chengdu City, Several Policies on the Chengdu High and New Technology Industry Development Zone Tentative Provisions

Published: 27 May 2001
Applicability: The Regulations apply to enterprises engaged in advanced technology, research and development, production and operations in the Chengdu High and New Technology Development Zone (Article 2).

Main contents: Article 4 states that enterprises may engage in foreign trade: initially, in cooperation with a foreign trade enterprise; then, if export sales develop satisfactorily, the enterprise may be conferred the right to engage independently in foreign trade and to establish overseas branches. Article 5 concerns financial credit. Item 1 stipulates that enterprises operating within the zone have priority when applying for foreign-currency dominated loans at municipal banks. Item 2 provides that Chengdu People's Bank should assess and assist bond issues by enterprises operating within the zone. Item 4 allows for the establishment of a zone venture fund and a zone venture capital company. Article 6 deals mainly with various tax reductions. Item 1 provides for a 15% income-tax reduction for high and new technology enterprises in the zone. Item 2 states that when foreign exchange earnings, or earnings from approved import-substitutes, exceeds 70% of an enterprise's total production value, the enterprise will enjoy a 10% income-tax reduction. Item 4 states that product tax and value-added tax on new products may be reduced or cancelled, and that the resulting benefits may be allocated toward technological development without being considered as taxable income. Article 7 concerns finances and pricing, with Item 2 stating that the depreciable life of instruments and equipment can be reduced by four to seven years, while depreciation of production equipment can be as high as 30% in the first year. Article 9 concerns customs duties. Item 1 states that enterprises can import raw and semi-processed materials and parts and components without an import licence. Item 2 states that enterprises may establish a bonded warehouse and a bonded factory in the zone. Item 3 states that export items produced by the high and new technology enterprises will be exempt from export duties unless otherwise mandated by law.
Related legislation: State Council, Approval of State High and New Technology Industry Development Zones and Relevant Policy Provisions Circular