China has a host of three letter
industrial zones that although slightly different in category often
have similar functions. Below is a list of the terms that one
encounters frequently in China with an explanation of their history and
terms of reference. Hopefully the below will help those trying to
look for a location to either produce or to source products and better
understand the circumstances that exist in that defined commercial
entity.
Special Economic Zone (SEZ)
- Initiative by Mr. Deng Xiaoping in 1979
- The first window of China open to the outside world
- Experimental arena for China’s economic reform and
open-door policy
- 5+1: Shenzhen, Zhuhai, Shantou, Xiamen, Hainan
Island, and Shanghai Pudong, all in the coastal area
- Special policies and incentives (duty free, tax
break etc.) granted at early stage, not many at present
- 15% corporate income tax rate for all enterprises,
compared to the rate of 33% in most parts of China
- Shanghai Pudong and Shenzhen emerged as China’s
international cities
Economic &
Technological Development Zone (ETDZ)
- national certified, located in major industrial and
commercial cities across the country
- Pioneering zones in the region with good
infrastructure to observe foreign investment
- Focus on manufacturing of labor-intensive consumer
products
- Foreign investors aiming at China market entry or
lowering cost for export
- Many other local ETDZs, not national certified, less
regulated, not recommended
Free Trade Zone (FTZ)
- Enclosed, bonded zones
- all along coastal area in cities with port facilities
- Function: transit trading, distribution, logistics
service, and manufacturing
- Besides the same policies and incentives as ETDZs,
FTZ also enjoys:
- Import license free
- Duty free/bonded for all imported goods
(manufacturing and office equipments, components etc.)
– Simplified customs clearance
procedures
– No customs fee for storage and transit goods
– Less foreign exchange control
High-Tech Park
- focus on new and advanced technologies
- Function: technology products manufacturing,
R&D, start-up, and education
- Park in park: Incubator Campus, Software Park, IC
Design Park, Overseas Returnees Park etc.
- Home for the China high-tech big companies like
Huawei, Lenovo, SMIC, ZTE etc.
- Pool of international and local venture capitals
- Besides the same policies and incentives as ETDZs,
High-Tech Park also enjoys:
-Local governments
subsidized land price and property rental
-Central and local government funding support
- VAT subsidies
Export Processing Zone (EPZ)
- most located in ETDZs
- Enclosed, bonded zones
- Function: manufacturing for export only
- Besides the same policies and incentives as ETDZs,
EPZ also enjoys:
– Import license free
– Duty free/bonded for all imported goods
(manufacturing and office equipments, components etc.)
– No VAT in the zone
– Goods (including public utilities) export to EPZ
from China qualified for VAT rebate
– Simplified customs clearance procedures, 24/7
schedule – Less foreign exchange control
Bonded Logistics Zone (BLZ)
- BLZ: Shanghai, Shenzhen, Dalian, Tianjin, Qingdao,
Zhangjiagang, Ningbo, and Xiamen. All connect to ports, so called
“Zone-Port Connection”
- Bonded Logistics Center (Type B): Suzhou
- Function: bonded warehousing, international
distribution/delivery, simple processing & value-added service,
transit trading, and virtual port
- Incentive:
– Goods from
overseas are bonded, no customs duty or VAT required
– Goods from China are regarded as exports and enjoy
VAT rebate when entering BLZ
– Goods in BLZ are allowed to consolidate, transfer
and store without time limit
More on Industrial Parks in Asia:
|
