China’s cabinet approves to set up Two Rivers New Zone

9 Aug

China’s State Council, or Cabinet, on June 18 approved Chongqing Municipality to set up the Two Rivers New Zone, the first of its kind at the national level in China. It is a special birthday gift for Chongqing on its 13th anniversary of becoming China’s 4th municipality. The new zone with 1,200 square meters is composed of 3 administrative districts of Jiangbei, Yubei and Beibei, Lianglu Cuntan Bonded Areas, the economic & technological development zones and hi-tech development zones at the national level. Its establishment is a key measure to tackle the global financial crisis and implement the regional development strategy. According to the request by the State Council, the Two Rivers New Zone will be gradually constructed into an advanced base for the manufacture and modern service industries in inland China, a financial and innovative center on the upper reaches of the Yangtze River, a key door for the inland areas’ open-up program and an example of the scientific development by the 5 aspects, boost the inland open economy and the modern industrial system, enhancement of self-innovation, energy saving and environment protection and improvement of the social welfare. The zone is expected to play a greater role in advancing the development of Chongqing and western regions as well as promoting the coordinated development of all regions. the Two Rivers New Zone is entitled to “three types” of preferential policies. The State Council expressively revealed that the preferential policies for the Two Rivers New Zone can be provided by referring to the policies for Pudong New Area and Binhai New Area, in addition to the preferential policies provided under the Western Development Strategy.

Attachment: 10 preferential policies for Two Rivers New Zone

1.   The corporate income tax will be levied at 15% tax rate by 2020, while the corporate income tax rate is 25% in China’s coastal areas and Mid China.

2.   During the “12th Five-year Plan”, all the increased local finance, tax, administrative and institutional fees will be used to set up Two Rivers New Zone Development Special Fund. The fund will support advanced manufacturers and modern clothing companies within the Two Rivers New Zone in the means of equity investment, fixed subsidy, provision of discounts for issuing corporate bond and loan, etc.

3.   The land use index within Two Rivers New Zone will be granted priority, to ensure development.

4.   Chongqing Municipal Government will establish RMB 10b finance special fund for initial infrastructure construction of the Two Rivers New Zone.

5.   The establishment of Chongqing’s industry investment fund was approved. The fund is for guide and support the development of key industries in the Two Rivers New Zone.  

6.   The high-tech companies will be levied at 10% tax rate for corporate income tax if the output value and technical revenue accounts for over 60% of the annual output.

7.   For companies within the Two Rivers New Zone belonging to high-tech industry or strategic emerging industries, the risk compensation fund withdrawn as per corresponding regulations since the profit-making years can be deducted before taxation.

8.   Double preferential policies will be granted to land use by industries greatly supported by government. House rental subsidy will be granted to universities and colleges engaged in sci-tech development, and scientific research institute.

9.   Projects meeting national industrial policies will be supported in respects of land use, loan & financing and market access.

10.  Financial supports such as settlement subsidy will be provided for senior management and financial personnel newly employed by large company headquarters within the Two Rivers New Zone. In addition, distribution incentive system will be established to attract talents.

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