1、Investing in Chinas Greater Bay Area:Tapping into Long-Term OpportunitiesDoing Business in China 2023 SeriesThis Investing in Chinas Greater Bay Area:Tapping into Long-Term Opportunities guide was produced by a team of professionals at Dezan Shira&Associates,with Arendse Huld and Zhou Qian as techni

2、cal editors,and Guilherme Campos as contributor.Creative design of the guide was provided by Nguyen Hoang Linh and Aparajita Zadoo.DisclaimerThe contents of this guide are for general information only.For advice on your specific business,please contact a qualified professional advisor.Copyright 2023

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5、sy to navigate,covering:Why China,Regions to Invest,Sector Insights,How to Setup,Tax,Audit and Accounting,HR,Recruitment,PEO,and Payroll,News,Events,and more.3INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESAbout Dezan Shira&AssociatesDezan Shira&Associates is a pan-Asia,mul

6、ti-disciplinary professional services firm,providing legal,tax and operational advisory to international corporate investors.Operational throughout China,India and ASEAN,our mission is to guide foreign companies through Asias complex regulatory environment and assist them with all aspects of establi

7、shing,maintaining and growing their business operations in the region.With more than two decades of on-the-ground experience and a large team of lawyers,tax experts,and auditors,in addition to researchers and business analysts,we are your partner for growth in Asia.4INVESTING IN CHINAS GREATER BAY A

8、REA:TAPPING INTO LONG-TERM OPPORTUNITIESCONTACTDezan Shira&Associates The Greater Bay Area(GBA)initiative is an ambitious plan to integrate and transform nine mainland cities in the Pearl River Delta and two special administrative regions Hong Kong and Macao into an international bay area that will

9、rival other such world-class city clusters like the New York,San Francisco,and Tokyo bay areas.Since the formulation of the GBA initiative in 2017,business communities have placed high expectation on the coordinated development among GBA cities,as the removal of barriers that limit the movement of t

10、rade,capital,information,and people coupled with targeted government policies will allow various industries to flourish.Given its dynamic and comprehensive industry landscape,its large and wealthy local consumer base,as well its ability to attract highly skilled talents,the GBA is one of Chinas most

11、 investor-friendly areas with a long history of foreign engagement.Nevertheless,with Chinas economy being affected by some downward pressure,including uncertainties caused by mounting geopolitical tensions,comparatively week consumption trends,and the sluggish real estate sector,businesses that tail

12、or their strategy to the GBAs priorities and have a better understanding of the region will be best placed to benefit from its ambitious agenda.Designed to introduce the fundamentals of investing in the GBA,this publication is compiled by experts at Dezan Shira&Associates,a specialist foreign direct

13、 investment firm providing corporate establishment services,business advisory,tax advisory and compliance,accounting,payroll,due diligence,and financial review services to multinationals investing in emerging Asia.We hope this publication can help foreign investors stay nimble in the GBA region amid

14、 an otherwise challenging time.PrefaceALBERTO VETTORETTIManaging PartnerDezan Shira&Associates5INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESTable of ContentsPreface04Part 1|An Overview of Chinas GBA06Part 2|11 Member Cities of the GBA09Part 3|Leading Industries of the GBA

15、19Part 4|Tax Incentives and Government Subsidies in the GBA22Part 5|GBA vs.Hainan FTP27Part 6|Future Development of the GBA31Part 7|Conclusion35An Overview of Chinas GBA17INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIES1The Guangdong-Macao-Hong Kong Greater Bay Area(GBA)is a

16、 mega-city cluster located in the Pearl River Delta comprised of nine cities in the south of Guangdong province and the special administrative regions of Hong Kong and Macao.The nine Guangdong cities include some of the largest and economically active cities on the Chinese mainland,such as the manuf

17、acturing and technology powerhouses of Guangzhou and Shenzhen.The GBA is one of Chinas largest and wealthiest city clusters,second only to the Yangtze River Delta region in eastern China.Its combined economy has grown by RMB 2.4 trillion(US$372 billion)in the five years since the signing of the GBA

18、Framework,reaching RMB 12.6 trillion(US$1.95 trillion)in 2021.That puts the regions GDP roughly on par with that of Canada and accounted for 11 percent of Chinas total GDP in 2021,despite only occupying 0.6 percent of total land area.The GBA also has the highest GDP per capita of any region in China

19、,reaching US$22,585 in 2021.The area has been a core driver of Chinas explosive growth since the economic reform of the 1980s and 90s.The metropolises of Guangzhou and Shenzhen,in particular,have been at the center of Chinas manufacturing and innovation power for decades,fostering some of the bigges

20、t names in technology,real estate,manufacturing,and more.The Port of Shenzhen is the third busiest in China and fourth busiest in the world,handling around 278.4 million metric tons of cargo in 2021.Greater Bay Area Hong Kong9 cities of GuangdongMacao8INVESTING IN CHINAS GREATER BAY AREA:TAPPING INT

21、O LONG-TERM OPPORTUNITIESIn addition to the regions flagship metropolises,the smaller cities present a myriad of new opportunities for foreign businesses and investors.Deeper integration of the area through government policies,improved transport infrastructure,and specialized capabilities and resour

22、ces of the various areas are making these well-connected third-tier cities increasingly attractive to foreign investors.The GBA is also one of the wealthiest regions in the country and boasts a high standard of living,large consumer base,and highly skilled workforce,making its cities an attractive b

23、ase for foreign businesses and their staff.Greater Bay Area ProfileUS$188.4 BGDP9.6 MPOPUS$95.5 BEXIMUS$0.52 BFDIUS$55.2 BGDP4.47 MPOPUS$41.7 BEXIMUS$0.58 BFDIUS$55.8 BGDP0.87 MPOPUS$27.7 BEXIMUS$0.36 BFDIUS$60.2 BGDP2.47 MPOPUS$51.4 BEXIMUS$0.45 BFDIUS$15.4 BGDP0.68 MPOPUS$20.8 BEXIMUS$37.5 BFDIUS$

24、367.9 BGDP7.5 MPOPUS$1.321 BEXIMUS$140.7 BFDIUS$475.3 BGDP17.7 MPOPUS$549.3 BEXIMUS$10.9 BFDIUS$41 BGDP4.13 MPOPUS$6.3 BEXIMUS$0.126 BFDIUS$437.6 BGDP18.81 MPOPUS$167.8 BEXIMUS$8.4 BFDIUS$77.1 BGDP6.07 MPOPUS$47.4 BEXIMUS$1.15 BFDIUS$168.2 BGDP10.5 MPOPUS$236.3 BEXIMUS$1.5 BFDIFoshanZhongshanJiangme

25、nZhuhaiHong KongMacaoShenzhenZhaoqingGuangzhouHuizhouDongguanTotal area:56,098 km2Total population:86.7 millionTotal GDP:RMB 12.6 trillion(US$1.95 trillion)Total utilized foreign capital:US$153.74 billionTotal import-export:US$3.5 trillion*The statistics are as of 2021,except for Macaos FDI data,whi

26、ch is as of 2020.EXIM here refers to the export and import trade amount.FDI here refers to utilized FDI in the current year.11 Member Cities of the GBA210INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESShenzhenPopulation:17.7 millionGDP:RMB 3.07 trillion(US$475.3 billion)(6.

27、7%y/y growth)Import-Export:RMB 3.5 trillion(US$549.3 billion)Utilized FDI:US$10.9 billionShenzhen is the largest city in the GBA by GDP,which reached RMB 3.07 trillion(US$475.3 billion)in 2021.It is also Chinas single largest exporting city,with exports reaching RMB 1.9 trillion(US$266.5 billion)tha

28、t year and the total volume accounting for 44.9 percent of all foreign trade in the nine mainland cities of the GBA.The Port of Shenzhen is the largest in the GBA and fourth largest in the world by throughput,which reached 28.77 million TEUs in 2021.The city is a major magnet for foreign investors.A

29、ctual use of foreign capital reached almost US$11 billion in 2021,with a total of 5,788 new foreign direct investment(FDI)projects established that year.Among these,leasing and business services accounted for the largest proportion of utilized foreign capital at 28.7 percent,reaching US$314.6 millio

30、n.The second largest sector was information transmission,software,and IT services,which accounted for 28 percent of the total,absorbing US$307 million in actual use of foreign capital.Shenzhen is often colloquially called Chinas“Silicon Valley”due to its thriving technology industry.The city has fos

31、tered some of Chinas biggest name in tech-Huawei,Tencent,ZTE,and DJI,to name a few-and continues to be at the forefront of the industry today.Shenzhens 14th Five Year Plan,the citys main economic development roadmap for the period from 2021 to 2025,targets for the“core digital economy industries”to

32、reach 31 percent by 2025 considerably higher than the national target of 10 percent.By the end of 2021,Shenzhen had almost already hit this target,with this sector accounting for 30.6 percent of GDP,surpassing RMB 900 billion(US$124.5 billion)in scale.Manufacturing remains a mainstay industry in She

33、nzhen,and is the citys largest employer,with over four million people employed in the sector at the end of 2020,according to the 2021 Shenzhen Statistical Yearbook.The industry has been modernizing quickly over the last decade,and focus is shifting to manufacturing of high-end products,such as new e

34、nergy vehicles(NEVs),industrial robots,smartphones,and 3D printing,to name a few.Home to the Shenzhen Stock Exchange,one of only three in China,the city is also among southern Chinas key financial hubs.Preliminary statistics show that the citys finance industry grew reached a total of RMB 473.9 bill

35、ion(US$70.8 billion)in 2021,accounting for 15.4 percent of the local GDP.CATHY GONGPartner Shenzhen OfficeDezan Shira&Associates“Shenzhen is often colloquially called Chinas Silicon Valley due to its thriving technology industry.”11INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUN

36、ITIESGuangzhouPopulation:18.81 millionGDP:RMB 2.8 trillion(US$437.6 billion)(8.1%y/y growth)Import-Export:RMB 1.08 trillion(US$167.8 billion)Utilized FDI:US$8.4 billionGuangzhou is the provincial capital of Guangdong and an important political,economic,industrial,and cultural center in southern Chin

37、a.It is the second-largest city in the GBA by GDP,reaching RMB 2.8 trillion(US$437.6 billion)in 2021.The city is also a major trade hub,and the Port of Guangzhou is the fourth largest in China by annual throughput,reaching a cargo throughput of 651.3 million metric tons in 2021.The citys total forei

38、gn trade in 2021 reached RMB 1.08 trillion(US$167.8 billion),of which exports accounted for 58.3 percent and imports 41.7 percent.The China Import and Export Fair,which attracts thousands of merchants and foreign enterprises from over 200 countries and regions,is held in Guangzhou every spring and a

39、utumn.The city serves an important function in the GBA as a transport hub,with its advanced network of air,rail,and highway routes.Guangzhou Baiyun International Airport is Chinas third-busiest airport in terms of passenger throughput,and its railway network is the largest in southern China.Guangzho

40、u is the second most popular destination for foreign investors in the GBA after Shenzhen,with utilized foreign capital reaching US$8.4 billion in 2021 and a total of 4,048 foreign-invested projects established that year.The citys economy has become increasingly reliant on the tertiary sector,which c

41、ontributed 71.1 percent of GDP growth in 2021,the highest proportion of any mainland GBA city.Leading service industries include wholesale and retail,finance,real estate,leasing services,and transportation and logistics.The value-add of the transport,storage,and postal industries reached a combined

42、RMB 152.5 billion(US$23.6 billion)in 2021,while the value-add of the financial industry reached RMB 246.8 billion(US$38.3 billion).Manufacturing remains an important mainstay sector,in particular,automobiles,electronics,and petrochemicals industries.In 2021,these three industries accounted for 50.3

43、percent of the total output value of industrial companies above a designated size(those with an annual main business income of over RMB 20 million(US$3.1 million).Guangzhou is also home to a well-developed technology industry,and the city has the third-largest number of national high-tech enterprise

44、s,standing at over 11,000.The municipal government is striving to improve the citys high-end technology and innovation capabilities,and has launched a series of support schemes,R&D and innovation centers,and national laboratories to foster scientific and technological development.12INVESTING IN CHIN

45、AS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESFoshanPopulation:9.6 millionGDP:RMB 1.2 trillion(US$188.4 billion)(8.3%y/y growth)Import-Export:RMB 616.1 billion(US$95.5 billion)Utilized FDI:RMB 3.4 billion(US$519.9 million)Foshan is a prefecture-level city located just 25 kilometers to the

46、west of Guangzhou.It is the third largest of the mainland GBA cities,which reached RMB 1.2 trillion(US$168.2 billion)in 2021.Although somewhat overshadowed by its giant neighbor,Foshan is a significant destination for foreign investors.Utilized foreign capital in 2021 reached RMB 3.4 billion(US$519.

47、9 million),of which 39.1 percent was in manufacturing,25.8 percent in leasing and business services,16.7 percent in real estate,and 9.2 percent in scientific research and technology services.A total of 668 new foreign-invested projects were approved in 2021.The citys economy is still highly reliant

48、on manufacturing,with secondary industries accounting for almost 56 percent of the local GDP.Major traditional manufacturing industries include textiles,furniture,light industry,food and beverage,and home appliances,to name a few.As in many areas of the GBA,Foshans manufacturing industry is moderniz

49、ing quickly by automating and digitizing.The city is at the forefront of the industrial robots industry,with companies such as the electronics giant Midea and property developer Country Garden investing in the technology.As such,the city is also developing its technology sector and accelerating digi

50、talization.A 2020 government implementation plan aims to promote the“digital economy”by accelerating the development of industries that support manufacturing,such as integrated circuits(ICs),5G,software and information technology services,and big data.It also aims to move manufacturing up the value

51、chain by focusing on higher-end products such as electronic components and modules,ultra-high-definition displays,biopharmaceuticals and medical equipment,intelligent equipment and robots,and automotive electronics,while fostering emerging technologies,such as artificial intelligence,virtual reality

52、,and network security.A relatively mature segment of the tertiary sector is financial services,which is concentrated in the Guangdong Financial High-Tech Zone in Nanhai district.Hailed as the only back-office service base in Guangdong Province,this zone has attracted 864 projects and employed over 6

53、0,000 white collar workers as of mid-2020.Up until this period,total investment had reached RMB 123.9 billion(US$19.1 billion),up from RMB 51.8 billion(US$8.2 billion)in 2015.13INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESDongguanPopulation:10.5 millionGDP:RMB 1.09 trilli

54、on(US$168.2 billion)(8.2%y/y growth)Import-Export:RMB 1.5 trillion(US$236.3 billion)Utilized FDI:RMB 9.5 billion(US$1.5 billion)Situated in the strategic position between Shenzhen and Guangzhou,the prefecture-level city of Dongguan benefits from a spillover effect from the two largest megacities in

55、the GBA.Its prominent location makes it a fast commute from the surrounding cities,and two of the GBAs busiest airports-Guangzhou Baiyun International Airport and Shenzhen Baoan International Airport-are just an hour away.Dongguan is the fourth-largest mainland city in the GBA by GDP,reaching RMB 1.

56、09 trillion(US$168.2 billion)in 2021.The city has historically been a manufacturing powerhouse and core driver of the regions economic development over the last four decades.To this day,manufacturing is still the most important industry,accounting for 58.2 percent of GDP in 2021.More specifically,th

57、e city is a leader in export-oriented manufacturing.It is the second-largest exporter in the GBA,second only to Shenzhen,with total exports reaching RMB 956 billion(US$132.3 billion)in 2021.Mechanical and electrical products alone accounted for 70.6 percent of all exports in 2021,while high-tech pro

58、ducts(which overlap with the mechanical and electrical product figure)accounted for 37.2 percent of total exports.Major Chinese smartphone makers,including Huawei,Vivo,and Oppo,have also moved into Dongguan in recent years,and the city produced one-quarter of the worlds smartphones shipments in 2019

59、.Unsurprisingly,this industry was also the main target for foreign investment.In 2021,actual use of foreign capital reached RMB 9.5 billion(US$1.3 billion),of which RMB 5.1 billion(US$790 million)-53.9 percent-was in manufacturing.Over 10,000 FIEs have set up base in the city.Dongguan is now also fo

60、stering 10“strategic emerging industries”:next-generation information technology,AI,intelligent terminals,industrial robots,high-end intelligent manufacturing equipment,advanced materials,new energy vehicles,high-performance batteries,biomedicine,and high-end medical equipment.The citys science and

61、technology capabilities are also developing quickly.Its R&D expenditure accounted for 4 percent of the regional GDP in 2021,above the national average of 2.44 percent.Moreover,the city is estimated to have 7,387 high-tech enterprises as of 2021,as well as 782 engineering technology research centers,

62、121 laboratories,and 119 business incubators.AMBER LIUSenior Manager Corporate Accounting ServicesShenzhen OfficeDezan Shira&Associates“Often known as factory to the world,Dongguan is now looking to transit into a smart manufacturing base,focused on high-tech robotics and automated equipment.”14INVE

63、STING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESZhaoqingPopulation:4.13 millionGDP:RMB 265 billion(US$41 billion)(10.5%y/y growth)Import-Export:RMB 40.5 billion(US$6.3 billion)Utilized FDI:RMB 810 million(US$125.6 million)The prefecture-level city of Zhaoqing,located to the west

64、 of Foshan and Jiangmen,has the largest land area of all of the 11 GBA cities at 14,891 square kilometers.Despite the relatively modest size of its economy,which reached RMB 265 billion(US$41 billion)in 2021,it is nonetheless an important city in the GBA rich,with an abundance of natural resources a

65、nd very well-developed transportation network.It is also home to one of the most important inland ports in China,the Zhaoqing New Port.Utilized FDI into the city reached RMB 810 million(US$125.6 million)in 2021,growing 39 percent year-on-year.Sometimes called the“Home of Gold”due to its numerous gol

66、d mines,the city still has expansive mining industry.Key mining resources including limestone for cement and flux,gypsum,granite for overcoating and for construction,porcelain clay,ink-stone,mineral water,and geothermal water.Manufacturing remains the largest industry sector,accounting for 56.3 perc

67、ent of the local GDP in 2021.Traditional manufacturing industries include home appliances,building materials,food and beverage,furniture,metal products,and textiles.It has now also begun to move up the value chain with a focus on high-end and high-tech products,such as biopharmaceuticals,high-end el

68、ectronics,advanced machinery,new materials,and petrochemicals.HuizhouPopulation:6.07 millionGDP:RMB 497.7 billion(US$77.1 billion)(10.1%y/y growth)Import-Export:RMB 305.5 billion(US$47.4 billion)Utilized FDI:RMB 7.4 billion(US$1.15 billion)Known as the“Eastern Gate of Guangdong”,Huizhou marks the ea

69、sternmost reach of the GBA and shares a land border with Guangzhou,Dongguan,and Shenzhen.It has the second largest area among the mainland GBA cities,after Zhaoqing.The city is well-known for its scenic environment and abundant natural resources.15INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LO

70、NG-TERM OPPORTUNITIESThe citys GDP reached RMB 497.7 billion(US$77.1 billion)in 2021,growing 10.1 percent year-on-year.Utilized FDI in 2021 reached RMB 7.4 billion(US$1.15 billion),up 33.6 percent year-on-year.There were a total of 8,597 FIEs in the city at the end of 2021,of which 508 were Sino-for

71、eign joint ventures,4,601 were wholly foreign-owned enterprises,and 1,183 were branches of FIEs.Manufacturing is the largest industry sector in the city,accounting for 53.3 percent of the local GDP in 2021,followed by services,which accounted for 42 percent.The two major industries are petrochemical

72、s and electronic information,which record production values of up to RMB 1 trillion(US$140 billion).Huizhous Daya Bay Petrochemical Zone ranks the first in the country in terms of scale of petrochemical-refining integration.Meanwhile,Huizhous Zhongkai High-Tech Industrial Development Zone is an impo

73、rtant national base for the electronic information industry.ZhongshanPopulation:4.47 millionGDP:RMB 356.6 billion(US$55.2 billion)(8.2%y/y growth)Import-Export:RMB 269.5 billion(US$41.7 billion)Utilized FDI:RMB 3.8 billion(US$585 million)Zhongshan sits at the center of the GBA,a region straddling th

74、e Pearl River Delta(PRD).The city is transforming itself into a transport hub for the region,leveraging its central geographical location within the GBA and close links to Hong Kong and Macao.To further capitalize on its strategic position,Zhongshan has begun construction on several major transport

75、infrastructure projects in the area.These include the Shenzhen-Zhongshan Bridge,also called the Shenzhong Link.Expected to open to traffic in 2024,the Shenzhong Link will connect Zhongshan with Shenzhen on the eastern banks of the PRD through a 24-kilometer sea crossing,significantly shortening trav

76、el between the two cities.Zhongshan serves as a base for advanced manufacturing and modern service industries,with industrial clusters focused on sectors such as equipment manufacturing,household appliances,textiles and garments,electronics,lighting,healthcare and pharmaceuticals,furniture,and small

77、 home appliances and hardware products,as well as emerging industries such as modern services and yachts.Zhongshan also aims to grow its manufacturing capabilities and become a forerunner in advanced manufacturing in the country.The subdistrict of Guzhen already hosts some of the finest lighting com

78、panies in the world,earning it the nickname Chinas lighting capital.EMMA TONGManager Corporate Accounting ServicesZhongshan OfficeDezan Shira&Associates“With several major infrastructure projects underway and a host of incentive policies in place,Zhongshan is set to become a strategic hyper-connecte

79、d investment base.”16INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESJiangmenPopulation:870,000GDP:RMB 360.1 billion(US$55.8 billion)(8.4%y/y growth)Import-Export:RMB 179 billion(US$27.7 billion)Utilized FDI:RMB 2.3 billion(US$356.2 million)Jiangmen is located to the west of

80、 Foshan,Zhuhai,and Zhongshan and serves as one of two western gates to the region.It has eight expressways connecting it to other cities and has been integrated into the GBAs“one-hour economic circle”.It has two class-one cargo ports Xinhui port and Taishan Guanghai port.The citys GDP reached RMB 36

81、0.1 billion(US$55.8 billion)in 2021,of which 45.6 percent came from manufacturing and 46.2 percent came from services.Actual use of foreign capital reachedRMB 2.3 billion(US$356.2 million)that year,of which RMB 1.2 billion(US$186 million)went to manufacturing,RMB 397 million(US$61.5 million)wholesal

82、e and retail,and RMB 328 million(US$50.8 million)went to information transmission,software,and information technology services.While Jiangmen currently lags somewhat behind its neighbors in terms of overall production,it has developed an advanced industry for motorcycles and auto parts manufacturing

83、,textiles and garments,papermaking,shipbuilding,food,packaging materials,bathroom accessories and sanitary hardware,printing,and electromechanics.It is also a key source for agricultural products and by-products for the GBA and has established Guangdongs the first agricultural cooperation pilot zone

84、 with Taiwan.Jiangmen has been rapidly developing its new energy,new lighting,new materials,high-end equipment manufacturing,and green household appliances industries.ZhuhaiPopulation:2.47 millionGDP:RMB 388.2 billion(US$60.2 billion)(6.9%y/y growth)Import-Export:RMB 332 billion(US$51.5 billion)Util

85、ized FDI:RMB 2.9 billion(US$449 million)Zhuhai is located on southwestern banks of the Pearl River estuary and shares land borders with Zhongshan to the north and Macao to the south.It is also directly connected to Hong Kong through the 55-kilometer Hong Kong-Zhuhai-Macao bridge and tunnel system.It

86、s proximity to Macao and seaside location makes it a popular destination for domestic tourists.17INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESZhuhais GDP reached RMB 388.2 billion(US$60.2 billion)in 2021,of which 41.9 percent was from manufacturing and 56.7 percent from s

87、ervices.Actual use of FDI reached RMB 2.9 billion(US$449 million)in 2021,of which 52.8 percent originated from Macao and 43.8 percent from Hong Kong.A total of 2,578 new FIEs were established that year.Major industries include electronics,home appliances,electricity and energy,biopharmaceuticals and

88、 medical devices,petrochemicals,and precision machinery.Its special industries include printing supplies and yacht manufacturing.The city has been deepening integration with Macao through a series of industry and talent programs that facilitate commutes across the border,in particular in the Hengqin

89、 New Area.The city is considered a very well-developed city with a“first-class living environment”.It is now striving to improve ecological conservation and the coastal tourism industry,which will help to expand Macaos role as a regional leisure hub.MacaoPopulation:680,000GDP:MOP 239.4 billion(US$29

90、.9 billion)(18%y/y growth)Import-Export:MOP 166.2 billion(US$20.8 billion)Utilized FDI:MOP 300.2 billion(US$37.5 billion)(2020)The Special Administrative Region of Macao is located on the western side of the Pearl River estuary and borders the Hengqin New Area of Zhuhai to the north.It is only 60 ki

91、lometers across the sea from Hong Kong,which is accessible via the Hong Kong-Zhuhai-Macao bridge and tunnel network.Macao is known predominantly for its illustrious gaming industry,which still accounts for the lions share of the local economy.In 2019,prior to the pandemic,the gaming industry made up

92、 50.9 percent of the local GDP.The service industry as a whole accounts for over 95 percent of GDP,driven largely by gaming and tourism,as well as complementary industries,such as hospitality,catering,and transport.The citys GDP recovered significantly in 2021,growing 18 percent year-on-year to reac

93、h MOP 239.4 billion(US$29.9 billion).Due to its open economic policy,Macaos tax rate is one of the lowest in the region.The city enjoys unlimited foreign exchange and claims its own customs territory.Macao is now striving to diversify its economy away from gambling,which will partly be achieved by d

94、eepening integration with neighboring Zhuhai and the wider GBA.A series of talent programs to incentivize the movement of people across the border to work in strategic and emerging industries have been rolled out in recent years.It also launched the Macao Young Entrepreneur Incubation Center in 2018

95、 to aid its young workforce to take advantage of new favorable hiring policies in the GBA.18INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESHong KongPopulation:7.5 millionGDP:US$367.9 billion(6.4%y/y growth)Import-Export:US$1.31 trillionUtilized FDI:US$140.7 billionThe Speci

96、al Administrative Region of Hong Kong needs little introduction.Known as the financial center of China and the broader Asia-Pacific(APAC)region,the city has long been a magnet for foreign investors,who are attracted to its free-market economy characterized by minimal government intervention,low taxa

97、tion,a free port trade,and a highly internationalized and modernized financial market.Its service-oriented economy(with services accounting for more than 90 percent of its GDP)is especially strong in the financial services,international trade,and tourism sectors.Sharing a land border with Shenzhen t

98、o the north,it also has strong economic links to mainland China,as well as other major economies in the APAC region.Hong Kong is the largest and most important global offshore RMB business hub,offering a wide range of RMB financial services,including clearing and settlement,financing,asset managemen

99、t,and risk management,among others.It is also a major trade hub,with total foreign trade reaching US$1.31 trillion in value in 2021.Hong Kong has a diverse talent pool and is home to 22 degree-awarding higher education institutions.Seeking to attract more international talent,the city has recently l

100、aunched a two-year visa scheme for graduates from top universities around the world.JENNIFER LUDirector Corporate Accounting ServicesHong Kong OfficeDezan Shira&Associates“With Hong Kong reopening,comparatively strong economic rebound can be expected in 2023.”To know more about the economies,industr

101、ies,and investment policies of the GBA member cities,please visit the Doing Business in China Portal,Where to Invest section.WHERE TO INVESTEXPLORE DETAILSLeading Industries of the GBA320INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESManufacturingOne of the GBAs most import

102、ant industries is automotive manufacturing.Despite the increase in the services sector as a proportion of GDP,manufacturing remains a mainstay industry in all nine mainland cities of the GBA.Major fields within the manufacturing industry are mechanical and electrical equipment,including home applian

103、ces,automatic data processing equipment and components,automotives and automotive components,high-end machinery,and integrated circuits,to name a few.Traditional light industries and the production of labor-intensive goods,such as toys,garments,shoes,and furniture,also remain important sectors.The s

104、maller GBA cities,such as Dongguan,Foshan,Zhongshan,Jiangmen,and Huizhou,also have strong manufacturing bases with focuses on various fields.Foshan,for instance,is home to over 3,000 electrical appliance factories,of which about half are foreign-owned,and produced about 20 percent of the output of C

105、hinas electrical appliance industry in 2020,while Jiangmen has large auto part,textiles,paper,and shipbuilding industries.TechnologyThe GBA is home to some of Chinas most innovative and successful technology companies,many of which are at the cutting edge of their respective fields.The center of the

106、 technology industry in the region is Shenzhen,often dubbed the Silicon Valley of China.The city has fostered some of Chinas most famous technology giants,such as Tencent,Huawei,and DJI,to name a few.Local governments in the GBA actively encourage the development of innovative technology companies b

107、y providing preferential tax and in certain development zones,as well as incentives to attract tech talent to the region and to foster the establishment of start-ups.FinanceThe GBA is home to a thriving financial industry,which today expands far beyond the financial hub of Hong Kong.The financial se

108、rvices industry in the nine mainland cities has grown significantly over the last couple of decades,and in 2021,the added value of Guangdongs financial industry exceeded RMB 1 trillion(US$143.8 billion)for the first time.The region also acts as a test bed for the further opening of the financial ind

109、ustry to outside investors and for the internationalization of the RMB.The China-Hong Kong stock connect program was extended to incorporate the Shenzhen Stock Exchange in 2016,enabling investors from the mainland to buy shares from companies listed in Hong Kong and providing streamlined access for

110、Hong Kong and international investors to invest in Chinese A-shares listed on the mainland.GUILHERME CAMPOSManager International Business Advisory South China and Hong Kong OfficeDezan Shira&Associates“Manufacturing remains a mainstay industry in all nine mainland cities of the GBA,despite the incre

111、ased contribution of the service sector.”21INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESIn October 2021,the GBA launched the Wealth Management Connect,the first two-way investment mechanism for individual investors in the region.Under the scheme,mainland residents of the

112、nine Guangdong cities in the GBA are allowed to invest in certain products sold by banks in Hong Kong and Macao via the“southbound link”.Meanwhile,Hong Kong and Macao residents can invest in eligible products distributed by mainland banks in the GBA via the“northbound link”.HealthcareChinas healthca

113、re market is one of the most attractive in the world for foreign investors,driven by factors including extended life expectancy,an aging population,as well as economic growth.While higher healthcare spending was already expected as a long-term trend,the coronavirus may inspire structural upgrades an

114、d reforms to Chinas healthcare system.Chinas healthcare sector is projected to be worth RMB 16 trillion(US$2.3 trillion)by 2030.The GBA,home to a large number of quality educational resources,rich scientific research achievements,a huge consumer market,and sound industrial resources,has natural adva

115、ntages to grow its healthcare sector.In particular,the GBA is a major hub for the pharmaceutical and medical device industry.It enjoys distinct industrial agglomeration advantages and a complete upstream and downstream industrial chain.In 2019,the total output of the GBAs medical device industry rea

116、ched RMB 125.48 billion,accounting for 16.67 percent of the national total,ranking first in China.The GBA has also witnessed rapid development in the field of biological drugs.Well-known leading enterprises,such as Astrazeneca,Lonza,Beigene,Biaotai,and Kangfang,have made investmentsin the area.Moreo

117、ver,the integral links between Hong Kong and mainland parts of the GBA mean that Hong Kong can expand its healthcare institutions to the GBA,or act as a conduit in introducing overseas medical resources into the area.In 2021,the Hong Kong government proposed that Hong Kong could lead the development

118、 of a health technology hub to leverage the market potential of the GBA.In her 2021 policy address,the previous Hong Kong Chief Executive Carrie Lam announced the establishment of the InnoLife Healthtech Hub at the Hong Kong-Shenzhen Innovation and Technology Park.This hub will focus on healthcare r

119、esearch and complement existing research and development(R&D)investments and facilities.To better understand the investment opportunities in the leading industries of the GBA,please visit our Doing Business in China Portal,Sector Insights section.SECTOR INSIGHTSEXPLORE DETAILS22INVESTING IN CHINAS G

120、REATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESTax Incentives and Government Subsidies in the GBA423INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIES4There are a range of preferential tax and investment policies available to foreign investors in the GBA,including both re

121、gion-wide policies and local incentives.Preferential IIT policiesTo attract global talent to the region,the nine mainland GBA cities have introduced preferential individual income tax(IIT)policy to lower the effective IIT rate to 15 percent.The policy is in place until 2023,during which time,the por

122、tion of the IIT that exceeds 15 percent of the taxable income paid by qualified and in-demand overseas talent will be refunded as fiscal subsidies.As there is no official nation-wide definition for“qualified”and“in-demand”overseas talent,eligibility is determined by each city in order to better meet

123、 local needs.Currently,the IIT system of the mainland China adopts a seven-level progressive rate,ranging from three percent to 45 percent,which is much higher than Hong Kongs salary tax and personal assessment,which is at a five-level progressive rate,ranging from two percent to 17 percent or a sta

124、ndard rate of 15 percent.This policy therefore seeks to lower the IIT rate and offset the difference with Hong Kong.Certain areas in the GBA have also extended this IIT policy for a longer duration and have implemented their own eligibility criteria for the foreign talent.Hengqin DistrictIn January

125、2022,the Hengqin Guangdong-Macao In-Depth Cooperation Zone released details on the implementation of a reduced IIT policy for talent in the Hengqin Cooperation Zone.Both domestic and foreign high-end talent that is in demand in the Hengqin Cooperation Zone are eligible for an IIT waiver for the port

126、ion of the tax burden on over 15 percent of their income.The policy will be implemented retroactively from January 1,2021 until December 31,2025.The in-demand talent includes skilled talent working in the tech R&D and high-end manufacturing industries,core and management roles in culture,sports,tour

127、ism,exhibitions,business,and trade,the modern financial industry,among others.NanshaChinas Ministry of Finance has recently rolled out preferential IIT policies for Hong Kong and Macao residents in order to facilitate the movement of talent across the GBA.Under the new policy,Hong Kong and Macao res

128、idents working in Nansha District,Guangzhou,are exempt from paying the portion of their IIT burden that exceeds that of Hong Kong and Macao respectively.This income includes the comprehensive income derived from Nansha(including wages and salaries,labor remuneration,authors remuneration,and royaltie

129、s),business income,and subsidized income for talents recognized by the local government.DAISY HUANGSenior ManagerCorporate Accounting ServicesGuangzhou OfficeDezan Shira&Associates“There are a range of preferential tax and investment policies available to foreign investors in the GBA,including both

130、region-wide policies and local incentives.”24INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESThe Hong Kong and Macao residents working in Nansha can receive this preferential policy when handling their annual IIT settlement.The above is applicable in the whole of Nansha Dist

131、rict and will be implemented from January 1,2022 to December 31,2026.In addition,foreign residents working in Nansha are eligible for the GBA-wide IIT subsidy which grants foreign employees subsidies for the portion of paid IIT in excess of 15 percent of the taxpayers taxable income.This subsidy is

132、applicable once a year until 2023.Preferential CIT policiesThree areas of in the mainland portion of the GBA have implemented or are planning to implement a reduced corporate income tax(CIT)rate for companies operating in“encouraged”industries.Chinas national CIT rate is 25 percent,and the reduced r

133、ate for companies in the specified areas is 15 percent.The industries eligible for the reduced CIT rates differ slightly from region to region,but typically cover technology,high-end manufacturing,and modern services and finance industries.QianhaiQualified enterprises engaged in encouraged industrie

134、s in the Shenzhen Qianhai Area can enjoy a reduced CIT rate of 15 percent from January 1,2021 to December 31,2025.Foreign-invested enterprises(FIEs)can refer to the 2021 Version of the Catalogue for Encouraged Industries Eligible for CIT Preferential Treatment to check whether they are engaged in th

135、e encouraged industries.This catalogue covers 30 sectors under five broad industry categories modern logistics,information services,technology services,cultural and creative industries,and commercial services.To be eligible for the reduced CIT rates,companies must derive at least 60 percent of their

136、 revenue from one of the industries in the catalogue.On June 2,2022,the Shenzhen Municipal Government released a guide to determining eligibility for the reduced CIT rate.HengqinQualified industrial companies located in the Hengqin Cooperation Zone can enjoy a reduced 15 percent CIT rate.To be eligi

137、ble for this policy,the company must derive at least 60 percent of its main business income from one of the industries in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin Corporate Income Tax Preferential Catalogue(2021 Edition).The catalogue includes To explore the range of tax incentives o

138、ffered in the GBA region,please visit our Doing Business in China Portal,Tax Incentives section.TAX INCENTIVESEXPLORE DETAILS25INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIES150 sectors across high-tech,science and education R&D,traditional Chinese medicine,tourism,modern s

139、ervices,finance,and more.The companies must also carry out a“substantive operation”in the area.This means that the actual management of the enterprise must be located in the Hengqin Cooperation Zone,and implements substantive and comprehensive management and control over the production and operation

140、,personnel,accounting,property,and other aspects of the company.For companies that are headquartered in the Hengqin Cooperation Zone,the 15 percent preferential CIT policy only applies to the income derived by the headquarters and any eligible subsidiaries that are also located within the zone.For c

141、ompanies that are headquartered elsewhere,the preferential CIT policy only applies to the eligible subsidiaries that are located within the zone.NanshaCompanies operating in certain industries that have“substantial operations”in one of three“initial launch areas”in Nansha district,Guangzhou,are elig

142、ible for a reduced 15 percent CIT rate on the income derived in that area.The initial launch areas are the Nansha Bay area of the Guangdong Pilot FTZ,the Qingsheng Hub Cluster,and the Nansha Hub Cluster,which together cover a total of 23 square kilometers.To be eligible for the reduced CIT rate,a co

143、mpanys main business must be in one of the industries listed in the Nansha Guangzhou Preferential Corporate Income Tax Catalogue(2022 Edition)(the“Catalogue”),and derive a minimum of 60 percent of their main business income from this industry.The total income must be calculated in accordance with Ar

144、ticle 6 of the Corporate Income Tax Law of the Peoples Republic of China.Companies must also have a“substantial operation”in one of the three initial launch areas in Nansha to be eligible.A“substantial operation”means that the actual managed entity of the company is located in one of the initial lau

145、nch areas of Nansha District,and that the company implements substantial and comprehensive management and control over production and operations,staffing,accounting,and assets.For enterprises whose head office is located in the initial launch areas of Nansha,the 15 percent CIT rate is only applicabl

146、e to the income garnered by the head office and branch offices established in the initial launch areas in Nansha that meet the above requirements.For companies with head offices located outside of Nansha,the 15 percent CIT rate is only applicable to the income derived from branch offices established

147、 in the initial launch areas in Nansha that meet the above requirements.26INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESThe Catalogue of industries eligible for the preferential CIT rate covers 140 industry categories across eight broad sectors:high-tech,information techno

148、logy,advanced manufacturing,biopharmaceuticals,new energy and new materials,shipping and logistics,modern services,and finance.The 15 percent CIT rate will be implemented retroactively from January 1,2022 to December 31,2026.VAT exemption and export tax rebatesOn October 26,2020,the Ministry of Fina

149、nce,State Tax Administration,and General Administration of Customs jointly released a notice stating that from October 1,2020 to December 31,2023,income of insurance premium for international shipping derived by insurance enterprises registered in Guangzhou from enterprises registered in Nansha Area

150、 of Guangdong FTZ will be exempt from VAT.From October 1,2020,containerized cargos to be shipped abroad from the designated 37 ports of shipment and passing through Nansha Bonded Port of Guangzhou and Qianhai Bonded Port of Shenzhen(the place of departure)by qualifying export enterprises with qualif

151、ying transportation enterprises as the carriers,will be eligible for the export tax rebate policy at the port of the shipment.Previously,the export tax rebates could only be paid after the goods had been transported to the place of departure(usually a seaport or hub port,such as Nansha or Qianhai bo

152、nded port)and the customs clearance procedures were completed.Now with the introduction of the export tax rate policy at the port of shipment,qualifying export enterprises can apply to the local customs for export tax rebates once the goods are shipped out from the listed port of shipment(usually a

153、wharf,such as Foshan port,Zhaoqing,or Jiangmen port).This will shorten the tax refund cycle and accelerate the cash flow of export enterprises.Preferential policies for headquartering in the GBASeveral areas of the GBA offer incentives for multinationals to headquarter in the respective city or deve

154、lopment zone.ShenzhenFor the establishment of headquarters of companies(subject to the requirements of The Implementations Measures for Encouraging the Development of Headquarters in Shenzhen),subsidies granted may be up to RMB 20 million(US$2.7 million).For financial enterprises headquarters,subsid

155、ies may be up to RMB 10 million(US$1.4 million)and 50 percent of support for relocation costs.In the case of establishments of logistics companies,these aids may be in the amount of RMB 10 million,depending on the amount of registered capital of the company in question.To find out whether your busin

156、ess is eligible for various incentives and other supporting policies offered in the GBA,please email .PROFESSIONAL SERVICESEXPLORE DETAILS27INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESGBA vs.Hainan FTP528INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTU

157、NITIESIn 2018,the same year that the blueprint for the development of the GBA was released,Chinese policymakers decided to categorize the entire province of Hainan as a free trade zone(FTZ).In June 2020,Beijing then rolled out a master plan,laying out a series of special policies in a move to develo

158、p Hainan into a high-level free trade port(FTP).The objective of this move is to turn the Hainan FTP into an international trade port on par with the likes of Hong Kong,Singapore,Rotterdam,and Dubai by 2050.The GBA and the Hainan FTP lead Chinas renewed efforts to improve its incentive schemes,indus

159、try capacity,and infrastructure for investors,traders,and manufacturers.However,the two areas have taken slightly different paths toward achieving these development goals.The GBAs focus is on urban integration,industrial cooperation,and technology innovation.It is therefore concentrating on enabling

160、 the free flow of talent,technology,and capital,with the aim of opening opportunities in the high-tech,financial,and manufacturing industries.The Hainan FTP,meanwhile,aims to build a port area with liberalized special customs supervision,which will allow free cross-border flows of trade,investment,c

161、apital,personnel,transport,and data.To improve its smaller-scale economy and develop local industries,Hainan also released its own Negative List in July 2021 to provide broader market access for foreign investment in specific industries such as healthcare,telecommunications,tourism,and education.Nev

162、ertheless,the GBA and Hainan have both introduced similar preferential policies,such as reduced tax rates,measures to facilitate capital flows and currency exchanges,and subsidies to attract investors and talent.Comparison of Tax Incentives and Support Policies in Hainan and the GBACityGBAHainanIITU

163、ntil end 2023:15 percent for eligible overseas high-end talent.The portion of IIT of the taxable income paid the previous in excess of 15 percent is returned as fiscal subsidies upon application(applicable in the nine mainland cities).Until end 2024:15 percent for both domestic and foreign talent.Th

164、e portion of IIT of the taxable income paid the previous in excess of 15 percent is refunded during the annual IIT settlement.From 2025 to 2035:Progressive IIT rate of 3 percent,10 percent,and 15 percent for individuals that reside in Hainan at least 183 days of the year.29INVESTING IN CHINAS GREATE

165、R BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESComparison of Tax Incentives and Support Policies in Hainan and the GBACityGBAHainanCIT15 percent CIT rate for companies with a main business income from a list of encouraged industries in the Nansha,Qianhai,and Hengqin areas of the Guangdong(China)Pilo

166、t Free Trade Zone;exemption of CIT on income derived from new ODI from companies established in the Hengqin Cooperation Zone in the tourism,modern services,and high-tech industriesUntil end 2024:15 percent CIT rate for companies with substantial business operations in encouraged industries;exemption

167、 of CIT on income derived from new ODI from companies in the tourism,modern services,and high-tech industries;one-off pretax deduction or accelerated depreciation and amortization on eligible capital expenditures.From 2025 to 2035:15 percent for all companies engaged in industries not on the negativ

168、e list.HeadquartersIn Shenzhen:Rewards of between RMB 5 million(US$684,415)and RMB 50 million(US$6.8 million)each year for three consecutive years from the date a companys newly established headquarters have been registered in the city,depending on the industry,investment amount,and registered capit

169、al.In Haikou:Reward of RMB 3 million(US$410,649)for regional headquarters of a multinational.One-off bonuses for comprehensive headquarters*that commit a certain amount to local public finances within one year,including:-RMB 2 million(US$273,766)for high-growth headquarters that contribute at least

170、RMB 8 million(US$1.1 million);-RMB 3 million(US$410,649)for companies engaged in tropical agriculture that contribute at least RMB 10 million(US$1.4 million);-RMB 5 million(US$684,415)for companies in tourism and modern services that contribute at least RMB 20 million(US$2.7 million);and-RMB 10 mill

171、ion(US$1.4 million)to companies in high-tech that contribute at least RMB 30 million(US$4.1 million).One-off bonus of RMB 2 million(US$273,766)for new headquarters of international organization.One-off bonus of RMB 1 million(US$136,883)for new headquarters of international organizations that set up

172、branches in Haikou.*Headquarters with a registered capital of at least RMB 100 million(US$13.7 million)which are the only global head office exercising management and service functions for all subordinate enterprises in multiple countries or regions.30INVESTING IN CHINAS GREATER BAY AREA:TAPPING INT

173、O LONG-TERM OPPORTUNITIESIn addition to the above tax incentives,Hainan also plans to simplify its tax system so that only seven types of tax will be levied,rather than the current 18 types of tax levied across China.The Overall plan for the construction of Hainan FTP,which was released in 2020,stat

174、es that the current VAT,consumption tax,vehicle purchase tax,urban maintenance,and construction tax,education surcharges,and other taxes will be consolidated into a single sales tax for goods and services.The plan does not state when this simplified tax system will be implemented.Policies on cross-b

175、order capital flows,investment,and financingOne of the key goals of financial reform in the GBA is deepening financial cooperation between Hong Kong,Macao,and the nine mainland cities of the GBA.However,these three regions have different currencies(the Hong Kong Dollar,the Macanese Pataca,and the Ch

176、inese RMB)and are governed under three distinct administrative systems.This is a sticking point for freer cash flow within the GBA.The internationalization of the RMB is therefore a solution to this cash flow problem,which in turn will open new opportunities in banking,securities,the insurance indus

177、try,and the futures market.The Opinions Concerning Financial Support for the Establishment of the GBA,released in May 2020,also proposed the establishment of the Guangzhou Futures Exchange and the Greater Bay Area International Commercial Bank and the improvement of financial market connectivity arr

178、angements,such as the Shanghai-Hong Kong Stock Connect,Shenzhen-Hong Kong Stock Connect,and Shenzhen-Hong Kong Bond Connect.Cross-border bank accounts are also permitted in the GBA after the launch of the“Wealth Management Connect”.Meanwhile,the main focus of the Hainan FTPs financial reform policie

179、s is to serve the investment and financing needs of the local real economy.Thus,with the focus on trade and investment liberalization and facilitation,Hainan will support the development of international trading venues for energy,shipping,property rights,and equity.Hainan will also support the devel

180、opment of real estate investment trusts(REITs),the issuance of corporate credit bonds,project revenue notes(PRN),and special bonds for housing leasing,pilot the securitization of tourism assets,develop settlement centers,and assist overseas financial institutions to enter Hainan.Trade policiesCompar

181、ed with the GBA,Hainan FTP offers more preferential policies for trade.The Hainan FTP imposes zero tariff on offshore duty-free goods.Some of the other imported goods will also be exempt from import duties,import VAT,and import consumption tax before the whole island becomes a separate customs juris

182、diction,which is planned for 2025.After the whole island becomes a separate customs jurisdiction and the tax regime is streamlined,all goods except those on the Negative List of Commodities subject to Import Taxes will possibly be exempt from import duties.In addition,for enterprises engaged in enco

183、uraged sectors in Hainan FTP,their imported products can be exempted from import tariffs when entering the rest of China,provided that the imported intermediary products get added value exceeding 30 percent after processing in Hainan FTP.31INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM

184、OPPORTUNITIESFuture Development of the GBA632INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESThe future trajectory of the GBA has been drawn up in the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area(the“GBA development plan”).Released in 2019,the

185、GBA development plan provides broad short-term targets for the end of 2022 and long-term targets for the end of 2035.In addition,the 14th Five-Year Plan for National Economic and Social Development and 2035 Vision for Guangdong Province(the“14th FYP”),released in April 2021,provides further insight

186、into the future of the GBA,with a focus on innovation,infrastructure,and industry development.InnovationOne of the core tenants of the GBA development plan is to deepen integration and collaboration between the different cities to develop an“international innovation and technology hub”by sharing res

187、ources,such as capital and talent,implementing coordinated policies,collaborating on commercial application of technology,and jointly fostering emerging industries.The plan commits to accelerating the future growth of new pillar industries,including new-generation information technology,biotechnolog

188、y,high-end equipment manufacturing and new materials,and pledges to step up the protection of IP protection mechanisms.The Guangdong 14th FYP further build upon this goal by listing key tasks to create an innovation hub.These tasks include:Building science and technology research facilities,such as

189、scientific and technological infrastructure clusters,laboratories,higher learning institutes,and scientific research institutions;Building three major innovation cooperation zones:Shenzhen Park,Hengqin Guangdong-Macao In-Depth Cooperation Zone,and Guangzhou Innovation Cooperation Zone;Accelerating t

190、he construction of several laboratories,including the Pengcheng Laboratory and Guangzhou Laboratory,as well as Regenerative Medicine and Health,Advanced Manufacturing Science and Technology,Materials Science and Technology,and so on;and Accelerating the construction of the Guangdong-Hong Kong-Macao

191、GBA National Technology Innovation Center and promoting the construction of a number of national innovation centers.Transport infrastructureBuilding up the GBAs transport infrastructure and connectivity is a major driver behind the creation of the city cluster.Many of the targets for developing indu

192、stries and improving livelihoods in the region rest upon improving the transport links between the different cities,which will facilitate the movement of resources and people across the regions and thus promote more interconnectivity and integration.As such,a large part of the GBA development plan f

193、ocuses on the construction of transport infrastructure,outlining a range of measures for improving rail,air,and sea links.The measures include(but are not limited to):RELATED READINGAn Introduction to Doing Business in China 2023December 2022Doing Business in China 2023 is designed to introduce the

194、fundamentals of investing in China.Compiled by the professionals at Dezan Shira&Associates,this comprehensive guide is ideal not only for businesses looking to enter the Chinese market,but also for companies who already have a presence here and want to keep up-to-date with the most recent and releva

195、nt policy changes.AVAILABLE HERE33INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIES1.Enhancing the international competitiveness of the Pearl River Delta(PRD)port cluster by enhancing Hong Kongs status as an international maritime center,increasing the overall capacity of int

196、ernational shipping services of Guangzhou and Shenzhen,and improving the cargo distribution and transport network of inland waterways,port railway lines,and motorways;2.Developing a world-class airport cluster by strengthening Hong Kongs role as an aviation management training center,supporting the

197、construction of the Three-Runway System at the Hong Kong International Airport as well as the reconstruction and expansion of Macaos airport,carry out reconstruction and expansion works at the airports in Guangzhou,Shenzhen,and other airports,and commencing a preliminary study for the construction o

198、f a new airport in Guangzhou,among other projects;3.Improving comprehensive transport links connecting the GBA with nearby provinces and regions via eastern,western and northern Guangdong and progressively expanding and modifying busy sections of national motorways linking other parts of the country

199、;and4.Building a rapid transport network that connects the Mainland with Hong Kong and Macao and connects the east and west banks of the Pearl River Estuary and building a rapid inter-city transport network involving high-speed rail,inter-city railway links and high-grade motorways to reduce travel

200、time between major cities within the Greater Bay Area to one hour or less.Digital and information infrastructureThe continued success of the GBAs technology and digital industries over the next few decades will require a massive upscaling and upgrading of the regions digital infrastructure.As such,b

201、oth the GBA development plan and Guangdongs 14th FYP outline key tasks to improving digital and information infrastructure to ensure the regions continued success.Key tasks for improving digital information infrastructure in the GBA include expanding the bandwidth capacity of broadband internet amon

202、g Guangdong,Hong Kong and Macao,building smart city clusters,and enhancing cybersecurity protection.In July 2021,Chinas Ministry of Industry and Information Technology released the Three-year Action Plan for the Development of New Data Centers(2021 2023),which outlined key targets for the developmen

203、t of Chinas data centers and computing capacity.This includes the construction of four new data center hubs,of which one will be in the GBA.The GBA data center will not be located in one of the 11 cities,but will serve the GBA cities by routing data through the hub to a data center cluster in Guizho

204、u for processing.The construction of the GBA hub was approved in February 2022 by the National Development and Reform Commission.ManufacturingManufacturing,with its large contribution to the GBAs local regional economy,will continued to play a crucial role in the development of the various cities fo

205、r many years to come.In order 34INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESto stay competitive in the face of growing capabilities in other parts of China and Asia,the GBA is striving to upgrade the industry by employing more advanced technology,optimizing industrial la

206、yout and supply chains,and shifting to higher-value production.The GBA development plan addresses measures to enhance the industry,focusing on the growth of advanced manufacturing.Specific goals outlined in the plan include:Promoting in-depth integration of the internet,big data,and AI with the“real

207、 economy”;Developing an industrial belt for advanced equipment manufacturing on the west bank of the Pearl River spearheaded by Zhuhai and Foshan;Implementing high-end technology such as robotics and related key components,high-speed and high-precision processing equipment,and intelligent equipment;

208、Strengthening and refining industries with competitive advantages,such as equipment manufacturing,automobiles,petrochemicals,home appliances and electronic information;and Promoting the green transformation and upgrading of traditional manufacturing sectors,the development of green products,and the

209、creation of a green supply chain.FinanceOn May 14,2020,China unveiled the Opinions Concerning Financial Support for the Establishment of the GBA,which included 26 measures to support the financial reforms and opening of the GBA.The measures introduced various support mechanisms concentrating on cros

210、s-border investment and financing facilitation,financial market and financial infrastructure connectivity,and the internationalization of RMB(promoting the use of RMB currency in the GBA).The financial reform policies in the GBA aim to deepen the financial cooperation between Hong Kong,Macao,and nin

211、e mainland cities where different currencies are adopted(the Hong Kong Dollar,Macanese Pataca,and Chinas RMB)and governed under three distinct administrative systems,which becomes a sticking point for freer cash flow within the GBA.Thus,the GBAs financial reform policies open big opportunities in ba

212、nking,securities,and insurance industries and future market.The Opinions proposed to establish the Guangzhou Futures Exchange and the Greater Bay Area International Commercial Bank,as well as optimize the improvement of financial market connectivity arrangements,such as the Shanghai-Hong Kong Stock

213、Connect,Shenzhen-Hong Kong Stock Connect,and Shenzhen-Hong Kong Bond Connect.Cross-border bank accounts are also permitted in the GBA after the launch of the Wealth Management Connect.DONFIL HUANGManager Business Advisory ServicesGuangzhou OfficeDezan Shira&Associates“Businesses that tailor their st

214、rategy to the GBAs priorities and have a better understanding of the region will be best placed to benefit from its ambitious agenda.”35INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESConclusion736INVESTING IN CHINAS GREATER BAY AREA:TAPPING INTO LONG-TERM OPPORTUNITIESThe G

215、BA is one of Chinas most investor-friendly areas with a long history of foreign engagement.Its dynamic and comprehensive industry landscape offers an attractive base for companies seeking to streamline production and supply chains.The GBAs allure comes not only from its mature industries,but also fr

216、om its wide and varied talent pool.The areas ability to attract highly skilled talent will only continue to improve as the transport infrastructure enables rapid commutes between cities and local talent policies support the recruitment and relocation of employees across the region.The GBA is continu

217、ing to deepen integration between the different regions that constitute it,presenting new opportunities for foreign investors.Local jurisdictions continue to roll out incentive policies for the development of encouraged industries both in traditionally strong and niche,R&D focused areas.Consequently

218、,the GBA provides an ideal destination for companies seeking to contribute to the development of key industries in particular high-tech industries and create new and innovative products and services.Moreover,the large and wealthy local consumer base offers an attractive point of entry to the China m

219、arket in and of itself.This is not to say the GBA faces no challenges.Recurring COVID-19 control measures have taken a toll on economic outlook and business confidence.Chinas growth momentum has also been dampened by other domestic and international headwinds,such as the Russia-Ukraine conflict,high

220、 inflation rates in Europe and the US,as well rising geopolitical tensions among major economies.Nevertheless,analysts are still bullish about the regions future.The GDP of the GBA is projected to reach US$5.8 trillion by 2040.This would be equivalent to around 2.3 percent of world GDP slightly exce

221、eding the GDP of France.Within the APAC region,the GBA will have an even larger economic footprint,with its GDP projected to account for 5.5 percent of total APAC GDP by 2040.Dezan Shira&Associates has been present in the region since 1992.In the past 30 years,we have been closely following the poli

222、cy and regulatory development towards foreign investment and have assisted thousands of international clients.We will continue to serve and support them in the years to come.For professional assistance on location selection,business establishment,tax and accounting,IT,and compliance in the GBA,pleas

223、e email .PROFESSIONAL SERVICESEXPLORE DETAILSScan this QR codeVisit our mobile page andget the latest updates investors news and resources with usOur Offices in ChinaBDDGNHSQSZSTAccounting|Audit and Financial Review|Business Advisory|Business IntelligenceCorporate Establishment and Governance|Due Di

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