BEIJING -- Heilongjiang province in northwest China is now a major commodity grain production base, green food production base, key equipment manufacturing base and energy and raw materials base.
Under the Belt and Road initiative, Heilongjiang province is tapping potential for revitalizing the old industrial base, targeting to build Heilongjiang land and maritime silk road economic belt.
Profile of foreign investment in Heilongjiang
Heilongjiang province has been playing an important role in promoting China's commercial trade with Russia.
Especially during 2011-2015, Heilongjiang province made great effort in building Heilongjiang land and maritime silk road economic belt for China-Mongolia-Russia economic corridor under the Belt and Road initiative, extended the cooperation between China and Russia from neighboring areas to Central Russia and Europe and from commercial trade to all round communication, promoted infrastructure interconnection and interworking.
During the period, the actual foreign investment in Heilongjiang amounted to 22.3 billion US dollars, doubling that in 2006-2010.
By the end of 2015, there were 9,102 foreign investor approved to set foot in Heilongjiang, including 80 investors from 23 countries and regions newly added in 2015.
In 2015, the actual foreign investment in Heilongjiang province grew 7.09 percent from a year ago Investment from the top five countries and regions, namely Hong Kong, UK, U.S., Cayman Island, and British Virgin Island, amounted to 3.751billion US dollars, presenting for 68.84 percent of provincial total.
Favorable investment environment in Heilongjiang
Heilongjiang province is endowed with favorable environment for foreign investment thanks to its unique location, natural resources.
First, Heilongjiang is the biggest grain producing province in China, having great potential in developing efficient high-quality agriculture industry, husbandry, food processing industry, and agricultural service industry. In 2013, the State Council approved Heilongjiang to pilot modern agricultural comprehensive reform in Songnen and Sanjiang Plains, providing good investment opportunities.
Second, Heilongjiang is one of the demonstrative ecological provinces in China, creating sound environment for developing tourism industry, pension and health industry, cultural industry, information service industry and under-forest economy. Its forests cover 21.25 million hectares of land with four large water systems running through the province, including Heilongjiang river, Wusulijiang river, Songhua river, and Suifen River.
Third, Heilongjiang has rich ore resources, providing opportunities for developing ore exploration and refined processing. A total of 135 kinds of minerals have been discovered in the province and reserves of 84 of them have been surveyed. Its deposits of 11 minerals lead the country, including petroleum, graphite, yellow clay, rhenium ore, volcano ash, cement marble stone, basalt, basalt rock wool, sillimanite, osmiridium, and iridum.
Fourth, Heilongjiang is an opened-up province in inland China. Neighboring to Russia, it plays an important role in promoting economic tie with Russia and participating in Russia Far East development. So far, it has established economic relations with more than 200 countries and regions, set up 25 entry ports of first national grade, including 15 entry port opened to Russia. Its commercial trade with Russia presents nearly a quarter of national total, and its investment in Russia accounts for a third of national total.
Fifth, Heilongjiang is a big province rich in talents of science and education. There are 80 colleges in Heilongjiang, including Harbin Institute of Technology and Harbin Engineering University with 718,000 registered students. Its comprehensive scientific research strength ranks the 12th among all provinces, regions and cities in China.
Sixth, Heilongjiang has sound infrastructure environment for investment. It supplies adequate land and water for industrial and commercial use. Its power generating installed capacity hits 21.67 million kilowatts. It has convenient transportation system. By the end of 2015, the length of its expressway totaled 4,346 kilometers, and its railway operating mileage hit 5,372 kilometers. There are 11 airports in Heilongjiang with 175 domestic and international routes. Harbin International Airport is a window of China opened to the Russian Far East area.
Preferential foreign investment policies
Situated at the center of northeast Asia and being an open-up bridgehead to Russia, Heilongjiang made a large series of preferential policies concerning tax reduction, bonded area, land using, foreign exchanges, and allowance exemption to attract foreign investors.
Tax policy:
Heilongjiang adopted relatively competitive taxation policies for foreign investment attracting, including reducing enterprise income tax, individual tax, urban property tax and tax for use of vehicle and ship, and turnover tax.
Bonded area:
Currently, there is one bonded zone in Heilongjiang - the Suifenhe Comprehensive Bonded Area and another one, Harbin Comprehensive Bonded Area, is under review by relevant authorities.
In short, the Suifenhe Comprehensive Bonded Area implements many preferential policies for foreign companies just like other bonded zones, including exempting duties for their machines, equipment and infrastructure materials for building production plants, warehouses, and a certain amount of office supplies and etc.
Use of land:
1. Modes of land supply
The system of obtaining land-use right for a certain period of time with payment is practiced. Generally, the land will be provided in the form of assignment (including the forms of auction sale, bidding and agreement). The land to be used for infrastructure constructions, public welfare facilities, energy, transportation and water conservancy projects shall be provided in the form of allocation.
2. Tenure of land use
1) Foreign businessmen who have acquired the right to the use of the land in the designated area of the province shall have the land-used tenure as long as: 70 years for residential houses; 50 years for industrial use; 50 years for the establishments of education, technology, culture, public health and sports; 40 years for commercial tourism and entertainment; and 50 years for a comprehensive use or other uses. Within the tenure of land-use, the investor can transfer, lease and mortgage the land-use right;
2) Under the condition of not changing the land-use right of the "five types of wasteland," the user can transfer the land-use right to another user with payment. The tenure of the use can be classified accordingly, generally between 30 years and 70 years. The development of the "five types of wasteland" may be in the forms of joint venture, cooperation, share-holding, wholly-funded, and through association. Within the contracted term, the user of the "five types of wasteland" shall have the relevant rights to the land, such as using, making profit, transferring the use-right, leasing, mortgaging and inheriting.
3. Tax on agriculture:
1) The reclaimed land used for agriculture shall be exempt from agricultural tax within a period of five years starting from the first year of sowing;
2) Any user of the "five types of wasteland," except for the internal support for information, technology, fund, materials and marketing, shall also be exempt from tax for a period of three years starting from the date of the land's auction.
4. Time for land-use examination
In case the land-use right is with the province, the formality shall be completed within a month after all the relative documents and materials are submitted. And license of land-use shall be issued within 10 days after the date of approval. In case it should be examined and approved by the State Council, the provincial government shall submit relative documents and materials to the State Council within a month after receiving them from the user, and a license of land-use shall be issued within 10 days after the date of approval.
Suggestion for investment
Regardless of the environmental issues, Heilongjiang lags behind other Chinese provinces given its plain regional development planning, state-owned enterprises-dominated economy, lack of innovation, tardy commercialization of scientific achievements, and underdeveloped logistics and financial infrastructure.
To inject new vitality into its subsiding heavy industry, Heilongjiang began in 2011 to promote 10 key industries - new materials, bio-pharmacy, new energy equipment manufacturing, new agricultural machinery manufacturing, transportation equipment manufacturing, green food, coal and petroleum chemical, ore economy, forest produce processing and modern services.
Meanwhile, the province will further develop mixed-ownership economy and under the drive, investors may find some opportunities to run business in the originally state-owned capital-dominated industries.
(For more information about foreign investment of Heilongjiang, please subscribe Xinhua Silk Road Database, http://db.silkroad.news.cn/en/)
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