Investing in Deyang: Industry, Economics and Policy
Deyang, in southwestern Sichuan province, has evolved into a dynamic economic hub. We look at the economy, industry, and favorable policies of the city.
Located in China’s southwestern province of Sichuan, Deyang has emerged as a thriving economic hub, attracting both domestic and international investors. The city’s established economic prowess is rooted in its mature manufacturing and services sector, business-supportive policies, and overall favorable investment conditions.
2022 economic overview
Recently listed as one of the top pilot competitive manufacturing cities in Sichuan province, Deyang has harnessed its geographical advantages and transformed them into economic opportunities. Its favorable location, straddling the Chengdu-Chongqing Economic Belt, grants Deyang access to a vast consumer market and an extensive transportation network.
Deyang’s GDP reached RMB 281.687 billion (US$39.53 billion) in 2022, showing 3.1 percent growth from the previous year. The city registered an annual increase in all three key sectors of its economy:
- The value added of the primary industry was RMB 29.622 billion (US$7.9 billion), an increase of 4.3 percent.
- The value added of the secondary industry was RMB 135.492 billion (US$36.58 billion), an increase of 3.0 percent.
- The value added of the tertiary industry was RMB 116.573 billion (US$31.47), an increase of 3.1 percent.
Deyang’s economy is driven by its manufacturing sector, which contributes 44.2 percent of the city’s GDP. Services nonetheless remain a mainstay sector, accounting for almost all of the remaining value-add to its GDP.
Foreign trade and investment
In 2022, Deyang’s trade in goods grew at a rate of 30.9 percent year-on-year to RMB 18.35 billion (US$2.57 billion). Exports grew 13.9 percent year-on-year to reach RMB 12.54 billion (US$1.7 billion), while imports surged 93.3 percent, reaching RMB 5.81 billion (US$815 million).
Actual use of foreign capital grew to RMB 1.13 billion (US$158 million), of which foreign direct investment (FDI) amounted to US$49.22 million. In 2022, the Deyang added 16 new foreign-invested enterprises, reaching a total of 168 entities city-wide.
Key industries in Deyang include advanced manufacturing, energy, electronics, and food processing industries, to name a few. With its focus on high-tech industries, Deyang has positioned itself as a nucleus for research and development, fostering a culture of innovation and entrepreneurship. We briefly spotlight some of the top-performing industrial segments below.
The equipment manufacturing industry in Deyang hosts several domestic and internationally recognized heavy equipment manufacturing enterprises, including China National Erzhong Group, Dongfang Electric Machinery Co., Ltd., Dongfang Turbine Co., Ltd., Dongfang Electric Wind Power Technology Co., Ltd., Dongfang Boiler Group Co., Ltd., and Sichuan Honghua Petroleum Equipment Co., Ltd. These enterprises rank highly in the global power generation assembly output and are the leading petroleum drilling machine exporters in China.
The industry is also involved in clean technologies, such as nuclear power and wind power, as well as the manufacturing of new energy equipment. Notably, Deyang has set up the world’s largest 80,000-ton drop press, known as the “heavy machine of the country.” The equipment manufacturing industry in Deyang also includes over 1,500 medium and small-sized machining enterprises, forming the largest equipment manufacturing industrial cluster in the country.
Deyang is an important phosphorous chemical industry and chemical fertilizer production base in China. It is home to several large-scale key enterprises, such as Hongda Group, Lomon Corporation, Jinlu Group, and Meifeng Chemical Industry Co., Ltd.
The phosphorous chemical industry in Deyang has established a complete industrial chain, starting from phosphate ore mining and extending to the production of various fine phosphorous chemical products, including yellow phosphorus, phosphate fertilizer, phosphates, and vanadium-titanium.
Food and beverages
Deyang boasts over 50 food products that have been rated as national and provincial high-quality products.
Marketable products from the region include Jiannanchun Group, Ice Age Mineral Water, Deyang Soysauce, and Tianfu Peanut.
Deyang has several pharmaceutical products and brands, such as Yuanji Pharmaceutical, Medco Pharmaceutical, Yike Pharmacy, and Weiguang Pharmaceutical. Deyang ranks second in Sichuan Province for the number of its medical production enterprises, drug approvals secured, and certificates issued for new drugs.
Deyang preferential policies
To attract investment and foster economic growth, Deyang has implemented a range of preferential policies. These policies include tax support, science and technology support, leading talent policies, factor support, and industry support. These measures aim to create a conducive environment for businesses and innovation.
Tax support policy
The city of Deyang adheres to several tax support policies designed to promote the development of China’s western regions.
Income generated from investments in key national public infrastructure projects supported by the government, as specified in the Catalogue of Preferential Enterprise Income Tax for Public Infrastructure Projects, and the income derived from eligible projects related to environmental protection, energy conservation, and water saving, will be exempt from corporate income tax in the first three years of operations. From the fourth year to the sixth year, the tax rate will be halved for these types of income. This applies from the taxable year when the projects first generate production and operational income.
Moreover, if an enterprise purchases and applies special equipment for environmental protection, energy conservation, and safety production, it can offset 10 percent of the equipment investment from its assessed corporate income tax in the same year.
Science and technology support policy
Under the science and technology support policy, recently recognized national, provincial, and municipal incubators will receive one-time awards of RMB 600,000 (US$84,232), RMB 300,000 (US$42,126), and RMB 100,000 (US$14,038), respectively.
Enterprises that successfully establish a “provincial SMEs venture model base” will receive special support ranging from RMB 500,000 (US$70,210) to RMB 1 million (US$140,423). Technology-based enterprises newly eligible for the “provincial small enterprise venture model base” will receive a subsidy equal to 50 percent of their factory rent, up to a maximum of RMB 50,000 (US$7,019).
Leading talents “1+3” policy
The benefits available in Deyang for leading talents under the “1+3” policy are tabled below.
|Deyang’s talents policy|
|Beneficiary||Subsidies and allowances|
|Talents who relocate to Deyang||· A one-time settlement subsidy of up to RMB 1 million (US$140,423).
· A monthly post allowance of RMB 20,000 (US$2,808).
· An annual academic exchange subsidy of RMB 20,000 (US$2,808), based on their employer’s remuneration.
|Leading talents or teams involved in innovation and entrepreneurship in Deyang projects||· A one-time comprehensive subsidy of up to RMB 20 million (US$2.8 million).|
|Talent-sourcing agencies and organizations||· A subsidy of up to RMB 100,000 (US$14,041) per new talent successfully employed in the city.|
The city, in particular, recognizes the importance of acquiring talents in the following three categories:
- Education sector: Full-time leading talents who sign employment contracts for over three years will receive a settlement subsidy ranging from RMB 300,000 (US$42,126) to RMB 1 million (US$140,423), a monthly post allowance ranging from RMB 3,000 to RMB 10,000 (US$1,404), and financial assistance for scientific research projects of up to RMB 1 million (US$140,423).
- Healthcare sector: Full-time leading talents who sign employment contracts for over three years will receive a settlement subsidy ranging from RMB 300,000 (US$42,126) to RMB 1 million (US$140,423), a monthly post allowance ranging from RMB 5,000 (US$702.11) to RMB 20,000 (US$2,808), and financial assistance for scientific research projects of up to RMB 500,000 (US$70,210).
- Science and technology sector: Full-time leading talents who sign employment contracts for over three years will receive a settlement subsidy ranging from RMB 200,000 (US$28,082) to RMB 1 million (US$140,423), a monthly post allowance ranging from RMB 5,000 (US$702.11) to RMB 20,000 (US$2,808), and financial assistance for technological innovation projects ranging from RMB 500,000 (US$70,210) to RMB 20 million (US$2.8 million).
Projects and enterprises involved in industrial transfer with high scientific and technological value, good economic returns, low resource consumption, and minimal environmental pollution will be designated as key enterprises at the city level. They will receive priority in land allocation, electricity, and gas utilization, water use planning, and other essential resources to ensure timely project operation.
Newly established enterprises or projects within the industrial district will be exempt from relevant charges for production and domestic sewage connected to the municipal sewage pipe network. Charges for production and domestic sewage discharge and registration fees will also be waived for the first year of operation. Power, gas, and water supply pipelines will be extended from the industrial concentration district to the plant area, ensuring sufficient power supply for enterprises and striving for favorable electricity prices.
Industry support policy
The city offers several benefits to support companies operating in its modern service industry. These are tabled below.
|Deyang’s industry support policy|
|Enterprises recognized as part of Deyang’s modern service industry||· A subsidy of up to RMB 600,000 (US$84.23 million). Priority will be given to supporting construction projects, such as infrastructure and public service platforms within the clustered zone.|
|Newly introduced and registered enterprises, paying taxes uniformly in the city with a registered capital of over RMB 10 million and contributing more than RMB 1 million to local financial revenue in the previous year||· A one-time award equal to 10 percent of their contribution, up to a maximum of RMB 1 million (US$140,392).|
|Newly introduced large enterprises, large groups, regional headquarters, and industrial leading enterprises recognized by provincial or senior government departments||· A one-time award of RMB 500,000 (US$70,196).|
|New projects with actual investments reaching RMB 100 million, RMB 200 million, RMB 500 million or more, or transformation and upgrading projects with actual investments reaching RMB 10 million, RMB 50 million, RMB 100 million, or more, aligned with the city’s service industry development plan||· A one-time award of RMB 200,000 (US$28,080) million, RMB 500,000 (US$70,201), and RMB 1 million (US$140,396), respectively, upon opening and operation.|
Medical treatment and healthcare
Lastly, the municipal government also introduced several actions to support companies in the medical treatment and healthcare sector. For investments and initiatives in medical treatment and health service projects exceeding RMB 500 million (US$70.2 million), a project investment attraction agreement can be signed based on the cost price of requisitioned land.
If the land remission result exceeds the negotiated land price set by the government or the Administrative Committee of the Park and the project investor, the investment guidance fund for the development of the medical treatment and health service industry, established by the financial department at the same level or the government, will provide corresponding subsidies. From the date of registration for practice, the private property and land of medical institutions will be exempt from property tax and urban land use tax for three years. After three years, project investors will enjoy preferential tax policies according to the law and may be granted awards and subsidies by the investment guidance fund for the development of the medical treatment and health service industry, as applicable.
Nonprofit medical treatment and health service projects will be exempt from related administrative charges, while profit-oriented projects will be charged half of the relevant administrative fees.
Finally, for projects located within the city or county, the project investor will be granted awards and subsidies by the financial department at the same level through project support.
Deyang’s key development areas
Deyang has designated key development areas to promote specialized growth and industrialization. The Deyang Economic and Technological Development Zone, Zhongjiang Hi-Tech Industrial Park, and Deyang-Aba Ecological Economy Industrial Park are among the prominent areas focused on economic development and attracting investment.
Deyang Economic and Technological Development Zone
The Deyang Economic and Technological Development Zone spans an area of 78.5 square kilometers, with a planned construction area of 49.42 square kilometers and a completed area of 42 square kilometers. It is a key industrial park for specialized growth within the provincial “51025” program, with an expected output value of 200 billion Chinese yuan.
The area is one of the initial parks to be awarded the title of a “national new industrialization (equipment manufacturing) demonstration base” by the Ministry of Industry and Information Technology of the People’s Republic of China. It has also been listed as an “International Demonstration City of Clean Technologies and New-energy Equipment Manufacturing” by the United Nations and serves as a demonstration zone for new-type industrialization in Western China.
Zhongjiang Hi-Tech Industrial Park
The Zhongjiang Hi-Tech Industrial Park is both an economic development zone and a high-tech industrial park. It encompasses a county industrial park with a planned area of 14.3 square kilometers and a completed area of 10 square kilometers. Additionally, it includes the Jiqing-Xinglong Industrial Park (also known as Chengdu-Deyang Industrial Park) with a planned area of 33 square kilometers and an initial area of 10 square kilometers.
Within the county industrial park, three primary industries have emerged: food and medicine, electrical machinery, and light textiles. However, there is a strategic focus on prioritizing the development of three industries: electronic information, biological medicine, and new materials.
The Jiqing-Xinglong Industrial Park, on the other hand, is aimed at developing industries such as electronic information, mechanical manufacturing, food and beverages, and home furnishing textiles. The goal is to transform Zhongjiang into a new industrial town in the future.
Deyang-Aba Ecological Economy Industrial Park
The Deyang-Aba Ecological Economy Industrial Park operates as an enclave under the collaborative efforts of Deyang City and Aba Prefecture. It serves as the Sichuan-Zhejiang counterpart support cooperative park, facilitating economic and trade cooperation between Zhejiang Province and the region. Located at the intersection of Deyang and Aba, specifically in Hanwang Town of Mianzhu City, it is strategically situated within the Chengdu-Deyang-Mianyang economic zone. The park is approximately 60 kilometers away from Chengdu and 40 kilometers from Aba. Its planned area spans 20 square kilometers, with an initial area of 10 square kilometers.
Guided by principles of circular, green, and low-carbon development, the Park focuses on the growth of industries such as nonferrous metals processing (new materials), new energy, agricultural and livestock products processing, machinery (electric) processing, medicine, modern logistics, and related sectors.
Opportunities for foreign businesses and investors
All in all, Deyang presents ample opportunities for foreign investors and businesses seeking to establish a presence in China. The city’s geographic location provides access to key transportation networks and enables companies to tap into the vast market potential of Western China. Furthermore, enterprises in Deyang benefit from supportive government policies, streamlined administrative procedures, and a pro-business attitude, which cumulatively work to attract foreign capital.
Given its strong industrial base, particularly in pillar sectors like machinery, electronics, chemicals, and pharmaceuticals, foreign businesses can collaborate with established local enterprises, tap into their advanced manufacturing capabilities, and leverage the city’s skilled workforce.
Deyang also has a vibrant innovation and entrepreneurial ecosystem, which includes research institutes, technology parks, and incubators. Foreign companies can benefit from collaborations with local research institutions, access to cutting-edge technologies, and the potential for joint venture-based technology transfers.
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