Doing Business in Jilin -- china.org.cn

I. Survey

(i) Geographic Location

Jilin Province (N 40°52′ - 46°18′, E121°38′-131°19′) is located in the middle part of Northeast China, about 750 kilometers from east to west and 600 kilometers from north to south, with a total area of 187,400 square kilometers which is about two percent of the total area of the country and in the 14th place of the country. To the north of Jilin is Heilongjiang Province, the south is Liaoning Province, the west is Inner Mongolian Autonomous Region, the east borders Russia, and the southeast is North Korea, which is separated by a river. By the end of 2005, the administrative area of Jilin Province is as follows: Changchun is the capital of the province, and there are eight Prefecture-level cities, one autonomous prefectures, twenty county-level cities, eighteen counties and three minority autonomous counties in total.

(ii) Climate

Jilin Province is in the mid latitude to the east of Eurasia, whose temperate zone is the continental monsoon climate; the four seasons identified clearly, with the heat and rain coming in the same season. In spring, it is dry and windy; in summer, the temperature is high and there is a lot of rain; in autumn, it is cool; and in winter, it is long and cold. The four seasons change evidently. The average temperature of the province is under -11℃ in winter, and above 23℃ in general in summer. The annual range of the temperature in the province is 35-42℃ and the diurnal range is generally 10-14℃ . The frost-free period of the whole year is 100-160 days. The average sunlight duration is 2,259-3,016 hours. The annual average precipitation is 400-600 mm.

(iii) Population and Nationalities

By the end of 2005, the total population of Jilin Province was 26.6937 million, among which the population of agriculture was 14.6305 million and the population of non-agriculture was 12.0632 million. Jilin Province is an interracial province locating at the border area with 48 minority ethnic groups apart from Han, and the population of the minority ethnic groups is 2.4534 million. There are four national autonomous regions: Yanbian Korean Autonomous Prefecture, Qianguo Mongolian Autonomous County, Changbai Korean Autonomous County, and Yitong Manchu race Autonomous County.

(iv) Infrastructure and Transportation

Airdrome

The civil aviation career of Jilin province is gradually developing. Now it has formed a aviation network that makes Changchun airdrome as its core, radiating circumjacent nations and areas, and has more than 40 international and domestic airlines, including the international airlines such as the flight course to Hong Kong, Seoul of Korea, Tokyo and Sendai of Japan. Longjia International Airdrome can take in and send out 2.5 million person-times every year. Preparation work to construct Changbai Airport is going along well and rebuilding Yanji Airdrome are steadily promoting. In 2005, the Civil Aviation transport completed 1,233.6 thousand persons and 2,129 million kilometers.

Port

Jinlin province is one of the nine landway-border provinces of China. There are 30 ports and passages in total, 6 national first-class ports (Changchun International Voyage Port, Yanji International Voyage Port, Tumen Road Port, Hunchun Railway Port, China-Russia Hunchun Road Port and Quan River Port), 6 national second-class ports, 4 second-class former local border ports, 1 public-business passage, 2 inner railway ports, and 11 temporary goods-passed ports. The ports and passages can transport 9 million tons or 0.08 million standard trunks of goods, and transport 7 million persons.

Road

In 2005, the total road mileage of Jilin Province reached 50,308 kilometers, with a road density of 26.8 kilometers per one hundred square kilometers. Except Yanbian Autonomous Prefecture, the Prefecture-level cities of Jilin Province can connect Changchun with arterial road and it is secondary road from city (prefecture) connect county. The freeway mileage was 542.5 kilometers; grading road mileage was 48,487.2 kilometers, county-countryside mileage reached 37,092 kilometers. The quantity of goods road -transport was 274.41 million tons, and the passenger road- transport was 228.7 million persons.

Railway

Changchun is the center of the railway in Jilin Province, with the main line of Changda, Changha, Changtu, Changbai radiating all directions. At present, there are one special grade station (Changchun Station), 7 first-class stations, 19 second-class stations and 54 third-class stations. There are 23 main branch lines and 4 linking lines in Jilin Province; the length of the main railway line in Jilin Province is 4,062.7 kilometers; the business mileage of the railway is 3,474.6 kilometers. The quantity of passenger carried by railway transport of Jinlin is 46.18 million, and the goods transport is 70.384 million tons.

(v) Finance and Insurance

It is obvious that the role finance plays in supporting and guaranteeing the economy of Jilin is strengthened. In 2005, the deposit balance of RMB and foreign currency was 437.45 billion yuan in financial institution, and the deposit of RMB increased by 57.99 billion yuan. The loan balance of foreign currency was 340.13 billion yuan in the financial institution of Jilin Province. Insurance premium income of the insurance in Jilin Province was 7.572 billion yuan. And the income of property insurance premium was 1.537 billion yuan. The insurance indemnities and payments added up to 1.388 billion yuan.

Main Banks

Main Insurance Institutions

(vi) Telecommunication

Post-telecom communications enterprise is developing at a high speed in Jilin Province. In 2005, the total quantity of post and telecommunication service reached 26.16 billion yuan, of which the total quantity of postal service was 1.33 billion yuan, the total quantity of telecommunication was 24.83 billion yuan, the total number of table telephone subscribers reached to 7.686 million, the rate of the telephone subscribers popularization rate was 29 per one hundred persons; the total number of mobile phone subscribers reached 9.157 million, and the rate of using mobile phone was 34 per one hundred persons; the total number of internet subscribers reached 2.237 million.

(vii) Foreign Exchanges and Foreign-related Exposition

Jinlin province has set up 45 pairs of close friendly cities with other 20 countries, 45 cities. In 2005,34 international exhibition activities were hold in Jinlin, which earned more than 0.72 billion Yuan direct income, brought along correlated industry with an income of 6.5 billion Yuan and made a revenue of over 0.6 billion yuan. There were Northeast Asia Exposition, Cars Exposition, Photics Convention, Serac Tourist Day and so on. From September 2-6th of 2005, the first Northeast Asia Exposition was held in Changchun. The Exposition gave three parts of speciale activities that were commodity trading, investment discussing and professional international conference and business day. 1,900 international-standard exhibit positions were set up. It will be hold yearly in the future.

List of Province / State of Friendship of Jilin Province

(viii) Higher Education and Scientific Research

The education industry of Jilin Province is comparatively developed. There are 65 colleges and universities such as Jilin University, Northeast Normal University. And there were 92,938 graduates from general higher schools of Jilin in 2005, including 7,471 postgraduates and 53,600 undergraduates.

Jilin Province has the superiority in science and technology, having the strength of science research and exploitation in the technique field of photics, application chemistry, solid physics, electricity information technology, biology technology, advanced manufacture technology, modern agriculture, modern Chinese traditional medicine, and ecology and environmental protection. There are 698 thousand all kinds of professional technicians in Jilin Province, the number of scientists engineers and under-education college students in 10 thousand persons ranking the 6th in China. There are 36 academicians. And Jilin has 14 national key scientific institutions such as Changchun Optical Fine Mechanics and Physics Institute, Application Chemistry Institution and Biological Products Institution, 8 national key laboratories, and 10 national technology centers of enterprise. The science and technology institutions of Jilin Province have achieved the first synthetic rubber, the first microscope, the first optical glass, the first ruby laser, the first red-flag car, the first railway train and subway electric train, the first high resolution nuclear magnetic spectrometer of China and the first breeding soybean of cytoplasm-nuclear male sterile line from interspecific cross of the world.

(ix)Tourism

In 2005, Jilin Province took in 28.88 million tourists in and out of the country, earning 22.92 billion Yuan.

Natural and Human Landscape

The Changbai Mountain in the east is a mystery to the world with sky pond in the mountains and rarenesses in the woods. The sky pond of the Changbai Mountain is the biggest crater lake of China, and the waterfall of the Changbai Mountain is the headwaters of Songhua River, Tumen River and Yalu River. The Grand Canyon of the Changbai Mountain is very great and barren. The Jilin rime is praised as one of the four natural wonders. Songhua Lake is the country’s key scenery spot. The Sanjiaolong Bay of Huinan is the typical vent of the ancient volcano. Jingyue Pond of Changchun is the national forest park, which is the biggest of the man-made forest in Asia. Xianghai natural reserve of Tongyu is awarded“A” natural reserve recorded into the world famous wetland directory. Ji’an Gaogouli is famous to the world for being a world cultural heritage, its General Grave is so grand that it is called “east pyramid”, and the Haotaiwang Stele is the treasure of national stele art. The ancient city of Huanglong mansion lying in Nong’an county was the important town of military affairs of Liao and Jin dynasty and the center of the politics and economy, and the“Liao Tower” in the county is known to the world.

Tour Products

Ginseng, marten and velvet. Jinlin is the biggest producing area of ginseng with 85 percent of ginseng output of China, 70 percent of the world. Sable is the national first-class protected animal, whose fur is the best of all. Jilin Province is the home of spotted dear with the annual average production of velvet over 1/3 of the nation.

Special Food

Jilin Food, one of the Chinese“new eight series of food ”is a new food series that is rooted in the black ground of Jilin. There are four main kinds of food, namely fold food, fold-custom food, palace food and mountain – delicacies food.

II. Economy

(i) Data of GDP

The gross national product of Jilin was 362.027 billion Yuan, increasing by 12 percent, the gross national product per person was 13,348 Yuan, the primary industry was 62.561 billion Yuan, 17.3 percent of the gross, the secondary industry was 158.083 billion Yuan, 43.7 percent of the gross, and the tertiary industry was 141.383 billion Yuan, 39.0 percent of the gross.

(ii) Natural Resource

Land Resource

The total area of Jilin Province is 19.1124 million hectares. While the area of the agricultural land is 5.5368 million hectares, the area of the woodland is 9.2440 million hectares, the area of garden plot is 0.1156 million hectares, the area of grass land is 1.0456 million hectares, the area of other farm land is 0.4551 million hectares and unused land is 1.4012 million hectares.

Mineral Resource

At present there are 165 kinds of minerals discovered throughout the Jilin province, and the ascertained mineral reserves are 118 kinds, including 6 kinds of energy mineral products, 19 kinds of metal mineral products, 50 kinds of nonmetal mineral products, 11 kinds of rare, rare-earth and dispensed element mineral products, and 3 kinds of hydrosphere mineral products. The mineral kinds that were discovered and the mineral kinds with reserves ascertained respectively account for 80.1% and 56.3% of the mineral kinds in China. There are 33 kinds of minerals whose reserves rank the top five among the whole country, while there are 12 kinds of minerals whose reserves rank the top of the whole country, and they are oil shale, dolomite for refining magnesium, iceland spar, wollastonite, diatomite, floatstone, cinder, basalt for veneer, andesite for acid and alkali-resistance purpose, marble for construction, mineral water and haydite shale. Among them, oil shale, mineral water, cinder and haydite shale are the superior minerals.

Water Conservancy Resource

There are more than 2000 rivers big and small throughout the Jilin province, they respectively belong to the five water systems of Songhua River, Liaohe River, Yalv River, TuMen River and Suifen River. The total volume of water resource is 40.4 billion cubic meters both ground and underground.

Energy Resource

There are many varieties of energy resource in Jilin province, and there are some amounts of reserves for coal, oil, natural gas, water and electricity, oil shale, etc. The geological reserves of ascertained coal are 2.832 billion tons, the recoverable reserves of oil are 87.59 million tons, and the geological reserves of natural gas are 0.33 billion cubic meters in Jilin province. The water and electricity resources of Jilin province are mainly centered in Songhua River valley, Yalv River and Tumen River in the east. There are 57 hydroelectric stations with the installed capacity of over 10,000 KW, and the available capacity is 4.35 million KW.

Forest Resource

The woodland area of Jilin province is 8.176 million hectares in 2005, among them, the timber product forest is 6.354 million hectares, the shelter forest is 1.321 million hectares, the special-purpose forest is 357,000 hectares, the firewood forest is 15,000 hectares, the non-timber product forest is 129,000 hectares. The recoverable reserves of living forest have reached 884.13 million cubic meters, and the forest coverage has reached 43.2%. There are more than 10 kinds of the main conifers and nearly 20 kinds of the main broadleaves. 38 forest parks have been developed and constructed, among them, there are 23 national forest parks, one forest tourist region of state-level. With an area of 2.057 million hectares, the forest park region has 24 forest parks that can be developed for the purpose of the forest ecological travel.

Wetland Resource

In Jilin province there are many types of wetlands that are widely distributed in a large number of areas, and there are abundant living species. In 2005, the total area of wetlands in Jilin province is 1.937 million hectares, and there are five kinds of wetlands that include the offshore wetland, river, lake, swamp and mired meadow, as well as artificial wetland, 15 types in total. There is one key international wetland, the Xianghai wetland, and there are five national key wetlands.

Wild Propagation Resource

In Jilin province, at present there are 441 kinds of wild animals on land, that include 13 kinds of amphibians, 17 kinds of crawlers, 331 kinds of birds and 80 kinds of beasts. Among the above kinds, 75 kinds have been listed in the national key protection directory, and there are more than 20 kinds of wild animals on land that have higher economical value. In the Jilin province the ascertained wild plants have more than 3,890 species, among them, there are over 270 species of lichen, more than 350 species of muskeg, more than 900 species of eumycete, more than 140 species of pteridophyte, more than 30 species of gymnosperm, and more than 2,200 speices of angiosperm.

(iii) Industry and Agriculture Agriculture and Rural Economy

Jilin province is the key agricultural province of China. It has the advantage for the production and deep-processing of corn, soybean, rice, beef cattle, live pig and chicken. There are 38 base counties of green foodstuff and more than 50 production bases. Located at one of the three world-famous“black land belts”, the central Songliao plain is“the global golden corn belt”, and is the important processing and production region of national cereals and meats. In 2005, the total output of cereals in Jilin province reached 25.8 billion kg, which achieved the highest level of history. The stockbreeding, gardening specialties and green food industry rapidly progressed, the total output value of stockbreeding increased by 12.8%, accounting for 45% of the total agricultural output value. The agricultural products processing industry broke RMB 100 billion yuan in the output value. therefore it is becoming the new mainstay industry.

Industry

In 2005, the industrial production of Jilin province kept at a rapid increasing trend, the selling rate of industrial products reached 98.53%, and the operating quality of economy was further improved. In 2005, the value added of 136.19 billion Yuan was realized, the industrial value added above the scale reached 120.08 billion Yuan, the realized profit was 13.83 billion Yuan after the profit and loss were balanced out for the industrial enterprises above the scale, and the comprehensive target of industrial economy was still kept at 160%.

Output of Major Industrial Products in 2005

(iv) Business Date

The total export and import volume is USD 6.528 billion, among that, the export volume was USD 2.647 billion, the import volume was USD 4.061 billion. In exports, the export volume of primary products was USD 0.868 billion, the export volume of finished industrial products was USD 1.6 billion; while in imports, the import volume of primary products was USD 0.66 billion, the import volume of finished industrial products was USD 3.45 billion. The export commodities were sold to 160 countries (regions). The main export markets were South Korea, Japan, US, DPRK, Russia, Iran, Algeria, Malaysia and Germany. The part of export volume was USD 1.784 billion, accounting for 72.35% of the total export volume. The import commodities came from 82 countries (regions). The main import markets were Germany, Japan, US, DPRK, Brazil, South Korea, Australia, Hungry, Argentina and Italy. The part of import volume was USD 3.607 billion, accounting for 88.80% of the whole import volume. In total, there were nearly 220 border-trade enterprises in Jilin Province in 2005. The accumulated import and export volume of small amounts was USD 0.29 billion for the border trade, among that, the export volume was USD 0.17 billion, the import volume was USD 0.12 billion throughout the year of 2005. The total volume of technological import and export was USD 0.268 billion, there were 206 contracted projects of import technology and equipment, with the contract sum of USD 0.261 billion.

Utilization of Foreign Investment

The foreign investment actually used in Jilin Province is USD 0.66115 billion in 2005, and there are 348 projects directly invested by foreign businessmen. There are 24 countries and regions that have come to Jilin Province for investment, among them, 8 countries and regions with the investment reached over

ten million US dollars. The foreign investments are mainly centered on the equipment manufacture for traffic and transportation, the food processing, the computer application and software industry, the producing and supply of gas, the real estate, the pharmaceutical production, etc.

Foreign Economic Cooperation

In 2005, there are 108 foreign contracted projects and cooperative projects of service contract in Jilin Province, the contract sum has reached USD 0.22 billion, and the business volume finished is USD 0.284 billion. 17066 persons of labor service are sent overseas throughout the year, and 38041 persons are still overseas at the end of the year, they are mainly sent to these countries and regions of South Korea, Japan, Singapore, Russia, US, DPRK, Algeria. The main contracted projects and the countries (regions) are: the oil refinery of 600,000 tons in Algeria built by China Oil Chemical Company, the Sudan Bridge Engineering built by China Railway No.13 Engineering Bureau, the Water and Electricity Engineering Project in Ethiopia built by Jilin Power Transformation and Transmission Corporation, and the Electrical transmission project in Nigeria built by Jilin Power Transformation and Transmission Corporation.

Investment Abroad

In 2005, there are 23 overseas enterprises (non-trade enterprises) established by Jilin Province, the total investment sum is USD 40.23 million, the Chinese investment is USD 33.40 million. The invested countries and regions are mainly Russia, DPRK, the United Arab Emirate, Italy, US and India.

Home Trade

The retail sum of social consumables in Jilin Province in 2005 is RMB146.08 billion Yuan, among that, the retail sum of urban consumables is RMB 112.98 billion Yuan. The retail sum of wholesale and retail trade is RMB 126.63 billion Yuan, the retail sum of food and beverage service is RMB 18.9 billion Yuan, and the retail sum of other business lines was RMB 0.48 billion Yuan. The retail price index of commodities is 101.1, among them, the urban price index is 101.0, the rural price index is 101.5; the price index of residential consumption is 101.5, among them, the urban price index of city was 101.4, the rural price index is 101.9.

III. Investment

(i)Policy and Administrative Rules

Catalogue of Related Laws

Foreign Trade Law of the People’s Republic of China

Customs Law of the People’s Republic of China

Law of the People’s Republic of China on Import and Export Commodity Inspection

Law of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures

Law of the People’s Republic of China on Chinese-Foreign Contractual Joint Ventures

Law of the People’s Republic of China on Foreign-Capital Enterprises

Company Law of the People’s Republic of China

Law of the People’s Republic of China on the Entry and Exit Animal and Plant Quarantine

Law of the People’s Republic of China on Control of the Entry and Exit of Aliens

Law of the People’s Republic of China on the Control of the Exit and Entry of Citizens

Securities Law of the People’s Republic of China

Income Tax Law of the People’s Republic of China for Enterprises with Foreign Investment and Foreign Enterprises

Individual Income Tax Law of the People’s Republic of China

Law of the People’s Republic of China on the Administration of Tax Collection

Environmental Protection Law of the People’s Republic of China

Law of the People’s Republic of China on Evaluation of Environmental Effects

Law of the People’s Republic of China on Promotion of Cleaner Production

Law of the People’s Republic of China on Prevention and Control of Desertification

Marine Environment Protection Law of the People’s Republic of China

Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution

Law of the People’s Republic of China on Prevention and Control of Environmental Pollution by Solid Waste

Law of the People’s Republic of China on Prevention and Control of Water Pollution

Law of the People’s Republic of China on Prevention and Control of Environmental Noise Pollution

Law of the People’s Republic of China on Prevention and Control of Radioactive Pollution

Frontier Health and Quarantine Law of the People’s Republic of China

Labour Law of the People’s Republic of China

Trade Union Law of the People’s Republic of China

Searching Website for the Related Laws

1. Searching System of Laws and Regulations of China (website of National People’s Congress of China)

http://law.npc.gov.cn:87/home/begin1.cbs

2. China Legislative Information Network System

http://www.chinalaw.gov.cn/jsp/jalor/index.jsp

3. Ministry of Commerce

http://www.mofcom.gov.cn

The above-mentioned websites are for reference only.

(ii) Advantageous industry catalogue for foreign investment in Jilin Province

1. Storage, fresh-keeping and processing of cereals, vegetables, fruits, bird and livestock products and aquatic products

2. Construction and management of breeding bases of superior crops, bird and livestock products

3. Forestation and introduction of improved forest variety

4. Comprehensive utilization of agricultural crop byproducts (corn stalks, etc.)

5. Technological renovation and comprehensive utilization of the chemical fiber wood pulp manufacturers

6. Construction and management of roads, independent bridge and tunnel

7. Construction and operation of the wind power plant

8. Production of ethylene downstream products and fine chemicals

9. Manufacture of automobile spare parts

10. Production of automobile electronic elements

11. Motor development and manufacture of neodymium, iron and boron materials, and rare-earth materials

12. Development and manufacture of LCD

13. Development of computer software

14. Planting and processing of medicinal plants and development of the new pharmaceutical technology

15. Biotechnological pharmacy

(iii)Procedure for establishing foreign-invested enterprises

(iv) Living environment

There is a good living environment in Jilin Province. With the beautiful and convenient living surroundings, and all kinds of accessory life service completed, the cities are suitable for the inhabitation of human beings. There are four cities of regional-level where the atmosphere environmental quality has come up to the second national quality standards.

In Jilin Province, there are 7,781 elementary schools, 1,663 general high schools, 65 general colleges and universities, and the enrollment rate is over 15% for the higher education. Furthermore, there is a great progress in the adult education, pre-school education, special education and professional education.

In Jilin Province, there are 8,755 health service institutions that actually have 87,680 ward beds, 125,700 medical personnel. Among the medical care institutions, there are 563 hospitals, 14 nursing homes, 817 rural hospitals, 71 health centers for women and children, 74 disease prevention and control centers, 1,887 urban community health service centers and 6 first-aid centers.

(v) Reference Prices of Basic Elements

Tariff of enterprises with foreign investment examined and approved by Jilin Province