Zhoukou Introduction. Zhoukou city is located in southeast of Henan Province, lying northtatitude 30°03’-34°20’and east longitude 114°05’-115°39’ and is between the Yellow River and Huaihe River of the intermediate latitude.The city is iffluenced by cold high pressure from Mongolian and sub-high pressure circumfluence from pacific Ocean in winter and summer respectively, belonging to half-clouding seasonal climate of warm temperate zone. It is cold in winter and hot in summer with rain and hot time at the same period and clearly demarcated seasons, which is suitable for crop growth. Zhoukou is th Commodity Grain Base famous in China, Advanced City for Virescene in Central China and Home of Chinese Acrobatics. The city includes eight counties, one city and one district, that is Chuanhui District, Xiangcheng city,Shangshui county,Xihua county,Fugou county,Taikang county,Dancheng county,Huaiyang county,Shenqiu county and Luyi county, and has a land area of 11959 square kilometers, farming land 11.7 million mu and population 10.6 million.

Zhoukou is a city with long history and deep human culture, and one of the important birth place of Chinese civillzation. It is said that Taihao Fuxi and Shennong(Known as Yan Emperor) established the capital here, which started epoch of traditional farming civilization of Chinese people. It was an area with advanced productive force with creartion of totem of the dragon, that is “arrest official with dragon” ”named dragon master”, and the name of “descendents of the dragon” also thus came. Zhoukou is the original place of such great family names as Chen and Xie etc., Also place of “dragon root” of Chinese.

The long history and brilliant culture of Zhoukou has made the place famous all around China for talented people and sages in historical books.

Construction in rural and urban areas is changing day by day. Rural and urban construction layout of Zhoukou is rational, with central city, counties and towns as three starting points to form a three-degree radiating city construction system. Such special markets as international business mall, Water lily market, Railway construction material market and Agricultural material market have been constructed. Beautification, lightning and virescene projects hae been carried out surrounding the “one saving and three creations” activity and city environment has been greatly improved. The total investment in year 2004 was 450 million RMB. 14.8 Square kilometer city urban has been increased , urbanization reached 16.5% and the process has quickened conspicuously.

Opening up brings bright future. “Opening up mobilizing strategy” has been implemented in Zhoukou to improve investment environment, attract foreign businessmen to invest and obtained great achievements. Foreign trade and export is very convenient as Zhoukou greatly promote the foreign economic and business activities. Altogether 18 kinds of products in 5 categories have been exported to USA, Russia, Nigeria, Japan, Singapore and Taiwan, and opening Zhoukou with harmonious development of various undertakings is marching for-ward in the new century.

Traffic transportation. Transportation in the city is very convenient, and highway, railway and waterway have mixed and led to all directions. 311 national highway crosses the city form east to west while 106 national highway crosses the city form north to south. Ashen expressway, Luohe-zhoukou expressway, and meet in zhoukou. Zhoukou has been the largest inland dock of Henan province in the history, which leads to Huaihe River and Yangtze River, reaching Nanjing and Shanghai. Luohe-Fuyang railway, BeiJing-Guangzhou and Beijing-Jiujiang have been put into use. Zhoukou is one hour’s jourey to Xinzheng Interantional Airoprt.

Post and telecommunication. Post and telecommunication of Zhoukou has developed quickly. Program controlling telephone installation capacity has been increasing constantly and long distance phones can connect anyway in the country and most countries and areas in the world; mobile communication has realized roam with 85 countries and regions and automatic roam in the country, while many communication business such as digital data special line, grouping exchange, electric data exchange, posthaste delivery, telephone information and picture fax have been opened, thus communication is very quick and convenient.

Water and electricity Supply. Water and electricity supply in Zhoukou is sufficient, and the annual electricity supply amount has reached 3 billion kilowatt hour, while electric power and central heationg supply is sufficient and can meet demand of citizens and industrial items; water supply system is perfect and the net is complete, with the daily water supply capability of 200 thousand tons.

INVESTMENT POLICY

PREFERENTIAL POLICY FOR FOREIGN INVESTING ENTERPRISES

1.         Imported equipment tax exemption preferential-For self-used equipments imported within total investment meeting requirement of Encouraging Category of Guidance Catalog for Foreign Investing industries and belonging to foreign investing projects with technological transfer, tariff and import added tax will be exempted except for commodities listed in import commodity list for foreign invested projects without tax exemption.

2.         Domenstic equipment purchase drawback preferential- For investment projects meeting requirement of State Council Notice on Adjustment of Imported Equipment Taxation Policy(Number 37[1997]), Encouraging Category of Guidance Catalog for Foreign Investing Industries Catalog for Industries, products and Technologies Encouraged by the State, they will enjoy drawback added tax preferential when purchased inside the country.

3.         Foreign investment enterprise investing again in central and west areas will enjoy the treatment of foreign investment enterprises if the foreign capital goes beyond 25%

4.         Main preferential contents of Zhoukou Suggestions for Quickening Development of Opening Economy are as following:

(1). Except for fields forbidden by the state, all other fields re opened to foreign businessmen. Outgoing investment will be introduced and forging investment will be encouraged to put into agricultural and agricultural products processing, high and new technology, infrastructure, basic facilities, environmental protection, export and foreign currency creating projects and labor oriented industries, A set of infrastructure projects such as highway, bridge, electric plant, city heat supply, water supply, wastewater and garbage disposal will be put forth and various kinds of business attractions will be adopted. Service industry opening will be continued and investors from home and abroad will be welcomed to invest in commerce, foreign trade, logistics, tourism, finance, insurance, information, consultation, education and sanitation.

(2). Foreign capital will be encouraged to participate in state owned enterprise reform. Foreign businessmen will be engraft and reform state owned enterprises.

(3). All the annual inspection cost of foreign invested enterprises will be exempted. Foreign invested enterprises with no illegal actions and with great running situation for three years, the yearly inspection can be exempted after application of the enterprise and examination of City Combined yearly Examination Office.

(4). Productive foreign invested enterprises in the city will be exempted from city construction matching cost, water resource cost, virescene cost, prevention cost, wall reform cost, and transmission cost of productive house purchase.

(5). Tax preferential will be taken. Foreign investors creating and reforming export enterprises or high and new technological enterprises can be given back the income tax paid before reinvestment.

(6). Foreign enterprises will be attracted to invest. We should catch the opportunity of eastern industry transferring to the central and western regions, fully utilize advantage of resource, location and labors to attract foreign enterprises to participate enterprise reform by way of association, annex, rent, share and stock control, and establish production processing base.

(7). Construction land preferential. For industrial projects(including technological re-from projects) with once investment(land cost not included) of 1 million RMB Yuan-5 million RMB Yuan, 5 million RMB Yuan-10 million RMB Yuan, 10 million RMB Yuan-50 million RMB Yuan, and 50 million RMB Yuan-100 Million RMB Yuan , 40%,60%,80% and 100% of the land remise cost (land imposition cos being exempted) will be compensated respectively, and the compensation method is: after the project is put into use, 50% of the tax remained for the government will be used for compensating the enterprises, till reaching the total amount should be reached. For industrial projects with over 100 million RMB Yuan investment, the government will levy and supply land and guarantee the land use. After the project is put into use, remaining part of enterprise tax will be used to pay for the land cost periodically. Enterprises with foreign capital will enjoy same treatment with foreign invested enterprise in landing using, cost reduction or exemption and hortation.