China Daily Global Edition (USA)
Global investors taking notice of Xiamen
In recent years, Xiamen, in eastern Fujian province, has become one of the most attractive places on the mainland to investors. Local officials said the city will spare no effort to make itself more appealing to overseas companies that are seeking to start businesses.
“Overseas investment is playing an important role in helping Xiamen become an industrialized coastal metropolis,” said Liu Keqing, the mayor of Xiamen. “We welcome more investors and will provide them with safe, convenient, standard, efficient and excellent services.”
According to Chen Jie, deputy director of the Xiamen investment promotion bureau, the city has attracted more overseas investment than any other place in the province for years and the amount of that investment keeps increasing.
In 2000, when overseas investors were allowed to be individual proprietors, it became common practice for them to set up wholly owned enterprises. The number of cross-border acquisitions has since been increasing.
The 11th Five-Year Plan period ( 2006- 10) was an extraordinary time. During it, 2,120 overseas companies were approved to invest in Xiamen with a contractual use of overseas investment exceeding $10.4 billion, Chen said.
According to statistics released by the Xiamen investment promotion bureau, the city had approved a total of 9,337 overseas-funded projects by the end of last year. Those had a contracted value of $35.8 billion, $24 billion of which has already been invested.
The statistics also reveal that existing companies’ additional investments surpassed 45 percent of the total of contracted overseas capital in recent years, which suggests the strong expansion of overseas-invested companies has boosted investors’ confidence and propelled them to expand production.
The latest statistics from the Ministry of Commerce’s special commissioner’s office in Fuzhou show that 82 new overseas-invested companies were set up in Xiamen in the first three months of the year. The contracted overseas capital was up to $360 million, ranking No 1 in the province.
By 2011, Xiamen had attracted 50 of the multinational enterprises listed by Fortune magazine as the top 500 global companies, according to the Xiamen investment promotion bureau.
Thirty-two of the Fortune 500 global enterprises have invested a combined $2.84 billion in manufacturing. The rest of them have invested in agriculture, retailing, logistics, real estate, dining and restaurants.
The list includes big US companies such as Dell, Coca-Cola, GE and Citibank; ABB, Linde, Philips and Metro from Europe; and Matsushita, TDK, Toshiba and Toyota from Japan.
One cause of Xiamen’s appeal to investors is its favorable policies, Chen said.
Since it became a special economic zone in 1981, the city has adopted a series of preferential policies meant to make itself into a promising site for investment.
For instance, a reduced tax rate of 20 percent of corporate income is applicable to small and low-profit overseas-funded enterprises, while a reduced tax rate of 15 percent of corporate income is applicable to high-tech overseas-funded enterprises that seek support from the government.
Under a new policy, if a venture capital enterprise invests in an industry which is encouraged by the central government, the amount of income that is taxable will be deducted in a certain proportion to those investments.
In 2009, Xiamen was listed by the State Council as a main member of the Western Taiwan Straits Economic Zone. The local government has since been striving to make the city into a combination of an advanced manufacturing base and a modern hub for the service industry.
These measures are also giving investors more confidence, especially those from Taiwan,
2.5 said Hong Benzhu, the deputy director of Xiamen investment promotion bureau.
Having a well-developed traffic network is also helping the city attract investors, Hong added.
To seize new trade opportunities on the horizon, Xiamen is being transformed into an international transport harbor. As a seaport, it will provide the world’s marine traffic with 134 berths that can sustain 134 million metric tons of goods and 9.64 million standard containers every year.
Back onshore, such projects as the Xiamen-Chengdu Expressway, the XiamenShenzhen high-speed railway line, will form additional connections between coastal cities and inland provinces such as Sichuan and Hunan.
Although always the spearhead of development, Xiamen still needs to put overseas investment high among its priorities, Hong said.
On Aug 27, the Xiamen investment promotion bureau announced that it will concentrate on meeting four goals in the interest of making the city even more attractive to investors.
Fortune 500 companies’ projects will be highlighted. The city will improve the coordination of work and help arrange exchanges between city authorities and executives of overseas companies.
Information about ongoing projects will be kept up to date and the city will try to solve problems that occur in the process to secure the program. The city’s financial sectors will collaborate with industrial parks to promote overseas investment.
In addition, Xiamen will fully take advantage of the China International Fair for Investment and Trade to widen channels and sources of overseas investment.
The fair has become one of the world’s most influential international investment fairs after 15 years of development and Xiamen will make itself even more appealing to investors from around the world, Xiamen Mayor Liu Keqing said. Contact the writers at humeidong@chinadaily.com.cn and sunli@chinadaily.com.cn