Creating International Business Environment · 2015-05-18 · Creating International Business...

Creating International Business EnvironmentShunde, Foshan

2014

The Chinese version was prepared by PricewaterhouseCoopers.

This version was translated and prepared by Shunde Economy, Science and Technology Promotion Bureau.

Key Factors Analysis Report for Fast Moving Consumer Goods Manufacturers on Site Selection

Shunde Economy, Science and Technology Promotion Bureau (“SDESP”) has assigned PricewaterhouseCoopers Consultants (Shenzhen) limited, Guangzhou Branch (“PwC”) to assist in evaluating the key costs and other factors influencing the investment environment of Shunde District of Foshan City for fast moving consumer goods (“FMCG”)manufacturers.

The report herein aims to describe the status quo of the key costs and other factors influencing FMCG manufacturers in the investment environment of Shunde, to provide necessary information for decision making of the potential investors, especially for FMCG manufacturing business investors.

Referring to information such as public data and public reports of the world-renowned FMCG companies, also referring to indicators in the investment environment reports from the relevant departments of various cities, combined with the characteristics of Shunde business environment, PwC has selected the following key costs and other factors influencing the FMCG companies from Shunde investment environment, to evaluate Shunde investment environment for FMCG companies, such as food and household-and-personal care companies.

• Location, Transportation and Logistics

• Human Resources

• Land Resources

• Similar Manufacturers and Supporting Industries

• Other Infrastructure

• Commercial Facilities

• Climate Condition

• Preferential Policies from Government

We have organized field research and analysis on extensive objective data to evaluate the indicators stated above. Meanwhile, to enable investors to understand the characteristics of these factors, we have also compared a number of typical South China cities on labour cost and supply, geographic location, transportation and logistics, the cost of land resources, water and electricity fees, etc. Comparable cities include Guangzhou, Shenzhen, Dongguan and Jiangmen. All relevant information about these cities, such as Statistical Yearbook or Statistical Bulletin, has been obtained from the respective government websites.

Shunde is full of investment and business opportunities, with locational advantages for manufacturing enterprises and consummate infrastructure and facilities for food, household and personal care and other FMCG companies:

• Excellent location and convenient transportation: close to Guangzhou, Shenzhen, Hong Kong, Macao and other important consuming cities in the Pearl River Delta (“PRD”); transportation facilities are completed, with four major ports and eight highways criss-crossing the city into the 2-hour traffic circle of all PRD cities, HK and Macao, providing quick and low-cost access from FMCG companies to their consumers.

• Strong competitive labour cost: steady supply of labour from outside cities satisfies the needs of labour-intensive enterprises; ten universities in neighbor cities and local training schools provide high-quality personnel; reasonable age structure, increasing schooling years as well as comprehensive training mechanisms guarantee the quality of workers; labour supply and demand are steady; wages are reasonable and wage growth rate ranks bottom among the comparable cities.

Preface

• Adequate and sustainable land supply: 21km2 new industrial zone provides space for new industries and relocated enterprises; three-old renovation projects revitalize land resources to promote industrial clusters and achieve sustainable development.

• Industry Clustering: high quality water helps attract 151 food companies gathered in Foshan city; logistics, warehousing, packaging and other supporting industries have gathered together, creating an industrial clustering effect, reducing collaboration costs.

• Adequate power and water supply: Shunde has one 500kV substation, six 200kV substations and investment on power grid construction is increased year by year to create a safe, reliable and high-supply grid system. Integrated supply and real-time water quality monitoring ensure safe and stable water supply.

• Quality business support of international standards: high-quality living environment, ranked fifth in Guangdong Province; well-assorted star hotels and leisure facilities; international dining choices, inclusive culture attracts a large number of expatriates, assuring the stability of corporate expatriates, while providing the necessary facility for business meetings and entertainment.

• Stable climate condition: comfortable weather, rare natural disasters; well-equipped prevention and emergency response system effectively against the formation and influence of disasters, ensuring stable and safe production and operation of companies.

• Full range of policy support: Shunde government offers a series of supporting policies in assisting companies to go listed, assisting backbone enterprises to grow bigger and stronger, to develop a headquarters economy, and to facilitate international market access, personnel training, technological innovation, etc.

Shunde has been listed among “Four Tigers in Guangdong”, ranked No.1 of “China Top 100 Districts 2013” and other awards. The excellent investment environment has attracted many foreign-invested enterprises to settle in Shunde. But the remarkable city has never stopped its pace of reform. Adhering to the strategy “to lead transformation and development by city upgrading, to build and share a happy Shunde”, it continues to promote the construction of infrastructure, optimize its administrative environment and strive to create an international business environment.

Creating international business environment│Shunde│Foshan 1

Unless otherwise specified, all the information in the report is compiled on or before June 30, 2014. The report does not incorporate the effects, if any, of events and circumstances which may have occurred or information which may have come to light subsequent to this date. Unless specifically mentioned in the report, all information is provided by Shunde Economy, Science and Technology Promotion Bureau (“SDESP”). PricewaterhouseCoopers (“PwC”) assumes no responsibility for the accuracy of the data provided by SDESP or any other party. This report was prepared for the benefit of SDESP and PwC assumes no duty of care or responsibility to the readers of the report. Potential investors are advised to consult SDESP or their professional advisors before making any investment decisions. Furthermore, all photographs contained in this report are authorised for use by SDESP or from PwC.

PwC understands that SDESP will use this English translated version of the report as an investment guidance brochure for third party’s reference. In this regard, PwC, its partners, employees and or agents, neither owe nor accept any duty or any responsibility to any other party, whether in contract or in tort (including without limitation, negligence or breach of statutory duty) however arising, and shall not be liable in respect of any loss, damage or expense of whatever nature which is caused to any other party.

The English translated version of the report is for reference only. The Chinese version of the report prevails in case there is any discrepancy.

2 Creating international business environment│Shunde│Foshan


Contents

Preface 1

1. Overview of Shunde 4

2. Overview on Key Costs and Other Factors for FMCG Companies on Site Selection 5

3. Location, Transportation and Logistics 7

4. Human Resources 14

5. Land Resources 19

6. Similar Manufacturers and Supporting Industries 21

7. Other Infrastructure 24

8. Commercial Facilities 26

9. Climate Condition 27

10. Preferential Policies from Government 28

Appendix: Road Transportation Calculation 29


1. Overview of Shunde

Shunde is one of the five administrative districts of Foshan City. Located in the hinterland of the Pearl River Delta, it is adjacent to Guangzhou, Shenzhen, Hong Kong, Macao and many other cities in the PRD.

Shunde is located in the Guangzhou-Foshan pan-city and in the south of Guang-Fo-Zhao economic circle, an important linkage area of Foshan and Guangzhou. It was included in the “Four Tigers in Guangdong” and No.1 of China Top 100 Counties during 2000-2003 for four consecutive years and No.1 of China Top 100 Districts during 2012-2013.

Shunde’s Honours and Awards:• Shunde ranked No.1 of “China Top 100 County-level Cities of Strong Economy”

for four consecutive years during 2000—2003①.

• First county-level city in China with GDP exceeding RMB100 billion in 2006.

• No.1 of China Top 100 Districts 2012-2013 for two consecutive years; awarded the Sample City of China’s Top 10 Overall Well-off Counties; No.2 of China Small and Medium Cities with Best Investment Potential②;

• Foshan ranked as the 13th Most Dynamic City in the World, Shunde is located in Foshan ③.

• Foshan also ranked 8th in the Most Competitive Cities in China 2013④.

Note: ①“Top 100 Counties (Cities)”are measured, evaluated and announced by National Bureau of Statistics of China, based on comprehensive economic and social development indicators. ②“China’s Top 100 Districts of Comprehensive Competitiveness” are appraised by the China Society of Urban Economy, and announced in the annual “Green Paper on Small and Medium cities”. ③“Most Dynamic Cities in the World” are appraised and announced by Foreign Policy magazine and McKinsey Global Institute. ④“Most Competitive Cities in China” are appraised and announced by the China Institute of City Competitiveness.

enterprises investing in more than 46 projects in Shunde. The intensive attraction to the investment enterprises is not only due to the superior investment environment in Shunde, but also because the business environment is on an international level, that provides an excellent platform for international cooperation and attracting advantageous regional resources.

More and more good companies gather in Shunde. The city will continue “to lead the transformation and development by city upgrading, and to build and share a happy Shunde”, committed to creating an international business environment.

Shunde covers an area of 806 km2, founded in 1452 AD, in charge of 10 towns with a population of 2.49 million.

As one of the most famous manufacturing bases in the PRD, Shunde has witnessed a rapid and healthy growth in its economy, led by the balance of three key industries, industrial clusters, domestic brands, private economy and Shunde’s entrepreneurship. In 2013, the total production value of Shunde is RMB255.7 billion. Shunde has attracted foreign investment from all over the world. At present, 2,029 foreign-invested enterprises, 97 representative offices in total are located in Shunde, including 28 of the world’s top 500


2. Overview on key costs and other factors for FMCG companies on site selection

FMCG companies: The high frequency of consumption and market oriented features show the importance of location and transportationFMCG companies rely on consumers’ frequent and repeated consumption to earn profit and values by expanding market scale, typical FMCG include household and personal care products, food and beverages.

With the globalization and economic development of China, more and more overseas FMCG companies enter Chinese market. Chinese enterprises also grow up quickly in light of tougher competition. According to the development tracks of P&G, Unilever, Nestlé and other famous FMCG companies after their entering the Chinese market, it is one of their most important ways to locate and build up manufacturing bases and thus extend business scale and raise profit.

“Site selection not only focuses on location, but should concentrate more on long-term benefits. It requires to distinguish unit output value, unit tax contribution and unit gross profit of different development zones, avoiding being ‘disguised’ by short-term benefits. ”

By Mr. ZengXiwen, VP of Unilever North AsiaDelivered on Industries Transfer and Development Zones Networking Seminar

Held by Foreign Investment Promotion Agency of Ministry of Commerce PRC in 2012

Transportation costs account for a big proportion of the FMCG companies, second to sales promotion costs. Therefore, when selecting a manufacturing base, FMCG companies, unlike general manufacturing enterprises, focus more on the location and transportation condition among different manufacturing costs. That is the delivering distance and cost to the consumer market.


Cost control and maximizing long-term benefitSite selection mainly considers and integrates the impact of cost, market, government and other factors. FMCG companies are market oriented and also focus on cost control. Besides of the location and transportation condition stated above, FMCG companies also emphasize on the costs of human resources, land and relative supporting industries etc.

• Labour Cost: Human Resources

• Land Cost: Land Resources

• Similar Manufacturers and Supporting Industries

Consummate infrastructure and facilities, stable and comfortable weather condition and preferential policies optimize the return on investmentIncluding the cost factors stated above, infrastructures such as water and electricity, business supporting facilities such as accommodation, catering and entertainment, climate condition and government services and supporting policies impact the steady development of the company, that’s why they also generally attach great importance to:





In conclusion, considering FMCG companies features and their general concern about location and referring to the indicators proposed in the reports of the Ministry of Commerce PRC and other departments, combined with Shunde’s investment environment, this report will evaluate Shunde’s investment environment in relation to the following indicators:

• Location, Transportation and Logistics

• Human Resources

• Land Resources

• Similar Manufacturers and Supporting industries






3. Location, Transportation and Logistics

Location• Shunde is located in the hinterland

of the PRD, adjacent to Guangzhou at the north, and close to Hong Kong and Macau in the South. Covering an area of 806 km2, Shunde consists of 10 towns and has a population of 2.49 million.

• Being an important transportation hub on the west bank of the PRD, Shunde is an essential area of the Pan PRD economic circle, with only 127 km to Hong Kong and 80 km to Macao. A convenient traffic network has criss-crossed the city into the 2-hour traffic circle of the PRD, Hong Kong and Macau.

• Shunde has easy access to key provinces and cities nearby. Guangzhou, Shenzhen, Dongguan, Foshan, Zhongshan, Jiangmen and Zhaoqing etc. are within 100km distance. Guangzhou, Shenzhen, Dongguan and Foshan have the largest consumer population in Guangdong province with a total population of 39 million. Cities such as Xiamen, Changsha, Nanning, Guilin, Yichun and Quanzhou in the other provinces are within 600 km distance.

FMCG companies have strict requirements on the distance from the manufacturing bases to consumer markets, and stick to fast moving the products. Therefore, location and transportation costs are essential indicators during the site selection process of FMCG companies.

CityPermanent

Residents by 2013(million)

Guangzhou 12.93

Shenzhen 10.63

Dongguan 8.32

Foshan 7.30

Zhanjiang 7.17

Maoming 6.01

Jieyang 5.99

Shantou 5.45

Huizhou 4.67

Jiangmen 5.00

Note: Population of Shantou and Huizhou in 2013 is not published; data quoted of the two cities refers to the year of 2012.

Data Source: Statistics Bureaus or Yearbook of the relevant cities

100km Covering Cities

Macau

HongKong

Foshan

Jiangmen

Kaiping

TaishanZhuhai

Zhongshan

Guangzhou

100km

Qingyuan

Dongguan

Shenzhen

Huizhou

Zhaoqing

Shunde

N


600km Covering Cities

Hunan

MacauHongKong

GuizhouJiangxi

Guangdong

Fuzhou

Ningde

Maoming

Zhaoqing

Guangzhou

QingyuanJieyang

Shantou

XiamenShaoguan Quanzhou

Nanping

Shanming

Ji’an

Nanchang

Yichun

Changsha

Xiangtan

Hengyang

Yongzhou

Huaihua

ChangdeZhangjiajie

HanningJiujiang

Tongren

Qiandongnan Miao and Dong Autonomous Prefecture

Qiannan Bouyei and Miao Autonomous Prefecture

Guilin

Liuzhou

Nanning

Haikou

Haifang

Hechi

Shanya

Hainan

Putian

Fujian

Guangxi

N

Shunde

600km


TransportationTransportation is vital to the daily operations of companies. A convenient traffic network helps reduce transportation costs of materials and products and improve the turnover. In addition, well-developed logistics and transportation help enlarge market capacity to a certain degree, and extend the geographical coverage. FMCG industry is a typical industry relying on convenient and efficient transportation to quickly move materials and goods and to reduce the storage cost.

Waterways, highways, railways, pipelines and airlines transportation are frequently used in daily operations, while waterways and highways are the privileged options due to their advantage. In 2013, the turnover of cargos via waterways and highways accounted for 83% of the total cargo turnover of China. Consequently, infrastructure such as completed highway network and cargo ports plays an important role in manufacturing site selection.

2013 Cargo Turnover Ratio of Transport Means in China

Data Source: National Bureau of Statistics

46.5% 36% 17.5%Water transportation

Road transportation

Others

Water Transporta-

tion

Low Cost

Large Quantity

Road Transporta-

tion

Flexible In Time And

Destination

Fast


Ports In &Around Shunde

Port Type Shoreline (m)

Berths Berth Capability (ton)

2013 Annual Throughput

Leliu Port River Port 600 9 1,000 3,500,000 tons

Shunde Port(Rongqi) River Port 636 9 1,000-2,000 3,000,000 tons (800,000 TEUs)

Shunde New Port (under construction)

River Port 438 4 3,000-5,000 2,200,000 tons

Beijiao Port River Port 405 10 1,000 2,000,000 tons (400,000 TEUs)

Shunde Passengers Port (to HK)

Port of Passengers

2 Ferry 10 shuttle ferries every day

Nansha Port Deep-water Port

3,500 13 100,000 10,230,000 TEUs

Huangpu Port Deep-water Port

5,000 20 5,000-20,000 about 300,000,000 tons

Yantian Port Deep-water Port

18 Over 100,000 10,790,000 TEUs

Hong Kong International Terminals

Deep-water Port

5,067 12 22,290,000 TEUs

1. Source: Foshan E-ports2. Source: 5th Anniversary Special Report, Shunde Public Business Management Bureau3. Source: China Waterway Website

Water Transportation of Shunde

Well-developed water-way transportation is a significant facility for export and overseas markets access. The total import-export value of Shunde in 2013 reached 24.3 billion USD, an increase of 10.5%.

Water Transportation of Shunde

• Shunde enjoys natural water transportation conditions with most territory formed into an alluvial plain at the delta of the Pearl River, 16 main rivers weave a total length of 756km.

• At present, 3 cargo ports are running in Shunde, namely, Rongqi Port, Beijiao Port and Leliu Port. The three ports have favourable locations and are in good condition, close to commercial cities such as HongKong, Guangzhou, Foshan, Dongguan and Zhuhai etc. Container ships and bulk cargo ships commute between Shunde and Hong Kong every day, as well as import-export direct barges between Shenzhen and Shunde. River barges shuttle regularly to Shanghai, Tianjin and Dalian Ports every week.

In addition, Shunde Passenger Port provides 10 shuttle ferries to and from Hong Kong every day.1

• Shunde New Port locates in Xingtan town, at the division of Xijiang River main stream. It is an essential part of Foshan Port. Shunde New Port is designed to equip four 3000-ton general berths mainly for general cargo ships and some container ships with an annual throughput of 2,200,000 tons, in which 1,400,000 tons are general cargos and 90,000 TEUs, with a shoreline of 438 meters.2

Shunde New Port plans to launch domestic trade in 2014 and international trade in the middle of 2015. All construction will be finished within 2 years to build up a green and beautiful port with facilities mainly using electric energy rather than oil.3

• As adjacent to Guangzhou, Shunde shares the deep-water ports resources with Guangzhou, and it takes 30mins to Nansha Port and 60mins to Huangpu Port of Guangzhou.


0 50 100 150 200 250

Jiangmen

Dongguan

Shenzhen

Guangzhou

Shunde

Road Density of PRD Cities (Unit: km/100km2)

Road Network

• In recent years, Shunde invested over RMB20 billion on traffic construction. 8 highways traverse Shunde. The road density of Shunde is 223km/100km2, higher than the provincial level of 109.6km/100km2; Highway density in Shunde is 11.7km/100km2, higher than the provincial level of 3.1km/100km2. A 30:15 network has been formed, i.e. 30mins to each town, and 15mins to highway entrance.4

• In 2014, Guangdong Province starts constructing 9 highways with a total length of 1270km, including Foshan-Jiangmen Highway Shunde section. The construction spreads 13 cities and Shunde district.5

• In 2013, the total freight volume of Shunde road transportation reached 79.65 million tons, an increase of 11.2%; the turnover reached 6.301 billion ton km by growing 16.4%.

Freight Volume of Road Transportation of Shunde in 2013

Item Unit Amount Increase

Volume million tons 79.650 11.2%

Turnover billion tonkm 6.301 16.4%

4. Source: InvestShunde Bureau5. Source: Guangdong Highways Construction Office

Shunde Road Transportation

The road density of Shunde ranked No.1 among all the cities of the Pearl Delta River. An all-around and high density road network promises smooth logistics for enterprises.

Shunde Road Network

60 km to GZ International Airport

100km to Zhaoqing To GZ South Railway

Station

85km to Shenzhen

127km To Hong Kong

65km to Zhuhai80km to Macau

To S81 GZ Ring

To S81 GZ Ring

To Jin Shan Da Dao

Connect GZ South Railway Station

Connect Sha Wan Express

Connect Shi Liang Road

PRD 2nd Ring

Connected Huang-Lan Express

To Da Gang Town

To Zhongshan

Xinhui

Jiang-Zhong Highway

To Jiang-Zhong Highway

To Kaiping, Zhanjiang

G325 to Zhanjiang

Connect Long-Gao Road to Gaoming

Connected Sha Long Road to Shatou

Connected FS Da DaoConnected Lingnan Da Dao

To Gu Shen Da Dao

Lecong

Chencun

LeliuLunjiao

Daliang

Ronggui

Jun’an

Xingtan

Longjiang

Beijiao

Source: 2013 Shunde Statistic Bulletin

Data Source: Statistic Bureaus of the relevant cities


Macau

HongKong

Foshan

Jiangmen

Kaiping

Taishan Zhuhai

Zhongshan

Guangzhou

Qingyuan

Dongguan

Shenzhen

Huizhou

Zhaoqing

Shunde

Shunde Railways and Ports

Shunde Railways and Metro Lines

• Apart from the highways, Shunde is also accelerating its railway and subway construction. Guangzhou-Zhuhai Intercity Railway is functioning and the second phase of Guang-Fo Metro Line 1 is connected to Foshan New City (Lecong Town in Shunde). Projects of Guang-Fo Ring, Foshan Metro Line 2, Line 3, and Guangzhou Metro Line 7 Extension sections have been launched and are planned to put into use within 5 years. What’s more, Guangzhou-Shenzhen-Hong Kong express train will be fully open in 2015.

• Benefiting from the improving railways and metro lines, Shunde is able to actively participate in better living and business activities, and to easily reach the neighbouring cities. It takes only 30mins from Shunde to every corner of Foshan and to arrive in Guangzhou, Dongguan and Zhongshan.

N

Guang-Fo Metro Line 1 (Operating)

Foshan Metro Line 2 (Year 2018)

Foshan Metro Line 3 (Year 2019)

Hong Kong-Zhuhai-Macao Bridge (Year 2015)

Guang-Fo Ring (Year 2015)

Guangzhou Metro Line 7 (Year 2016)

Guangzhou-Zhuhai Intercity Railway (Operating)

Guangzhou-Shenzhen-Hong Kong express train (Year 2015)

Airport

Port

Zhuhai North Railway Station

Guangzhou South Railway Station

Guangzhou Universities CityNanhai, Shishan

Beijiao

West Kowloon Terminal

Shunde, Ronggui

Nansha

Half hour economic zone

One hour economic zone

Two hour economic zone

Foshan West Railway Station

Foshan Airport


Transportation Costs Calculation and Analysis FMCGs demand logistics service for small quantities but with high frequency. Road transportation is considered the most suitable option. That’s why the convenience of road transportation is extremely important. Considering the short service life of FMCGs (especially food), it is not proper to deliver materials and finished goods by rails or pipelines due to their high costs and the less frequent shifts that might cause delivery inefficiency to the materials and finished goods.

In this regard, we selected road transportation to analyse the transportation cost of Shunde. The calculation and analysis below aim on verifying the cost of road transportation from Shunde to the covering areas in South China.

Destination Cities

The sales target of the FMCG is the public people and the urban population directly decides sales volumes. Guangzhou, Shenzhen, Dongguan, Foshan and Zhanjiang, the 5 most-populated cities in Guangdong province, are selected as the destination cities. Some other cities with over 7 million permanent residents, such as Changsha and Nanning in South China, located outside Guangdong province though, , are also chosen for comparison.

Data Source: Statistics Bureaus or Statistic Yearbook of the relevant cities

Note: For detailed calculation, please refer to Appedix

Comparable Cities

We chose the second or third-tier cities Dongguan, Jiangmen, Zhongshan as the comparable cities to Shunde.

In the calculation, based on the respective distance from Shunde, Jiangmen, Dongguan and Zhongshan to the destination cities, we calculated the respective toll fees and fuel costs as a total transportation cost for each city. Please refer to Appendix for detailed calculation.

The calculation and comparison shows that, concerning the transportation cost to the consumer-populated cities in South China, the superior geographical location makes Shunde more cost effective compared to the comparable second and third-tier cities.

CityPermanent

Residents by 2013 (million)

Guangzhou 12.93

Shenzhen 10.63

Dongguan 8.32

Foshan 7.30

Zhenjiang 7.17

Changsha 7.22

Nanning 7.24

Road Transportation Cost Comparison (RMB/Truck)

12,000 12,500 13,000 13,500

Jiangmen

Zhongshan

Dongguan

Shunde 12,370

13,050

12,519

13,196


Abundant High-quality Human ResourcesAbundant high-quality human resource (“HR”) and excellent HR environment will significantly decrease the costs of recruitment and training, as well as guarantee productivity. This indicates that Shunde has a continuing attraction to the migrant workers to work and settle down.

4. Human Resource

An abundant labour force and high-quality personnel play important roles in assuring and promoting the production and development of enterprises. For labour-intensive FMCG manufacturing enterprises, labour cost, complexity of recruitment and quality of the workforce are key factors to be considered when making investment decisions.

Labour cost is one of the reasons for industrial transfer. With the promotion of industrial transfer, enterprises have a more comprehensive understanding of labour cost. A lower labour cost does not mean a better labour indicator in a region, while the complexity of recruitment and quality of the workforce decide the costs of recruitment, training and unit production cost in the later period. Therefore, when a mature enterprise takes labour cost into account, it should comprehensively compare the relative costs rather than solely comparing the absolute values.

125,000

46,900

25,000

6,200

Professional and technical talent

Skilled talent

Enterprise management talent

Party and politics talent

Talents Supply in Shunde (persons)

Absolute Labour Cost

Relative Labour Cost

Salary

Labour quality Salary

Recruit-ment cost

Employed (Million) Permanent resident (Million)

Employment

1.56 2.49 62.71%

From 2008 to 2013，the employed personnel increased by 16.63%.

Source: Shunde Human Resources and Social Security Bureau


Sun Yat-sen University

Jinan University

South China University of Technology

South China Normal University

Guangdong University of Foreign Studies

University of Hong Kong

University of Macau

Hong Kong University of Science and Technology

Beijing Normal University (Zhuhai)

Beijing Institute of Technology (Zhuhai)

Colleges and Universities NearbySufficient Talents Supply

• The high-quality labour resource and completed vocational education system of Shunde guarantee sufficient labour supply for the local manufacturing industry. In Shunde, there are 13 vocational schools and 1 polytechnic, providing nearly 13500 professional technicians every year. Besides, on the basis of the strong manufacturing industry, the vocational education integrates closely with industries, setting up various majors and specified training courses upon demanding to satisfy the employment requirement of enterprises.

• As located at the core of the PRD, Shunde is surrounded by many colleges and universities. Foshan has 7 universities, 6 adult colleges, 3 polytechnics and 40 vocational schools with total 150,000 students.

Vocational schools could provide targeted training courses upon companies’ requests. Foshan shares the talents resources of Guangzhou with 37 universities and colleges, 20,000 graduates and 250,000 undergraduates.

With increasing employment difficulty in first-tier cities and the development of second-tier cities, Foshan City, including Shunde District, becomes one of the first-choice employment destinations of more and more university graduates by virtue of its excellent location, strengthening economic power and nice urbanized environment. Therefore, the surrounding colleges and universities guarantee the supply of high-quality talents for Shunde.

Excellent HR Environment

• Shunde HR Association actively builds up employment platforms and hosts regular recruitment fairs to provide help for enterprises, to reduce recruitment costs. In 2013, the association hosted 116 recruitment fairs, with approximately 7,900 enterprises and 90,000 persons participated.

• In Shunde, there are 19 certified re-employment training agencies to carry out training courses of more than 50 technical professions, which facilitates talent training for enterprises. 58,109 people received vocational training in 2013,.

• Shunde attaches great importance to high-skilled talents training. By carrying out the Blue-collar Engineers training program, Shunde provides outstanding talents support for enterprises’ development and industrial upgrading.

1provincial technician station

3enterprise technical training

bases

19certified re-employment training

agencies

15,130 high-skilled talents newly

registered in 2013

Blue-collar Engineers Training Program

Source: Shunde Human Resources and Social Security Bureau


Stable and Reasonable Age Structure

• Generally, in a developed country with a relatively ageing population, the labour force elder than 45 years old normally accounts for more than 30% of the total workforce. However, in 2013, the job seekers over 45 years old accounted for only 15.3% of the total job seekers in Foshan City.

• Job seekers of 25-44 years old account for 64.20% of the total. This ratio increases as compared to 58.11% in 2011 and 60.25% in 2012.6

Migrant Labour Supply

• Guangdong Province is one of the provinces with largest flowing population. A large number of migrant labour guarantees the supply of line staff for local manufacturers. As adjacent to first-tier cities or cities with mature manufacturing industries such as Guangzhou, Shenzhen and Dongguan, Shunde attracts numerous migrant labours annually as its economy develops.

• In 2013, permanent resident population in Shunde reached 2.49 million, including 1.23 million non-domiciled, which increased steadily. From 2008 to 2012, the number of non-domiciled residents in Shunde increased by 8.74%.

6. Source：Shunde Human Resources and Social Security Bureau7. Source：Shunde Human Resources and Social Security Bureau

Migrant Labours in Shunde

Stable amount and increase of the migrant labours in Shunde provide strong support to manufacturers.

Education

• By 2010, the average schooling years of the Foshan labour force were 10.1 years.7 According to the “Twelfth Five-Year Plan of Foshan Education”, by the year of 2015, the average education years of the workforce will increase to more than 11.5 years, in which the proportion of higher education will reach more than 16%, and the average education years of new labour force will increase to 14.5 years.

Education of Foshan Job Seekers in 2013

57.43%

27.06%15.51%

Secondary School and below

High School (includes vocational high school and technical school)

College degree and above

Source: Shunde Human Resources and Social Security BureauSource:：2010 Foshan Census (the latest census)

Shunde is sub-ordinate to Foshan City. As the traffic and communication become more and more convenient, labours move within districts of Foshan. Therefore, the labour conditions in Foshan reflect the HR quality of Shunde.

Degrees Year of 2000 Among every 100,000 labours

Year of 2010 Among every 100,000 labours

Growth%

High school and above 23,826 36,579 53.52%

College degree and above 4,715 12,277 160.37%


Labour Cost

Labour Wage

• In 2013, average annual wage of employed staff and workers in Shunde was RMB51,261, slightly lower than the median wage level as compared to other cities in PRD.

Chart: Average Annual Wages of Employed Staff and Workers in 2013 (RMB)

Note: PRD cities include Guangzhou, Shenzhen, Zhuhai, Foshan, Jiangmen, Dongguan, Zhongshan, Huizhou, Zhaoqing, etc.Data Source: Statistics Bureaus of relevant cities

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000

Pearl River Delta

Jiangmen

Dongguan

Shenzhen

Shunde

62,619

42,870

51,261

42,851

55,960

Compounded Annual Growth Rate of Shunde Wages Employed Staff and Workers 2009-2012 (%)

Data Source: Statistics Bureaus of respective cities

0% 5% 10% 15% 20%

Jiangmen

Dongguan

Zhuhai

Shenzhen

Guangzhou

Shunde

9.01%

8.09%

14.91%

10.22%

8.09%

16.05%

• The increasing trend of wages indicates that wage level of Shunde grows steadily by virtue of the balance between supply and demand. The compounded annual growth rate from 2009 to 2012 of Shunde wage was 8.09%, lower than that of other major cities in the PRD.


Insurance by Enterprises

Pension Insurance 11%

Medical Insurance (includes maternity insurance) 5.6%

Unemployment Insurance 0.5%

Work-related Injury Insurance 0.45%-1.5%

Total 18.45%-19.81%

Social Security Cost

• According to Chinese current labour and social security regulations, enterprises must pay a certain percentage of the social security fees for workers, generally including pension insurance, medical insurance, unemployment insurance, work-related injury insurance, etc. These costs are generally levied in accordance with the local average wages. But in actual practice, due to the unbalanced economic development of different areas, some of the fees mentioned will be statutorily levied. The security costs borne by the enterprises, along with wages, forms the labour costs.

• The table beside shows the proportion of security costs borne by the enterprises.

• The security insurance proportion for Shunde enterprises to bear is lower than the average level of PRD cities.

Comparisons of Security Fees Proportion for Enterprises

Data Source: Labour and Social Security Bureaus of relevant cities and related websites (local minimum work-related injury insurance rate applied)

0% 5% 10% 15% 20% 25%

Jiangmen

Dongguan

Zhuhai

Shenzhen

Guangzhou

Shunde

20.45%

22.4%

18.1%

21.5%

18.45%

24.45%

Reasonable absolute labor

costs

Save recruitment costs

Improve production efficiency and reduce

unit costs

Reasonable wage level with low increase rate

Good recruitment platform and adequate supply of

labor at all levels

Stable and reasonable labor structure with high

quality

Abundant high-quality human resources provide numerous talents at all levels to Shunde enterprises. A stable labour structure and low-growing wages are beneficial to the long-term and stable development of enterprises.


5. Land Resources

Shunde covers an area of 806 km2, consisting of 10 towns, 202 villages and multiple special parks. As of 2012, Shunde has up to 136 km2 industrial land, including 21km2 new industrial land, which provides the potential space for the new industry and relocated business.8

The picture below shows the distribution of the major specified parks in Shunde. The well-organized planning reflects the government’s strong support for the local economy, and supporting policies for constructing facilities to attract talents.

8. Data Source: Shunde Break-through: White Paper on Creating a National Sustainable Transformation and Development Zone

Guangdong Xiong Ying Logistics CitySunlink International Machinery CityGuotong Logistics City

Jia Li yuan Industrial CityCJC Innovation Industrial ParkGuangdong Industrial Design CityE-world CenterHuicong Jia Dian CityBeijiao International Wealth Center

Hong Yu (Leliu) Industrial Park

Wisdom & Wealth Garden

Worldfriend Industrial City

European Park, Co-win Industrial ParkPrologies Zone

Creative Co Wo Jewelry CenterSouth China Machinery City

Lecong Steel World

Furniture E-Commerce Port

WIOT Information Park

Tian Fu Lai Industrial CityShunde Innovation and Tech CenterDymatic New Materials Innovation Park

South China Wisdom ValleyTsinghua Lihe Science and Technology Park

Lecong

Chencun

Beijiao

Lunjiao

LeliuLongjiang

Xingtan

Jun’an

Ronggui

Daliang

Shunde Creative Park

Commerce and Offices

Industrial Properties

Exhibition Centers

Warehousing and Logistics


Speed up “Three-old Renovation”

Shunde renews and secondarily exploit the land resources by renovating the old towns, old plants and old villages, i.e. “three-old”, to promote industrial upgrading, city transformation and environment reconstruction. The Shunde Three-old Renovation Plan launched in 2014 guides Shunde’s renovation projects until 2020. The Plan indicates that there will be 194 cases to be renovated, covering an area of 8,742 hectares, accounting for 10.8% of the total surface of Shunde. Among the 194 cases, 85 will be transformed into living places, 53 for commercial service, 52 for industrial projects, and another 4 for public welfare projects.9

The “three-old” renovation will save and conserve the land resources to provide space for the new economic growth point. It will also promote construction of industrial parks with completed industrial chains and services, moving out or merging scattered manufacturers, transforming the scattered village-level industrial areas into integrated industrial zones, which helps to increase the resources efficiency and cluster effects for the settled companies.

Industrial Land Cost

The table below shows comparison of the industrial land cost in the major industrial cities. Shunde has a relatively lower cost comparing to the other cities in Guangdong.

The land price in Shunde is usually determined on the basis of industrial category, environmental effect, energy-consuming index, investment plans, economic effect, integrity of the investors as well as the selling standard. However, for high-quality projects driving industrial chains significantly with obvious economic and social benefits, the land price is considered on real cases.

Shunde Guangzhou Shenzhen Dongguan Jiangmen

Minimum price (RMB/m2)

336 336-600 384-600 384 252-336

Factory Rental (RMB/m2/month)

8-18 10-30 10-65 8-15 8-13

Land Use Tax (RMB/m2/year)

2.5-5 3-15 3-30 2.5-5 2.5-4

Data Source: Investment promotion materials of relevant cities and survey results from PwC in June, 2014

9. Data Source: Shunde Development Planning and Statistics Bureau

Shunde Three-old Renovation Plan

194 projects

8,742 hectares

10.8% of shunde surface


6. Similar Manufacturers and Supporting Industries

Industrial cluster is the result of industrial transfer. On one hand, the advantages of resources or labour force attract companies moving in or newly investing in; On the other hand, local governments use the regional advantages to introduce foreign investment, push forward economic development, infrastructure construction, production facilities and other supporting infrastructure, in order to promote the development of local advantageous industries.

The emergence and development of industrial clusters reduce time and cost of decision-making on site selection, as industrial cluster area has external economic benefits for the enterprises.

1. The related industrial infrastructure and facilities are consummate.

2. The gathered upstream and downstream enterprises and supporting service companies reduce transaction costs.

3. With magnetic field effect of talents, enterprises can find the right human resources at lower cost in a shorter time, reducing the labour cost.

4. The rapid spread of tacit knowledge and industry information benefits clusters upgrading and development.


Key Cold Storage Warehousing Enterprises in Foshan

Data Source: China Warehousing and Logistics website; Foshan Logistics Development Planning 2010-2020

Foshan Nanhai Dali Guijiang Cold Storage

A large comprehensive cold storage of a million tons provides warehousing and distribution services, it also has convenient transportation links as it is adjacent to expressways of 321#, 325#, Guang-san and Guang-Fo.

Yue Tai Cold Storage Property Investment Co., Ltd

Located at the junction of Guangzhou and Foshan, the total planned area is 300 mu. It is a cold chain logistic platform providing 80,000 tons of cold storage, distribution and cold chain logistic service.

Guangdong Guotong Logistics Town

Located in Shunde Chencun town. The total planned area is 2300 mu, equivalent to 1,533,410 m2. The first cold storage room is 4620 m2. The transportation is convenient as it is adjacent to expressways of S39 and S43.

The following introduction shows Foshan FMCG manufacturers and the supply chain.

Food Manufacturing Companies in Foshan• Food and beverage industry is an

advantageous industry of Foshan City. Many famous food companies set up factories in Foshan and formed an industrial cluster. By 2013, a total of 151 food and beverage manufacturing enterprises settled in Foshan, with an annual industrial output value reaching RMB68.1 billion in 2013, which increased by 12.5% as compared to 2012.

• Food safety is vital to food manufacturing companies. In Foshan, water is mainly sourced from the Xijiang and Beijiang Rivers. The high quality of water and a safe environment has attracted a lot of food and beverage manufacturing companies to locate in Foshan.

On the other hand, food and beverage clusters attracted a large number of supporting enterprises and pushed Foshan to improve all kinds of infrastructures, resulting in a greater attraction and endogenous power and promoting the continuous growth of scale and output of food and beverage industry in Foshan.

Logistics and Warehousing Enterprises• The location advantage and modern

traffic network make Foshan city an important logistic center in the west coast of the entrance of Pearl River. It also has become a strong support for numerous large-scale logistics projects to locate in Foshan. And Foshan is one of the 46 modern logistics demonstration cities in China.

• Foshan city has more than 3,000 logistic enterprises, the total output value of the transportation and warehousing industry amounted to RMB13.8 billion in 2011.10

• Many warehousing enterprises provide cold storage warehousing and distribution service in Foshan.

Distribution Map of Major Food Enterprises in Foshan

Konli

YEO’S Budweiser

Tsing Tao

Jian Li Bao

Red Bull

Yan Jing Beer

Snow Beer

Sunquck

Yuan Hang

Hai Tian

Wang Wang

Shi Wan Wine

Gan Zhu

San Miguel

Hong Li

Nissin Foods

Hong Fu Loi

Grobest

Vitasoy

Yi Li

Heinz

Coca-Cola

Sanshui

Nanhai

Gaoming

Shunde

Chancheng

10. Source: Foshan 2012 Year Book and Foshan Logistics Development Planning 2010-2020


Data Source: Foshan Daily, Shunde News website

Packaging and Processing Enterprises• Packaging and printing industry is

one of the pillar industries of Foshan. 288 packaging and printing enterprises have located in Foshan as of 2013. And the total industrial output value reached RMB48.5 billion in 2013.

Key Packaging Production /Processing Enterprises in Foshan

Packaging production and processing enterprises located in Foshan such as the world top-500 company, International Paper Group and Corenso Paper Core Co. Ltd.

Guangdong Decro Film New Materials Co., Ltd., located in Xintan town of Shunde, has won great affirmation from the customers by virtue of its environmentally friendly, energy-efficient production processes and technologies. Decro has cooperated with Coca-Cola, Nestlé, Colgate and many others world top-500 companies on providing packaging films.

The food and beverage enterprises assembled in Foshan show that Foshan has essential elements such as high-quality water and safety environment; also highlights its advantage in industrial cluster externalities:

• Related supporting enterprises are available, reducing collaboration and transaction costs.

• Industrial clusters require local government to optimize infrastructure, government services, so as to attract more similar enterprises.

• The gathered experienced managing talents and labours, reducing recruitment cost


7. Other Infrastructure

Industrial Electricity• In 2013, the electricity supply in

Shunde reached 14.991 billion kWh, accounting for about 28.6% of Foshan city, with an increase of 5.04% and ranking No.3 district in Foshan city.

• By the end of 2013, Shunde had one 500kW substations, six 220kW substations and 20 main transformers.

• In recent years, Shunde government initiates cooperation with enterprises to promote the construction of the electricity grid in order to fulfil economy development demand, aiming at building a modern electricity grid to be safe, reliable, economical, energy-saving and intelligent-interactive. The abundant power supply and consummate power grid resulted in few power cuts in Shunde since June 2008.

• Shunde is developed in economy, completed in grid construction with steady power supply. It applies the electricity standard of Level-A city in Guangdong. Overall, the electricity price in Shunde is similar to the surrounding cities.

Data Source: 2014 Shunde Electricity Work Conference

In 2013, Shunde invested about 1.227 billion yuan in grid construction, initiating 27 planning and construction projects of 110kV(and above) grids and 305 distribution network projects.

25 planning and construction projects of 110kV(and above) grid are about to

implement in 2014 with a total investment of 3.555 billion yuan, focusing on Kuifu, Sugang, Tancun and other power transmission projects in order to support POSCO steel, South China Wisdom Valley, OCT and other key projects.

On Feb 28, 2014, the 500kV transmission project from Jiangmen converter station to Shunde substation was completed and put into operation. This is a

key project of the west-to-east electricity transmission program. It will fulfil the electricity demand of Shunde by 2020.

The Industrial Electricity Price Comparison Between Shunde and Surrounding Cities

Data Source: Pricing bureaus of the cities and research by PwC in June 2014

0.0 0.2 0.4 0.6 0.8 1.0

Jiangmen

Dongguan

Zhuhai

Shenzhen

Guangzhou

Shunde 0.9028

0.9028

0.912

0.9028

0.9028

0.8888


Industrial water• The completed water supply system

ensures the stable supply in Shunde with daily supply capacity of 1.6 million m³, covering an area of 803 km2 and serving 2.4 million citizens. The total supply in 2013 reached 381 million m³.

• Shunde actively promotes civil livelihood projects. Since 2012, Shunde has rescheduled water supply, with a new investment of RMB3 billion in reconstructing the

network and expanding the water plants. As planned, 6 grade-one water source protection zones would be adjusted to 5, 15 of the 21 water plants to be shut down, 1 to be rebuilt and the others to be expanded as well as building up 311km new network. The projects will contribute to integrate water supply and improve its quality and stability, and avoid water failure accidents caused by water-pipe bursts.11

• Shunde water supply department closely monitors water quality, discovers and handles sudden water pollution in time to guarantee the drinking water. In 2012, Shunde tested and analyzed over 9,000 water samples and issued 1,396 testing reports. The water quality guarantees the food and beverage industries in Shunde.

Price of Industrial Water in Shunde

Classification Price(RMB/M3) Sewage Treatment Fee(RMB/M3)

Industrial Water 2.10 1.5

11. Source: Shunde Water Supply Planning 2010-2020


8. Commercial Facilities

The living environment and business facilities are important indicators of site selection, especially for the foreign enterprises. Living conditions and well-improved business facilities of hotels and entertainment can satisfy the requirement of expatriates, which is beneficial for the personnel stability and further development of the enterprises. Perfect commercial facilities also meet the reception and business entertainment needs during operation.

Coming with foreign enterprises, expatriates to Shunde are increasing annually and reached 2,000 people in 2013, increased by 70% comparing to that of year 2011. And the expatriates in Foshan City exceeded 20,000 in 2011. The increase of expatriates shows the globalized business environment of Shunde, reflecting the high quality of international living environment. 12

• Shunde is a livable city with special human and Lingnan waterfront village feature. It owns the honour of “The Hometown of Chinese Folk Art”, “The Hometown of Best Chefs”, “Gourmet Paradise” etc. Shunde government commits to constructing the environmental-friendly livable city with harmonious urban and rural integration, creates a network city compatible with industrial efficiency and ecological environment.

• Shunde has all kinds of commercial hotels, resorts and holiday villages etc. to meet different accommodation needs. At present, there are 86 star-level hotels in Foshan, including 10 five-star hotels (5 in Shunde) and 17 four-star hotels (10 in Shunde).

• Large business centres, meeting rooms, high-class gyms and beauty & health care salons are available in all varieties, as well as two international standard golf courses. The top 7 golf courses in Foshan could be reached from Shunde in one hour.

Cities of Guangdong Province

Ranking in China

Zhuhai 1

Shenzhen 6

Guangzhou 14

Zhongshang 15

Foshan 25

Huizhou 68

Jiangmen 71

Shantou 86

Shanwei 87

Dongguan 89

Data Source: 2013 Most Livable Cities in China announced by Chinese Academy of Social Science

12. Source: South Daily and Foshan Online13. Source: Foshan Online

• In the Most Livable Cities List from the Chinese Academy of Social Science in 2013, Foshan stands the 25th, and 5th in Guangdong Province.

• In order to serve the expatriates better, early in 2004, Foshan has started permanent residential “green card” service for foreigners. In 2010, Foshan provided E-application service for resident visa applicants, and promoted resident bonus system created a new management model of “let the foreigners assimilate into the community”, as well as set up “service station for foreigners” in many towns.13

The Cities in Guangdong Listed in China Top 100 Most Livable Cities


14. Flood classification is based on the water level over the Pearl River Surface.• Once-of-200-year: 3.47m• Once-of-100-year: 3.34m• Once-of-50-year: 3.22m• Once-of-20-year: 3.06m• Once-of-10-year: 2.92mAll embankments protecting 10,000-mu area have flood control capacities of 4.72 meters, capable to withstand once-of-200-year level or even higher level of flood.

15. Level 8 wind is moderate, mainly able to snap twigs and slight resistance to walk.

9. Climate Condition

Confortable weather and rare natural disasters ensure a stable and safe operation of companies in the region.

Shunde is located in the downstream of the West River and North River, at the hinterland of the Pearl River Delta with woven rivers network. It is a subtropical marine monsoon climate, with adequate light and rainfall. The annual average temperature is 23.4 0C during the latest ten years of 2004 - 2013, and the average annual rainfall of 1,734.5 mm. April to September is the main rainfall season, accounted for 81% rainfall throughout the year.

Shunde is rarely attacked by earthquakes, hail, tornadoes, typhoons and other natural disasters, and little affected from flood and typhoons. In the past 50 years, the effect from flood and typhoon has not formed into disaster and did not cause significant economic losses.

Flood

• Flood is a natural phenomenon with water volume and level increasing rapidly, caused by natural factors such as rainstorm, sharp melting ice and snow, storm surges. Consumate flood prevention and drainage system often effectively prevent flood disaster formation.

• In recent 50 years, Shunde has encountered only 4 floods over once-of-10-year level14. But none has brought flooding disasters due to the consummate prevention and drainage system and safety is assured.

• In recent years, the upstream hydropower stations have adjusted the flow discharge and river sand mining deepens the river bed, the frequency and strength of flooding opportunity caused by heavy rains has been greatly reduced. Since 1998, Shunde has never met a flood over once-of-10-year level10.

Typhoon

• Typhoon is a tropical cyclone formed in tropical or subtropical seas and lands on coastal cities.

• Shunde is located at the inland of PRD, away from the coast, and has not directly attacked by typhoons. It is possible to be affected by the typhoon periphery influence, with strong rainfall and wind. During 1959 to 2013, total 105 typhoons brought periphery effect to Shunde, averagely 1.9 per year. Only in 1964 and 2013, Shunde has encountered level-10 winds during typhoon period, other effects are below level 815.

Water Conservancy Project

20 years to conduct an overall compliance and reinforcement. At present, the embankments protecting 10,000-mu areas are all built with flood control capacity withstanding once-of-50-year level plus 1.5 meters higher as a safety buffer, i.e. 4.72m.

Flood Control Materials Warehouses and Yards

Shunde has completed 13 warehouses and yards for flood materials with large scale, centralized storage and fast shipping advantages, and reserves 21 assault boats. All materials reserves meet provincial and above level.

Emergency Response Team

The flood control and emergency response team has 12 branches and more than 4300 key members, carrying out targeted training every year to get capable for the daunting task of flood control and emergency response.

Three-prevention Information System

The three-prevention command and decision supporting system is based on information technology, including water and rainfall telemetry system, the inner system, pump station status system, the sluice stations monitoring system, inland river water-level telemetry system, three-prevention office management system.

Natural Disasters Prevention and Response System


10. Preferential Policies of the Government

To support the industry development and promote business investment, Shunde provides a series of policies to help companies to get listed, backbone enterprises to grow bigger and stronger, develop headquarters economy, and in international market access, personnel training, technological innovation, etc.

Support company listing and develop HQ economy

• Encourage enterprises to go listed with maximum support of RMB10 million. Strengthen the financial support to the backbone enterprises.

• The certified headquarter company could be granted economic contribution award, location award of Fortune 500 companies, Elite award, office purchase subsidies or rental support, etc.

Support grouping operation

• Subsidy varies according to the annual output values after statements consolidated for the company group or parent company registered in Shunde.

• The retained portion of Shunde from the fees incurred after acquisition or restructuring succeeded shall be equivalently paid back.

Support merger, acquisition and restructuring

• Encourage backbone enterprises to implement merger, acquisition and restructuring. Subsidy varies according to the objective amount and the output values of the first year after statements consolidated.

Reduce business burden

• Implement the preferential policies of finance and taxation; support the backbone enterprise with professional service from the big-company taxation teams.

• Concerning the administrative fees of dyke protection, education additional, disabled guarantee fund and other charges that collected based on the industrial output, Shunde government and relevant departments report actively to the higher authorities for the implementation of cap collection.

Talents support • Extra points are given to the family members of the managers and technicians on getting residential account and enrolment

• Create a good living environment for talents. The certified high level talents introduced by the backbone enterprises could receive a house with maximum 300 m2 of construction surface and RMB2 million settle-in allowance. The top national expert and talents could receive a monthly allowance of maximum RMB30,000 and RMB20,000 respectively.

Financing support

• Establish “specified fund” of RMB2.5 billion to reward and support the backbone enterprise’s marching development.

• Financial rewards differ according to the incremental output values of the backbone

• Supporting fund of growing bigger and stronger. Subsidy varies according to the objective amount and the output values of the first year after statements consolidated.

Foreign Investment Promotion

Industrial Design

Science and Technology Innovation

Talents Support

Intellectual Property Rights

Protection

Machinery Equipment

Supporting Policies to Help Enterprises Grow Bigger and Stronger


Appendix: Road Transportation Calculation

The calculation is based on the following assumptions:

• Type-3 Vehicle; average highway toll fee is about 0.5 RMB/km of each province; the tariff coefficient is 2

• The fuel consumption is 26 L/100km

• The fuel price is 7.59 RMB / L

The transportation cost stated above does not include the following fixed costs1. Road Maintenance2. Administration Expense 3. Annual Inspection Fee4. Insurance fare5. Labour cost

Transportation Cost from Shunde to Major Commercial Cities (Per Truck)

City Distance Round-way highway toll fee

(RMB)

Round-way fuel consumption (L)

Round-way fuel cost

(RMB)

Total cost (RMB)

A B=A*0.5*2*2 C=A*26*2/100 D=C*7.59 E=B+D

Guangzhou 46 92 24 182.16 274.16

Shenzhen 126 252 66 500.94 752.94

Dongguan 90 180 47 356.73 536.73

Foshan (Downtown)

39 78 20 151.8 229.8

Zhanjiang 410 820 213 1,616.67 2,436.67

Changsha 740 1,480 385 2,922.15 4,402.15

Nanning 628 1,256 327 2,481.93 3,737.93

Total 12,370.38


(RMB)


Round-way fuel cost

(RMB)

Total cost (RMB)

A B=A*0.5*2*2 C=A*26*2/100 D=C*7.59 E=B+D

Guangzhou 91 182 47 356.73 538.73

Shenzhen 156 312 81 614.79 926.79

Dongguan 120 240 62 470.58 710.58

Foshan 69 138 36 273.24 411.24

Zhanjiang 363 726 189 1,434.51 2,160.51

Changsha 786 1,572 409 3,104.31 4,676.31

Nanning 610 1,220 317 2,406.03 3,626.03

Total 13,050.19

Transportation Cost from Jiangmen to Major Commercial Cities (Per Truck)


(RMB)


Round-way fuel cost

(RMB)

Total cost (RMB)

A B=A*0.5*2*2 C=A*26*2/100 D=C*7.59 E=B+D

Guangzhou 67 134 35 265.65 399.65

Shenzhen 73 146 38 288.42 434.42

Dongguan - - - - -

Foshan 93 186 48 364.32 550.32

Zhanjiang 476 952 248 1,882.32 2,834.32

Changsha 732 1,464 381 2,891.79 4,355.79

Nanning 663 1,326 345 2,618.55 3,944.55

Total 12,519.05

Transportation Cost from Dongguan to Major Commercial Cities (Per Truck)


(RMB)


Round-way fuel cost

(RMB)

Total cost (RMB)

A B=A*0.5*2*2 C=A*26*2/100 D=C*7.59 E=B+D

Guangzhou 89 178 46 349.14 527.14

Shenzhen 125 250 65 493.35 743.35

Dongguan 90 180 47 356.73 536.73

Foshan 82 164 43 326.37 490.37

Zhanjiang 406 812 211 1,601.49 2,413.49

Changsha 777 1,554 404 3,066.36 4,620.36

Nanning 650 1,300 338 2,565.42 3,865.42

Total 13,196.86

Transportation Cost from Zhongshan to Major Commercial Cities (Per Truck)

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Invest Shunde BureauResponsible for formulating the investment promotional policies, promoting investment environment and projects, and coordinating the affairs of investment.

Contact

Admin Dept.

+86-757-2283 2266

Information Dept.

+86-757-2283 5745

Project Development Dept.

+86-757-2283 5485

Address

2/F East Wing of Shunde Government Building, No. 3 of Demin Road, Daliang, Shunde, Guangdong, P.R.China 528333

For more information or assistance, please contact:

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Creating International Business Environment · 2015-05-18 · Creating International Business...

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