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6 White Paper on the Business Environment in China
• Promote integration of PRD’s economy and improve
its competitiveness. This includes integrating the trans-
portation systems, infrastructure, urban and rural plan-
ning, industry layout, environmental protection and
public services in the region.
• Strengthen environmental protection through increas-
ing water pollution control, improving air quality and
improving the standards for safe disposal and treat-
ment of solid waste.
• Promote low-carbon development in the province and
improve its mechanism for controlling emissions of
greenhouse gases.
• Optimize the province’s high-efficiency information
network system. The Plan aims to achieve the standards
of a mid-level developed country in terms of IT infra-
structure throughout the entire province by 2015. This
includes reaching an internet penetration rate of 70 per-
cent by 2015.
• Adjust income inequality by expanding the ratio of
mid-income residents and raising the minimum wages
in various cities in the PRD to above 40 percent of the
local average salaries by 2015.
• Improve the social insurance system and medical ser-
vice standards in the province.
• Improve internationalization of education by inviting
several internationally reputed schools to Guangzhou,
Shenzhen, Zhuhai, Dongguan, Foshan and other cities
to jointly establish higher education institutions.
• Deepen cooperation with Hong Kong and Macau un-
der the CEPA. In finance, efforts will involve building
a hub for financial cooperation to be led by Hong Kong
and with PRD cities providing support through their
own financial resources and services. To further enhance
services industry cooperation and growth between Hong
Kong and Mainland China, the two signed the Tenth
Supplement to the Mainland and Hong Kong Closer
Economic Partnership Arrangement (CEPA), effective
January 2013.
• Internationalize the province’s economy and optimize
its structure of FDI utilization. Foreign investment is
encouraged in the following industries: high-end man-
ufacturing, high- and new-technology, modern services,
new energy, and energy efficiency and environmental
protection. The key focus will be on attracting investment
from Global Fortune 500 companies and leading enter-
prises in various industries, and strengthening coopera-
tion with developed countries such as the U.S., Japan and
European countries in terms of business, trading, technol-
ogy and culture. Foreign investors are also encouraged to
establish venture capital enterprises, private equity invest-
ment funds and invest in enterprises within the province.
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• Establish proper commercial dispute resolution mech-
anisms and improve legal systems to create a fair and
orderly environment for market competition, condu-
cive to the internationalization of the economy.
The Outline of Guangdong’s 13th Five Year Plan is currently
under discussion, but has not yet been released.
Spotlight on Shenzhen Government Innovation
Shenzhen’s government has taken the lead on a number of
new initiatives to become the national leader in innovation and
private enterprise growth. The city has experienced rapid pri-
vate economic growth, spawning about 450,000 private com-
panies, including international giantssuch as Huawei Technol-
ogies Co Ltd, Tencent Holdings Ltd, China Vanke Co Ltd and
BYD. Available incentives include a recent VAT and business
tax exemption policy for small and micro-sized enterprises. The
government has also adopted specific measures in terms of equi-
ty investment incentives, e-commerce promotion and the intro-
duction of electric vehicles. Lastly, as part of a pilot program to
curb emissions of key pollutants and clean up the environment,
foreign investors are now permitted to trade carbon permits in
Shenzhen.
Equity Investment Incentives
Private equity (PE) investment has emerged as one of the
most important capital-raising avenues for small and medi-
um-sized enterprises. Recognizing this, the Shenzhen govern-
ment has become one of several coastal city administrations to
offer further incentives to equity investment enterprises. The
city has established a PE Development Fund (PEDF) and clar-
ified operation procedures for PE funds that intend to apply
for financial support from the PEDF. Incentives offered to PE
funds include: rewards for local financial contributions, office
purchase and rental subsidies, one-time settlement rewards, and
one-time rewards for investment withdrawal.
E-Commerce Promotion
In September 2009, Shenzhen was approved by China’s
NDRC and Ministry of Commerce (MOFCOM) to become
China’s first “e-commerce model city”. In addition to streamlin-
ing registration processes for e-commerce companies, the city has
made other efforts to promote the development of e-commerce.
One example is the building of dedicated industrial parks, such as
Futian International E-commerce Industrial Park, which opened
in 2009 and houses more than 150 internet and e-commerce
companies.
One state-level project being developed in Shenzhen is the
Qianhai Shenzhen-Hong Kong Modern Services Cooperation
Zone, approved by the State Council in June 2012. By the end
of January 2015, a total of 21,666 companies with a combined