Status Quo & Opportunities----from the perspective of XiamenSEZ

1. Status Quo & Opportunities
----from the perspective of Xiamen SEZ
Speaker: Arthur Zhang
Director of Xiamen Investment Promotion Agency
Email: hyzq@xipa.com.cn March 17, 2009

2. Outline
Xiamen Facts
Core Competence-----excellent environment
Economy and FDI
Manufacturing Industry
Service Industry
Import & Export Trade
Opportunities for Xiamen SEZ
About XFIB & XIPA

3. Xiamen Facts
Core Competence-----excellent environment

4. Where is Xiamen
Beijing
Xiamen Taiwan
Hong Kong 40 million
People
– In the South of Fujian Province
15 million
– To the west of the Taiwan Straits people
– Sits between the Pearl River Delta and
Yangtze River Delta
– Permanent Population: 2.43 million
– Area: 1,573 km2
– Population of Xiamen, Zhangzhou and
Quanzhou in total : 15 million

5. Great changes in the last 100 years
Ancient name of “lower gate to the sea” Present name of “gateway to China”
Xiamen (Amoy) Port in 1905 Xiamen International Cruise Port in 2008

6. A Modern Port & Tourism City
Important Central City on the West Coast of Taiwan Straits
International
UN
Nations in
Habitat
Bloom
Award
Gold Medal
Xiamen
City by
World Bank
Best City
for MNCs’
Investment
Best City for
Migrant
Workers

7. One of Five Priority
among South China’s Regional Cities
Recent research commissioned by UK Trade & Investment (UKTI) lists
Xiamen as one of 5 key regional cities in South China for UK business
opportunities, share rapid economic growth, large and developing consumer
and industrial markets, and strong local government support, and offer
greatest potential as business locations.
General Business Environment Grouping
Group A (Most attractive) Group B Group C Group D Group E Group F
Dongguan Dalian Foshan Changchun Changsha Baotou
Hangzhou Ningbo Nantong Chengdu Dongying Daqing
Qingdao Tianjin Nanjing Weifang Ordos Harbin
Shanghai Wuxi Shenyang Wuhan Jinan Hefei
Suzhou Xiamen Shaoxing Zhengzhou Shijiazhuang Wenzhou
Weihai Yantai Zhuhai Zibo Tangshan Xi’an
(Source: Opportunities for UK Businesses in China’s Regional Cities)

8. Administrative & Industrial Layout
Tong’an
Industrial
Concentrated
Zone
Torch Hi-
a
Se
rn a tech
ste e
Ea Ar (Xiang’an)
en m Industrial
am ogra
Xi Pr Zone
Mechanic
Industrial
Concentrated
Aviation Industrial Park
Zone
Wuyuan Bay CBD
Free
Trade
Zone
Guanyinshan CBD
Export Processing Zone
Free P
ort Zon Software
e
Park Software Park
Phase I
Phase II

9. Air Transportation
Tokyo
ht
Amsterdam
Flig
Seoul
go
Osaka
Car
Fif
th
Luxemburg Fre
ular
e dom
Fifth F
eedom
reedom
Fifth Fr
Reg
L.A.
Chicago
Hong Kong
Taipei Fifth Freedom
Macao
Bangkok
Manila
• Major aviation hub in East China
Kuala
• 4th largest gateway airport in China
Lumpur
• 150 domestic and international air routes,
Singapore Jakarta
which are served by 27 airlines at the airport.

10. The World’s 19th largest Container Port
7th largest container port in China 137 container shipping routes
Throughput of Xiamen port in 2008 is 5.04 million TEUs & 97.0 million tons of cargo.
The world’s top 20 shipping companies have all set up their businesses in Xiamen.
4th port in China to handle the sixth-generation large container vessels.

11. Beijing
1500km
Shanghai
1350km
Xiamen
Taipei
680km
Shenzhen
Macau Hong
Kong
Xiamen is one of the 47 land transport hubs granted by China’s Ministry of Communications.
Extensive trucking services develops the city into the regional economic and logistics center.
Well-developed highways connect Xiamen to major cities in the Pearl River Delta such as
Shenzhen and Guangzhou and the Yangtze River Delta such as Shanghai and Hangzhou.
Highway Transportation

12. Rail Transportation
More railways will connect Xiamen with the National Railway Network, making it a key
rail hub in Southeast China.
The biggest railway goods yard of southeast coast of China---
Qian Chang Railway Goods Yard covers an area of 5,700 mu with 17 loading and
unloading lines, started the construction in 2008.
Length Hours Open Time
Origin/terminus
Routes
（km）
Wenzhou/Fuzhou
Wen-Fu 298.4 2 2009
Fuzhou/XIamen
Fu-Xia 276 1.78 2009
Xiamen/Shenzhen
Xia-Shen 500 3 2010
Xiang-Pu
Gan-Long Ganzhou/longyan 290.1 4 April 2005 railway
Long-Xia Longyan/Xiamen 150 2009
1
Nanchang /
Xiang-Pu Fuzhou, Putian 603.6 3.5 2011

13. Xiamen’s Core Competence
--excellent environment

14. Xiamen’s Core Competence
-----excellent environment

15. Xiamen Facts
---Economy and FDI

16. Burgeoning Economy in Xiamen
Unit: USD million
50000
45389
44740
45000
40000
35000
30000
22941
25000
20000
15000
10000
5000
0
GDP Total Industrial Output Import & Export Value of
Value Foreign Trade
1990 1995 2000 2005 2008

17. Xiamen Brands
Famous Brands Famous Local Companies

18. FDI in Xiamen
By the end of 2008，there are 8,284 FDI projects approved in Xiamen, with a
contracted value of US$ 30.62 billion and paid-up value of US$ 18.94 billion.
Total FDI flows continue to increase by 40% for the past 3 years.
43 “Global Fortune 500” invested 76 projects in Xiamen, with a total foreign
investment of US$ 2.83 billion.
Total
Unit: billion USD
contracted
value
surpass 1
billion USD
3.27
2.31
1.90
1.30
1.06
0.67
2003 2004 2005 2006 2007 2008

19. U.K. Investments
• 40 UK invested projects, total contractual value of US$ 130 million
• Industries: glass fiber, aerospace components, electronics, consultancy, trading,
software development
Meggitt PLC is an international aerospace, defense and electronics
group with a consistent record of strong financial performance.
Premium Aircraft Interiors Group Limited is a group of leading
aircraft interior supplier, an international group headquartered in the
UK, with manufacturing operations in the USA, UK and Germany .
Microgard Limited is in full control of the garment development, design,
testing and manufacturing process. From its Headquarters in Hull, UK,
Microgard develops and specifies base materials using state of the art
technologies to provide the highest levels of protection and comfort .
TESCO invested its first project via Hongkong in January 2009 with
registered capital of USD 98 million.

20. “3 4 5 6 7 8”
FDI enterprises’ contributions to Xiamen’s economy :
30% of fixed assets investment;
40% of tax revenues;
50% of job opportunities created;
60% of imports & exports;
70% of economic growth;
80% of GDP

21. Xiamen Facts
--- Manufacturing Industry

22. 3 Pillar Industries
Electronics & Information Industry
Machinery Industry
Fine Chemical Industry
Electronics & Information
32.5%
Others
Machinery
27.6% Fine Chemical 25.2%
14.7%

23. 3 Pillar Industries
Electronics and Information Industry- Xiamen is the home to famous domestic
and international brands as Xoceco, Amoi, Dell, Matsushita, TDK and FDK. The
production and sales of digital TV, faxing machines, auto audio, displayers, telephones,
compact discs, transformers, capacitors, IC fix frames, relays and photo-electric
equipments list Xiamen among the top in China.
Machinery Industry- Xiamen has about 180 machinery and metallurgy companies,
and it is superiorly established in various sectors including engineering machinery,
power distribution equipment, large and medium-sized buses, tungsten products and
aviation maintenance.
Fine Chemical Industry- A world-class manufacturing base of color film/paper has
been established in Xiamen. Its rubber tire industry manufactures quite a complete set
of products and holds a big share at the domestic and Southeast Asian market. Here is
also the world’s biggest PTA production line of single series and the manufacturing
and R&D base of polyester.

24. Key Enterprises—Components & ICT & Optronics
Dell Computer – the world’s top PC manufacturer;
Lenovo Mobile Phone – 1st in Chinese domestic brand market;
Amoi Mobile Phone – 2nd in Chinese domestic brand market;
Faratronic – China’s No.1 thin film capacitors manufacturer;
Panasonic – Digital cameras, car-borne GPS devices;
AUO – the world’s top TFT-LCD manufacturer;
Xoceco – China’s NO.1 LCD TV exporter, with 4% of global market share;
Genius Optical – the world’s No.1 mobile phone camera lens;
Motic – China’s No. 1 exporter of digital microscopes and top 5 in the world;
Epistar – the world’s top high power LED chips manufacturer
San’an Optoelectronics – China’s No. 1LED wafer and chip manufacturer;
Hualian Electronics – one of China’s largest LED products

25. Xiamen Facts
-----Service Industry

26. Silk Road on the Sea
— 1,000 years of trading history

27. Consumption Market & Business Forms of Commerce
Unit: RMB 0.1billion
Status of Social Consumption Retail Sales in Xiamen (2002-2007)
The consuming market of Xiamen grows steadily. From 2002 to 2007，the
yearly average growth rate is 15.1%. The social consumption retail sales in
2007 was RMB36.205 billion（about US$5.232 billion）.
Various business forms of retailing are in operation, such as shopping malls,
supermarkets, convenience stores, boutiques and vending machines.
Big retailers like Wal-mart, Carrefour, Tesco, Metro, Trust-mart have already
invested in Xiamen, and their sales performances ranks among the top in China.
Many other famous companies also have investment in Xiamen including New
World Department Store from HK and B&Q from Europe, etc..

28. Haicang Free Port Zone
On June 6, 2008, Haicang Free Port Zone was approved by the State
Council and became one of 7 Free Port Zones in China. It is also one of
2 free port zones in South China with Qingzhou of Guangxi Region.
Major policies：
Policies of the bonded zone, export processing zone and bonded logistics
park will all be implemented in the free port zone. Goods in the zone can
be freely stored, repacked, processed and manufactured. (The top two ports
in the world, Singapore Port and Hong Kong Port , are both implementing
free port policy.）
Planned size ：9.5092 k㎡
Four parts: Haicang Port Area, Songyu Port Area, Export Processing Zone
and Haicang Logistics Park
Time for operation：Phase I will be put into use in May 2009.

29. Convention and Exhibition Industry
Brand Fairs : China International Fair for Investment and Trade (CIFIT)
China Xiamen Machinery & Electronics Exhibition (CXMEE)
National Fairs: West-Taiwan Strait Auto Expo, International Food Procurement Fair,
Xiamen Gift & Home Decoration Show, International Stone Fair, China Sporting & Leisure
Goods Fair
International Meetings：、World Choir Games, International Dragon Award (IDA)、ISE
Meeting、International Machinery Conference in China (IMCC), ICCA, etc.
Enterprises’ Annual Meetings: ABB, Kodak, Dell, Schneider ,Pepsi, Fujitsu、Exxon
Mobil 、Toyota、Teco……

30. CHINA INTERNATIONAL FAIR FOR INVESTMENT & TRADE
http://www.chinafair.org.cn
Sponsor: Ministry of Commerce, P.R.China
Co-sponsors: UNCTAD, UNIDO, OECD, IFC, WAIPA, CCIIP
Venue: Xiamen, China
Time: September 8~11 annually
An event of Class----UFI-approved Event：
→Strong support from China’s Central government: CIFIT is the only national
investment promotion event sponsored by the MOFCOM, approved by the
State Council;
→ Unique World-wide investment promotion event ever approved by UFI (The
Global Association of Exhibition Industry.

31. Banking Industry
branches of 4 big commercial banks
branches of 6 small and media commercial banks
1 regional commercial bank
1 post saving office
1 rural credit cooperative
15 branch and representative offices of
foreign banks
1 other financing company

32. Xiamen Facts
-----Import & Export Trade

33. Import & Export Trade Development of Xiamen
1998-2008
Unit: USD 100Million
450
400
350
300
250
200
150
100
50
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Total Foreign Trade Value Import Value Export Value
In ten years time from 1998 to 2008, Xiamen’s foreign trade value grew 6 times higher from USD 7.62
billion to USD 45.39 billion at an average annual rate of 20%. The export value grew 6.8 times higher
from USD 4.3 billion to USD 29.39 billion at an average annual rate of 21.9% while the import value
grew 4.8 times higher from USD 3.32 billion to USD 15.99 billion at an average rate of 17.6%.

34. Import & Export Trade with U.K. (2008)
(Unit: Million USD)
Export to U.K. Import from U.K.
US$ 864.66 million, up by 58.26% US$ 333.56 million, up by 41.58%
Main Products: Main Products:
Watercrafts: 191.15 Photosensitive materials: 77.60
Garments: 83.94 Spare parts of Aircraft: 44.80
Waste paper: 31.47
Taps & Valves: 78.52
Lift equipments & accessories:
Shoes: 63.01
15.05
Efficient light bulbs: 44.31
Waste copper: 10.83

35. Opportunities for Xiamen

36. Encouraged Industrial Fields
Manufacture Industry:
High-level manufacturing industry:
TFT-LCD, LED, PV and auto electronic devices, etc.
Less land coverage with high added value
Service industry:
logistics, tourism, financing, fair & exhibition, software & IT
services, trading, culture, Intermediary agency and real estate

37. Key Manufacturing Industrial Chains with
Targeted Output Value of RMB 10 Billion
Industrial Chain Covered Industries Key manufacturers
LCD industrial chain Backlight module, LCD displays, LCD TVs AU Optronics Corp(AUO)
KINGLONG Bus 、
Automobile Automobile, auto parts & components, tires of
industrial chain vehicles & engineering machinery Golden Dragon Bus Co.Ltd
Electrical appliance Power distribution & control equipment, electrical ABB Low Voltage、
& power distribution appliances & components, specialized electrical ABB Switchgear
industrial chain devices
Longtop Inc.
Software & IT Software development, IC design、embedded
industrial chain software、software services
Xiamen XGMA Machinery
Engineering Machinery for construction engineering,
heavyweight handling equipment Co.,Ltd、Linde Forklift Truck
machinery industrial
Corp. Ltd
chain
Aircraft Taikoo Aircraft Engineering
Aircraft maintenance & aerospace components
Co.Ltd
manufacturing
maintenance
industrial chain
LED & PV industrial San'an Optoelectronics、
LED substrates & materials, LED wafer & chip,
chain solar cell, organic compounds cell, LED chip test & Hualian Electronics Co Ltd
assembly, lighting Application Products

38. Key Service Industrial Chains with
targeted contribution to 10% of GDP
Industrial Chain Covered businesses Key service providers
Financial industry Deposits & loans business, financial ICBC, ABC, Bank of China, CBC, Bank of
intermediaries, property insurance, Communications, Xiamen City Commercial
life insurance, securities brokerage Bank, PICC, China Life Insurance, Ping An
business, investment banking Insurance, Xiamen Securities, Xiamen ITG
Futures
Logistics operation Modern Logistics Park, Haicang Kenfair Logistics, Port Development,
industry Free Port Zone, Qian Chang Railway Superchain Logistics, Hongxin
Goods Yard Entrepreneurship, China Logistics, ITG TIDAK
Logistics, Jinlian Logistics
Tourism & exhibition Hotels, travel agencies, retailing, Kenfair Travel Group, Seashine Tourism
industry leisure industry, catering, transport, Group, Xiamen Tourism Group
tourism
Real estate industry Development & sales of housing & China Resources Land, SEZ Property,
commercial property Haicang Investment, Seashine Real Estate
Cultural industry Cultural services, cartoons, creative Xiamen VA Group, Xiamen Daily Newspaper,
industry Youbide, Huihe Stone Carving Art, WorldCom
Warner, Blue Bird Cartoon, G-Bits

39. Opportunities for Xiamen
Unique Adjacency to Taiwan:
less than 1 hour’s flight from Taipei to Xiamen
Xiamen is only 136 sea miles to Taichung, 165 sea miles to Kaohsiung,
222 sea miles to Geelong Port.
Big chances for Taiwan hi-tech industries’ vertical integration: TFT-LCD,
LED and IC design
Taipei
Xiamen
Taichung

40. Improvement of Cross Straits Relations
More Opportunities for Xiamen
transportation costs largely reduced by direct flights
Xiamen 1h30m 45m
Shanghai 5h 1h30m
Taiwan
Beijing 7h 3h
(Direct Flight)
Seaport Cost Saving Under Direct Sea Freight
Shenzhen Xiamen / Fuzhou Shanghai Qingdao
Cost Saving 20% 61% 52% 50%
(Source: )

41. Xiamen

42. Tax Preference
For high and new technology enterprises:
-Corporate income tax: 15%
-5-year tax holiday for newly established ones: 2 years
exemption, 3 years half reduction (only applies to SEZs
and Pudong new development area of Shanghai)

43. Xiamen Foreign Investment Bureau
(XFIB)
• XFIB is a functional department operating under Xiamen
Municipal Government, mainly responsible for the City’s
foreign investment related affairs.
• Its main functions include investment promotion,
examination & approval of foreign-invested projects,
management & services for foreign-funded enterprises,
consultation on foreign investment policies, and handling
complaints lodgedby foreign-funded enterprises.
More details on: http://www.xiameninvest.com http://www.fdi-xiamen-cn.com

44. About XIPA
Xiamen Investment Promotion Agency (XIPA) is a professional investment promotion
organization established by Xiamen Municipal Government. XIPA operates up to
international practices and provide “one-stopquot; service to investors for free-a simpler and
faster investment channel to serve investors’ interest better.
What XIPA can do for you:
Provide information regarding Xiamen’s investment environment, opportunities and
the facts needed for decision-making
Carry out field survey and market studies during the early stages of investment
Recommend the most suitable location and best mode for investment
Arrange investment site tours
Support, backup and problem solution in the investment process
…
Visit us at: http://www.xipa.com.cn

45. Thank You !