Aug 07, 2019 (China Knowledge) - China's State Council, the Cabinet, has issued a new development blueprint for the new Lingang area of the six-year-old Shanghai Free Trade Zone (FTZ). Shanghai is to set up a special development fund to inject at least USD 14.2 bln for the new area over the next five years.
The new Lingang area will match the standard of the most competitive FTZs around the world and implement opening-up policies set to attain global market competitiveness. The new area is already the chosen location for many leading enterprises both local and abroad, including carmaker SAIC Motor, Shanghai Electric (601727), Siemens AG (SIEGY) and General Electric (GE). The U.S auto carmaker and energy company Tesla (TSLA) has built the firm's first overseas electric-car factory in the area.
Last November, Chinses President Xi Jinping proposed the idea of expanding the Shanghai FTZ at the China International Import Expo in Shanghai. The new Lingang area, located on the southeast coast of Shanghai, is designed to be a “special economic function zone” with greater authority over autonomous development, reform, and innovation.
More open and favorable policies on financial support, talent attraction, land planning and housing will be granted to the new area. For instance, China’s State council’s Financial Stability Commission released new rules on opening up the financial sector two weeks ago. Such measures will be first carried out in the new Lingang area.
Moreover, companies in core industries including integrated circuits, biomedicine, artificial intelligence, and civil aviation will be able to enjoy a 15% income tax rate for the first five years, 5% lower than the standard rate.
The site of the new section boasts excellent connectivity as it connects to Yangshan Deep-Water Port, Pudong International Airport, railways, highways, rail transit, and high-grade inland waterways.
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