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All you need know about Economic and Technological Development Zones in China

As a result of reform and opening up policies, China has established a series of Economic and Technological Development Zones (EDZs) since the 1970s. With the progressive relaxation of market regulations and sectors open to foreign investment, the EDZs have been the main pilot to attract foreign direct investment (FDI) and boost domestic growth.

In order to be certified as a national zone, the area needs to meet certain requirements such as annual turnover (RMB 100 billion+), tax income, volume of export and FDI. Foreign Invested Enterprises (FIEs) which are established in EDZs can thus enjoy benefits which are different from other areas governed by the country as a whole：

• a higher level of autonomy over their operations;
• a variety of tax exemptions, land and building subsidies;
• preferential employment policies;
• support and participation by governmental agencies;
• hubs of technology, learning and innovation.

How investors choose a particular development zone depends largely on the nature and priorities of their companies’ routes to the Chinese market. Meanwhile, it is vital for foreign investors to consult a professional services firm which can assist them to select a suitable EDZ for establishing or relocating business in China.

The Changshu Economic and Technological Development Zone

Founded in 1992, Changshu Economic and Technological Development Zone (CEDZ) has become one of the most successful riverside industrial parks in China. In 2010, it was approved as a national level economic development zone. As of 2018, more than 600 FIEs across over 20 countries and regions were incorporated in the CEDZ, reaching USD 35.6 billion in total volume of FDI. Changshu achieved an overall industrial investment of RMB 24.777 billion through 98 major projects entering its operating areas via land of facilities provided by the authorities. The general trade import and export flows increased by 15.9% in 2018. There is a national-level Free Trade Zone (FTZ) in CEDZ, which is an excellent place for both domestic and foreign export-oriented processing enterprises where FDI can enjoy swift and convenient customs-clearance services and preferential policies championing the opening of the Chinese economy.

(CEDZ achievements, source: Changshu EDZ Investment Promotion Bureau)

Why to invest in Changshu Economic Development Zone?

• Distinct location & robust infrastructure

Located in southeastern Jiangsu Province, Changshu lies in the hinterland of the Yangtze River Delta, 90km away from Shanghai, 50km away from north of Suzhou and Kunshan, 50km away from east of Wuxi, facing Nantong across the Yangtze River. The Changshu Port and Xinhua Port serve like transportation junctions for the entries and exits of raw materials and finished products between the northern and southern cities in China. The Yangtze River Golden Waterway allows cargos to be shipped among inland industrial areas such as Chongqing, Wuhan and coastal areas like Tianjin, Guangzhou. The existing transportation vehicles allow FIEs inside CEDZ to spend only 10 minutes to reach the ports and highway. After the Shanghai-Nantong railway commences in 2020, it will take only 20 minutes from Changshu station to CEDZ by driving.

(The location of Changshu and its transportation routes to some of the key cities in Mainland China; source: Changshu EDZ Investment Promotion Bureau)

• Diversified industries & sufficient land resources

CEDZ has a clear focus on automobiles and spare parts, new energies and materials, fine chemicals and pharmaceuticals, equipment manufacturing, big data and cloud computing, eco paper making, modern logistics, and machinery. A number of well-known enterprises have incorporated in CEDZ, such as the automotive manufacturing joint venture – Chery Jaguar Land Rover and Qoros, the Italian supplier of equipment and physical plants to the metal industry – Danieli, the Chinese technology material provider – Yieh Phui, the global logistics providers – GLP Group and LOGOS Logistics, and the first Internet financing enterprise in China – Minsheng E-Commerce.

What is more, CEDZ hosts warehousing area of high quality as a domestic distribution center or a logistic park for world-famous retail and logistics brands to store or ship imported products. CEDZ has around 700,000 square meters facility, including standardized workshops and high-end warehouses.Currently CEDZ is developing over 143,900 square meters of new workshops, engaging from 3,000 square meters to 10,000 square meters for each.

(General Plan of CEDZ Riverside Industrial Park, source: Changshu EDZ Investment Promotion Bureau)

• High qualified but cost-effective workforce

Changshu has the largest vocational training based in Jiangsu Province with over 10 technical training institutes to nurture talents for the companies in the zone. The universities and vocational schools provides students with a wide range of training courses ranging from engineering, accounting, chemical, machinery, automation to language learning to ensure the qualification of local employees. Changshu offers skilled workforce with costs of 1.5-3 times on average lower than that of tier 1 cities in China.

(An overview of salary standards for different levels of employees in Changshu as of 2018; source: Changshu EDZ Investment Promotion Bureau)

• Comprehensive one-stop service from the local government

FIEs in the CEDZ are offered with an integral one-stop service and window by the local government agencies and officers. On one hand, the Foreign Investment Service Center serves as a bridge between foreign investors and the local network of service counters where thirteen governmental departments collaborate with each other for new investors to launch their business and commence operations without the usual lengthy timeframe that they may face in other areas.

On the other hand, the CEDZ Administrative Authority offers low-cost or even free of charge services to companies setting-up and operating in the park including assistance in registration applications, construction approval, submission and acceptance of documents, white/blue collars recruiting and etc.

“Changshu Economic and Technological Development Zone Administrative Committee is open-minded, pragmatic and honest, and pays great attention to the growth of the enterprises, the project constructions and industrial development. We will build a high-quality business environment to provide professional and efficient business services to the enterprises. ”

Jianqiang Zhang, Vice Chairman of CEDZ Administrative Committee

“The current International framework for inbound and outbound remittances in foreign currency including capital injection into FIEs in China and dividends distribution are strictly regulated by the local authorities. Our international desk holds expertise and established communication channels empowering our clients in Changshu to enjoy top-notch compliance and a swift feedback on whatsoever payment flow involving their China entities.”

Industrial and Commercial Bank of China Changshu Sub-branch

How can Hawksford help?

Via our office in Changshu and other major cities in Mainland China, Hawksford provides international companies with legal, taxation, accounting, HR and other essential out-sourced business services. No matter what stage of development your company is at, our dedicated on-the-ground teams always stay up-to-date on local developments and promise you to establish the right relationships in the target market.