Located in the center of the Pearl River Delta (PRD), Zhuhai is one of China’s four original Special Economic Zones (SEZs) established in 1980. The city borders Macau to the south and is within an hour’s drive of Guangzhou and Shenzhen. Since 1990, Zhuhai’s economy has exploded, thanks in part to its proximity to Hong Kong and Macau. It is also China’s only deep-water port west of the Pearl River.
In 2014, Zhuhai’s GDP reached RMB 185.7 billion, an annual increase of 10.3 percent. The city’s primary industry contributed RMB 4.9 billion of its total GDP, and its secondary industry RMB 93.9 billion, accounting for more than 60 per cent of the economy. Services comprised the remaining RMB 86.9 billion, of which modern services accounted for RMB 50.1 billion. According to the Zhuhai customs department, total imports and exports reached US$47.7 billion in 2015. The U.S. remains Zhuhai’s third largest trading partner, and in 2014 exports totaled US$1.24 billion. Primary U.S. exports to Zhuhai include crude oil, integrated circuits, printing/publishing equipment and automatic data processing devices.
Zhuhai is now a major manufacturer of electronics, and the city is actively promoting hi-tech and high value-added industries such as software, petrochemicals and ocean-based industries. The city’s primary industries are electronic information, bio-pharmaceuticals, petrochemicals, electrical appliances, precision machinery manufacturing and energy. The following sectors may be of particular interest to U.S. exporters:
Pharmaceuticals and Cosmetics
Zhuhai’s local government is struggling to build a self-sufficient pharmaceutical and cosmetics industries, with domestic companies still largely reliant on importing foreign technology and products. Lack of manufacturing facilities and inspection equipment for drugs has greatly impaired the development of its healthcare industry.
In 2013, the Zhuhai government released preferential policies exclusively for enterprises engaged in selling/producing health food, medicine, medical devices and cosmetics. Foreign medical institutions are encouraged to export medical products to China and provide R&D services to Chinese companies. In particular, the Zhuhai local government actively supports the bio-pharmaceutical industry and recently invested RMB 1 billion to support the establishment of R&D centers. Qualified foreign medical institutions are granted financial support and stipends when exporting advanced medical technology to China.
High-tech Industry Cluster
The growth of the high-tech industry cluster (which includes software, integrated circuit designs, high-end equipment manufacturing and printing) is a top priority for the southern China manufacturing industry. In addition to China’s national tax incentives (a 15 percent income tax rate) provided to high-tech enterprises, Zhuhai offers additional tariff exemptions to foreign high-tech companies who export key raw materials, parts and advanced technological devices to the city. Meanwhile, foreign companies who contribute to the development of Zhuhai’s domestic high-tech industry (e.g., provide technical services/consultation to a local technology company) could qualify for financial incentives from the local Chinese government.
Seeking to develop the “internet of things”, cloud computing, value-added internet services, telecommunication and high-end electronics manufacturing, Zhuhai provides various tax rebates and stipends for enterprises engaged in the electronics industry. In 2012, Zhuhai began offering financial incentives of more than RMB 50 million per year to companies involved in research and development of software and hardware technology. The Zhuhai government also seeks to create additional software parks and modern electronic information industry bases in the next few years to facilitate import/export procedures for high-end electronic products.
Zhuhai Economic and Technological Development Zone (Gaolan Port EDZ)
In 2012, the Zhuhai ETDZ, previously known as the Gaolan Port Economic Development Zone, was promoted as the first national economic and technology development zone west of the Pearl River Delta. It is one of southern China’s most important large-scale comprehensive harbor industry zones and is focused on equipment manufacturing, petrochemicals and energy.
Zhuhai Hengqin New Area
Hengqin New Area, officially established in December 2009, is adjacent to Macau. As part of the One Country, Two Systems policy, the central government is trying to integrate the economies of Hong Kong, Macau and Mainland China. Hengqin is situated directly across the water from Macau, and as such is a pilot zone for integration. In early 2015 China included the Hengqin New Area in its newly established Guangdong Free Trade Zone. It offers China’s most lucrative tax incentives and convienent 24-hour customs clearance services. Enterprises engaged in the area’s preferred industries such as finance, tourism and R&D may enjoy a reduced 15 percent income tax rate, which is even lower than that of Hong Kong.
Goods imported to China via Hengqin Customs may enjoy deferred import value-added tax (VAT) and tariffs payment. Machines and office equipment sold to enterprises in the new area for their self-use or manufacturing purposes are exempt from customs duties. Enterprises trading goods within the Hengqin new area are exempt from VAT and consumption tax payments. In addition, comparatively lenient financial industry regulations in Hengqin facilitate cross-border trade in foreign currency and foreign exchange settlements.
Sister City Relationships
Zhuhai became the sister city to Redwood City, California in 1993. Business ties between the two cities began in the 1980s. Redwood City is home to prominent technological companies such as Oracle and Electronic Arts, which blends perfectly with Zhuhai’s current development strategy.
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