Doing Business in Guizhou -- china.org.cn

I . Survey

(i)Geographical Position

Guizhou Province called Qian or Gui for short, is located in southwest of China, between east longitudes 103°36' to 109°35', and north latitudes 24°37' to 29°13', borders Hunan, Guangxi, Yunnan, Sishuan and Chongqing in the east, south, west and north respectively, covering an area of 176,167km2.One of the outstanding topographic features is that mountains and hills account for 92.5% of the province’s total land area, and the size of karst land for maccounts for 6 1 . 9 % which makes Guizhou one of the world’Guizhou for hundreds of years. About 37.8 per cent of Guizhou’s populationis non-Han Chinese.

(iv)Infrastructures and Transportations

Highways

The total mileage of highway in Guizhou is 46,894km, including 577km of express highways, 92km of A highways, 2,629km of B highways, 8136km of C highways and 24,013km of D highways. In 2005, RMB ￥11.946 billion has been invested in construction of road in the whole province, passenger transportation reached 0.614 billion person-times, goods transportation 0.15 billion tons and circular freight . ow volume 9.415 billion ton-kms.

Railways

Guizhou province is an important railway hinge in southwest of China. Arterial railway lines of Sichuang-Guizhou, Hunan-Guizhou, Guizhou-Guangxi, Guiyang-Kunming, Neijiang-Kunming, Chongqing-Huaihua, and lateral railway of Kaiyang, Dashui, Hulin travel through the territory of Guizhou province. The length of operation railway line totals 3,089km. In 2005, goods transportation was 40.353 million tons, and passenger transportation reached 19.179 million person-times.

Aviation

There are five airports in Guizhou, which are located in Guiyang, Tongren, Xingyi, Anshun, Liping, and are directly linked with cities by fifty six skyways is Guizhou, including two international skyways. In 2005, 3.0775 million passengers traveled by plane and 33.4 thousands tons of cargo were transported by airplane.

Communications and Internet

The modern arterial communications networks, composed of program-controlled telephone network, long-distance digital transmitting network and mobile communications network, have formed. Up to 2005, there are 4.67 million fixed telephone users, 5.09 million mobile telephone users and 1.09 million internet users.

Finance and Insurance

The finance institutions have been in smooth operation. By the end of 2005, there were RMB ￥279.3 billion deposits of diversi. ed categories in . nancial institutions in the whole province. And RMB ￥￥4.05 billion. There are 522 insurance enterprises in Guizhou, with 3,636 persons employed , the insurance has developed fast.

(v) Foreign Association

By 2005, Guizhou province had established 3 pairs of friendship provinces or states and cities, including Styria state of Austria, Nebraska state of USA and Northpamoston city of New Zealand(with Guiyang city), which has promoted the political, economic and culture communications on both sides.

Huangguoshu Waterfall Festival

Launched in 2003 and held in August or September every year, it is the largest tourism event in the history of Guizhou province. The festival is organized by the people’s government of Guizhou Province and the tional Tourism Council, and undertaken by Anshun government and Provincial Tourism Bureau of uizhou

Province. Guizhou seeks to expand its international influence and raise the visibility and reputation. The festival is the conservation of the natural eco-tourism, organic tourism and red tourism. The theme is “ beautiful waterfalls, colorful style of the nation”. Guizhou enters into all the country and the world, and all the country and the world know Guizhou at the same time. After years of efforts, Huangguoshu Waterfall Festival has become the well-known festivial all over the country. Guizhou has achived the strategic goal of speeding up the development of tourism.

(vi)Higher Education and Scienti. c Research

At present, there are 33 higher educational institutions including Guizhou University, Guizhou Normal University, Guiyang Medical University, etc, with 206.754 thousand registered undergraduates, among whom 6.168 thousand registered post-graduates. Higher education has been developing in all-around way.

(vii)Tourism

Guizhou has most abundantand characteristic tourism resources with many beautiful natural scenic spots, wellpreserved ancient cultural relics and brilliant minority culture. Currently, there are 12 state-level scenic areas, including Huangguoshu Grand Waterfall, Dragon Palace, Hongfeng Lake, Zhijin Cave, etc; 6 state-level natural protection zones, including Mt.Fanjing, Maolan Karst Forest, Xianning Sea of Grass,etc; 19 state-level key culture protection relics, including the site of Zunyi Meeting; Anshun Fuwen Temple, etc; 7 state-level forest parks, including Sea of Bamboo, Mt.Phenix, Mt.Yaoren, etc. Furthermore, there are also 57 provincelevel scenic areas and a passel of minority villages with full-bodied national feature. Huangguoshu Grand Waterfalls

Originated from River, a branch of Beipanjiang River within the Pearl River System, Huangguoshu Waterfalls is 77.8 meters high and 101meters wide, with an average annual flow volume of 9.12 cubic meters per second, it is the only one in the world that can be viewed from six positions: above, under, front, behind, left, and right. It is a waterfall within a water curtain cave crossing it and visitors can appreciate the waterfall from the cave by listening, looking and touching.

Mt.Fanjing

The huge Mount Fanjing is the summit of the Mountains. Its well –preserved primitive forest is the largest ecological system in Guizhou. It was included in the first group of national nature reserves in China and is under the protection of the Man and Biosphere Program of UNESCO. It is said that Mount Fanjing was the place where Buddha performed rites to save the souls of the dead and hence a holy place for Buddhists.

Brilliant Nationality Culture

A total of 49 different natonalities have lived peacefully in Guizhou, the culture of nationality is brilliant and unique. The Buyi Chamber Orchestra is the traditional folk art of the ethnic which is popular in Southwest Guizhou. The Chorus of the Dong ethnic minority is the only polyphonic unaccompanied chorus in China. Known as “the chorus from heaven”Guizhou from East China more than 600 years ago and were stationed there to open up wasteland and grow grain. They have lived in the area for several generations and have maintained the old traditions of the Han Chinese in East China. The traditional Di Opera played by the Tunpu people known as “the living fossil of drama”s 3 most famous liquors. It is the originator in yeast sauce liquor in our country. Moutai has a long history. As recorded in history, as early as in 135 BC, Town, the ancient apanage, brewed the medlar sauce wine that Emperor Wudi of the Han Dynasty had high opinion of, and was thus known throughout the world. In 1915, Moutai won the gold prize of Panama Word’s Fair, and became known throughout the world. After the establishment of the Peopes’s Reputic of China our country, Moutai has won international gold prizes for several times. It is sold to over 100 countries and regions. The production technique of Moutai is ancient and unique. It inherits the essence of ancient brewery technique, and shines with modern science and technology the color of modern science and technology.

II . Economy

(i)GDP Data

The overall GDP value in 2005 was RMB ￥194.2 billion: RMB ￥35.92 billion from the primary industry, RMB ￥82.28 billion from the secondary industry, RMB ￥76.0 billion from the tertiary industry. The proportions of its primary, secondary and tertiary industries are respectively 18.5%, 42.4% and 39.1%. GDP per capita is RMB 4,957 yuan.

Industry Structure

(ii) Data of Natural Resources, Industry and Agriculture

Natural Resources

The unique geological conditions endow Guizhou with rich natural resources, energy sources and minerals. The provincial hydropower reserves are 18.754 million KW, ranking 6th in China. Guizhou is rich in mineral resources. Among the 123 kinds of discovered minerals, the reserves of 76 kinds have been proved,with 22 rating in the first three and 40 kinds listing among the top 10 in China. Coal, bauxite, phosphorus, manganese, antimony, mercury, gold, barite, cement, raw material of bricks and tiles and kinds of sandstone, dolomite and limestone for various functions have their irreplaceable position in the country. The high-quality bauxite is abundant, the retained reserve is 424 million tons and lists top two in China. The reserves of the phosphorus account for 40% of the total amount of the courtry. The reserves of the barite are one-third of the total amount of the whole country. The reserves of gold rate in the 12th in China, which is becoming an emerging base for gold production. Guizhou is also known as of Coal for its coal reserves of 49.728 billion tons,ranking 5th in the country and equaling to the total amount of the twelve provinces in south . At present, the biggest electrolytic aluminum plant, phosphate fertilizer production base and the production and export base of abrasive and artifical diamond of the country are situated in Guizhou.

Guizhou is also known for its rich biological resources in China. There are more than 3,800 wild plants and more than 1,000 wild animal species. Guizhou is one of the four largest producers of Chinese medicinal materials. Zhuzishen,Sanjianshan ,Shanjue,Chinese caterpillar fungus,Jizhong and natural borneol, etc.are well-known throughout China.

Industry

Guizhou has evolved a complete industry system. A considerable scale has been formed in the production of main industry products. In 2005, total added value of industry in Guizhou amounts to RMB ￥56.44 billion（see the following table for outputs of major industrial products）’ trained since 1960. The national defense science and technology industry relying on the three bases of aviation, aerospace and electronics possesses not only advanced technical equipment, scientific experiment facilities and measuring and testing means, but also a competent staff, a high-level managencent, perfect technical responsibility and quality guarantee system. It has the capacity of absorbing import techniques and developing new products. Chinese and foreign investors are welcome to have joint ventures or cooperation with the provincial enterprises to establish new IT bases in China’s west region.

Fix Assets Investment

In 2005, RMB ￥101.46 billion has been invested in fix assets in the whole province, among which investment in real estate development is RMB ￥15.412 billion. According to industry types, the three types of industries have invested respectively RMB ￥2.464 billion, RMB ￥￥5 7 . 4 3 7 billion.

Agriculture

In 2005, grain-planting area was 3.074 million hectares, total grain output was 11.521 million tons. Total summer grain crops output was 2.147 million tons; total autumn grain crops output was 9.3736 million tons. Total oil plant output was 848.9 thousand tons; total rapeseed output was 765.1 thousand tons; total tobacco

leaf output was 344. 5 thousand tons（Guizhou Province is USD 1,404 billion, among which, USD 859 million derived from export and USD 545 million from import. Commodities manufactured in Guizhou Province are exported to 124 Countries and regions; Guizhou Province also imports products from 54 countries and regions. The structure of exported products is continually optimized. The percentage of primary product and manufactured product is 32% and 68% respectively.

Utilization of Foreign Investment

The scale of foreign investment utilization is expanding continually. 5 of the top 500 enterprises in the world have invested in Guizhou Province. In 2005, there are 60 foreign-invested projects in the province and the actual utilization of foreign investment is USD 107.68 million. The foreign investment is mainly from 17 countries and regions. In which, Australia shares USD 34.66 million, British Virgin Island shares USD 27.83 million , Mauritius, USD 16.93 million, HK, USD 16.44 million and Samoa , USD 3.12 million. The foreign investment is invested in these industries including manufacture industry, exploitation, real estate, construction industry etc.

Cooperation with Overseas Partners

The economic cooperation with foreign partners has developed step by step. There were several enterprises that contracted a large number of engineering projects and made a demonstrative and leading impacton the improvement of the enterprises’ competitiveness in the province. In 2005, the contracted volume of foreign contracted projects and labor cooperation amounted to USD 137.83 million. The turnover was USD 163.96 million. Labors are mainly sent to Singapore, Dominica, Ghana, Guyana, Tonga, Iran, HK etc.

Investment & Economic and Technological Aids Abroad

In 2005, one enterprise was established in Vietnam and the investment amounted to USD 2 million. Enterprises undertook 7 aid projects. Many countries and regions received aids. Projects’ ncluded improving and extending of Ghana’s highway, Capital Middle School of Tonga, International Meeting Center of Guyana, New Office Building of the Judicial Ministry of Tonga and Kenya’s Bridge etc.

Technology Import

In 2005, Guizhou Province signed 14 technology import contracts, with the contracted value of USD 58.1707 million. The second tracts are mainly signed with enterprises from countries such as EU, Japan, USA, etc, involving a series of industries including phosphorus chemical industry information, biomedical sector etc.

Circulation of Commodities

In 2005, the total volume of retail sales of consumer goods in Guizhou province came to RMB 60.692 billion Yuan. In which, cities’consumption totaled RMB 36.274 billion Yuan. Counties’ consumption totaled RMB 11.58 billion Yuan. Consumption of under county’s level totaled RMB 12.838 billion Yuan. There were 2,929 commodity trade markets in Guizhou Province, among which, 25 commodity trade markets are with a business volume of over RMB 100 million Yuan and 58 markets of over RMB 50 million Yuan.

III . Investment

(i)Policy and AdministrativeRules

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 Deserti. cation

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.

Catalogue of Relevant Policies and Regulations in Guizhou Province

1. Decisions by the People’’’s Government of Guizhou Province on Polishing the Works of Attracting Overseas Investment for Key Projects

4. Noti. cation by the People’’s Decisions on Expanding Authorities of Provinces, Autonomous Regions, Cities Speci. cally Designated in the State Plan and Departments of State Council to Examine and Approve Project of FDI

5. Regulations on Protecting Rights and Benefits of Foreign Investors in Guizhou Province

6. Opinions of People’’s Western Development Program

For more information please visit: Information Website of Attracting Overseas Investment of the People’http://www.investgz.gov.cn

(ii)Catalogue for Advantageous Industries in Guizhou Province

1. The development of subsequent industries of the national major ecological proiects such as returning land for farming to forestry and grassland, natural forest protection,etc.

2. Developing and applying of water-saving irrigation technology

3. Development of coal processing technology and coal production

4. Deep processing of potato and konjac, etc.

5. Characteristic edible resource development

6. Abrasive tool production

7. Titanium smelting

8. Barium salt production(Chinese party proprietary)

9. Deep processing of ramee products

10.Development and production of animals and plants medicinal materials(except those in the catalogue for the national protected resources)

11. Phosphorus chemical production

12. Urban gas supply, heating supply, water supply and drainage system (Chinese party proprietary in large and middle city)

13. Development of tourist spots and the supporting facilities construction, protection and management

14.Highway passenger transport

Regulations and Measures on Environmental

Protection

In accordance with “ Environmental Protection Law of the People’s Republic of China”s planned to stipulate “Environmental Protection Regulations of Guizhou Province”.

Rules of Import and Export

Guizhou Province implements the active opening up policies, and adopting promotion policies excluding commodities with import and export restricted by the State.

Foreign Exchange Management

Enterprises that involved in foreign exchange affairs abide by the Regulations on Foreign Exchange Management of the People`s Republic of China. There are 36 banks in Guizhou Province equipped with foreign exchange management system, which is very covenient for customers.

(iii)Procedures of Establishing Foreign-invsted Enterprise

Ways of Investment

Foreign companies, enterprises and economic organizations and individuals, as well as those in HongKong, Macao and Taiwan are all welcome to invest in Guizhou Province by choosing any ways of the following: -To start Sino-foreign joint ventures, cooperative enterprises, exclusively foreignowned in enterprises, and foreign-invested limited company(Ltd.);

-To transfer the useful advanced technologies;

-To operate enterprises by contracting lease operation enterprise or to explore mineral resources;

-To develop barren mountain and hill, and to develop the aquatic resources;

-To acquire the right to use land to develop real estate and tourism items according to the law & regulations;

-To participate in the reorganization of state-owned enterprises by buying, merging and stocking;

-BOT, TOT form;

-To invest in other forms of business in line with laws and regulations.

Means of Contribution

-Free convertible currency;

-The evaluated machinery, equipment, raw material and other goods and materials;

-The evaluated right of industrial property, technique for special use or right of other properties that are needed in production.

Procedures of Examination and Approval for Foveign-invested Projects

(1)Comiling Project Proposal.

The project application report provided by enterprises of joint venture,cooperate ve,exclusive foveign investment,merger and acguisition as well as increased capital shall be approved by Development and

Reform Committee of Guzhou Province; those enterprises shall be in accord with encouraged and permitted category in the nation’s Catelogue for Foreign Investment Industry with no government investment,no imported raw material and exported commodity with quota and license involved;the total investment of those enterprises is less than USD 100 million.

(2)Apply for Establishing Foreign -invested Enterprises. With examination and approval of project application by the Development and Reform Committee of Guizhou Province, the applicants are required to present all the concerned document including contract and regulation signed by all the parties to the local department of commerce to be examined and approved.

(3)Registration of Related Registration Procedures. The person in charge of the foreign enterprise need to have his businesses registered by presenting the approved documents, certificates and other relative documents to the industry & commerce administration of this province, then go through registration formalities at Guiyang Customs house,foreign exchange management bureau of Guizhou province and taxation administration.

Regulations on Employment

According to Labor Law of the People1’. Of all 9 central cities under supervision, water quality of source place satisfied the national standard. Air quality of cities is becoming better, and 58.3% of cities reaching the second level standard. The control of noise pollution is effective, and regional sound environment is perfect. The quality of radiance environment is stable, maintaining the natural up-and-down scope of the background value. The average temperature of the coldest month (January) is from 3℃ to 6℃Guiyang and the historical famous city— Zunyi are key cities of state level, other central cities are also suitable for residence.

Education and Public Health

Complete education system have been established in the province including basic education, professional education and special education. There are 6,571 medical institutions with 92,121 staffs. 84.46% of them are 77,805 technical staffs.

(v)Reference Prices of Basic Elements