Investment Opportunities in Ningbo, China
Located midway along the coastal line of the Chinese mainland, Ningbo serves as the economic center for the southern Yangtze River Delta. The city covers a land area of 9.8 km2 with an urban resident population of 9.7 million. According to the 2013 Ranking of Urban Competitiveness in China by Shanghai University of Finance and Economics, Ningbo ranks among the top five most competitive cities in China.
Given its geographic advantage, Ningbo is an important traffic hub and is now connected to adjacent regions with three major bridges. The city benefits from a multifaceted transportation system based on coordinated development of sea, land and air channels. Currently,Ningbo is constructing its own urban transit system, expected to cover the whole urban area.
Ningbo has witnessed continuous and rapid economic development in the wake of Chinese economic reform and has been described by the UN as the most promising city in China.
In 2013, Ningbo’s GDP exceeded RMB 712.89 billion (US$115.12 billion) and grew at an annual rate of 9.26 percent—the city’s primary industry contributed RMB 276.4 billion and its secondary industry, RMB 374.17 billion (8.2 percent growth). The remaining RMB 311.08 million came from the service sector, which grew 8.8 percent annually.
The economy of Ningbo is built upon strong industrial foundations and a favorable investment environment, as well as an active private economy. In 2013, the city’s gross industrial output reached RMB 337.8 billion (8.4 percent growth). Major contributors include the city’s modern agriculture and advanced manufacturing industries; more recently, a modern service industry has also been established. Ningbo’s highly developed private economy creates about 80 percent of the city’s total GDP.
Ningbo’s main development zones include:
- Ningbo Economic & Technical Development Zone
Approved by the government in 1984, the Ningbo Economic & Technical Development Zone (NETD) is one of the largest and earliest national development zones in China. The NETD is located on the east coast of the city and covers an area of 614 km2. As an advanced manufacturing base, the NETD’s four pillar industries include petrochemical, equipment manufacturing, auto parts and new clean energy.
- Ningbo Daxie Development Zone
Approved in 1993, the Ningbo Daxie Development Zone covers an area of 5.92 km2 and enjoys state-level preferential policies. Over more than ten years of development and construction, industrial and logistical foundations have been established in the zone for the transshipment of energy, liquid chemicals and containers.
- Ningbo Free Trade Zone
The Ningbo Free Trade Zone (NFTZ)—comprised of the Ningbo Export Processing Zone and Ningbo Bonded Logistics Zone—is the only free trade zone in Zhejiang Province. Approved in 1992, the NFTZ covers an area of 2.3 km2. Major industries include international trade, advanced manufacturing and logistics. Since its foundation, the NFTZ has become an advanced production manufacturing base and the center of modern logistics in Zhejiang Province.
- Zhenhai Economic Development Zone
Approved by the Zhejiang Provincial Government in 1992, the Zhenhai Economic Development Zone consists of four industrial parks, namely, the Precision Machinery Industrial Park, High-Tech Industrial Park, Fine Chemicals Industrial Park and Storage & Logistics Park.
- Ningbo National Hi-Tech Industrial Development Zone
Approved in 1999, the Ningbo National Hi-Tech Industrial Development Zone covers an area of 18.9 km2 and was upgraded to the national level in 2007. Based on its IT, green energy and lighting industries, the Hi-Tech Zone has attracted more than 70 enterprises with an annual turnover of over RMB 10 million.
- Meishan Free Trade Port Zone
The Meishan Free Trade Port Zone, approved in 2008, was the fifth bonded port in China, with a planned area of 7.7 km2. Major industries include international trade, modern logistics and modern service. The Zone provides high-level preferential policies, including harbor entrance bonding for foreign goods and tax exemptions.
With the unique policies and highly effective services provided by the provincial government, Ningbo is becoming more and more attractive to investors, both domestic and international. To date, over 60 domestic and foreign-invested banking and financial organizations have been established in Ningbo.
Ningbo has formulated specific policies on key investment projects and offers differentiated policies on a case-by-case basis. Encouraged sectors include:
- International Trade
- New Strategic Industries
- Manufacturing Industry
- Information Service
- Creative Industry
Moreover, Ningbo is home to a professional talent base, built up using various initiatives to attract overseas talent. Compared with other major cities in China, labor costs in Ningbo are lower. Its favorable investment environment has attracted over 4 million people to work in the city, including over 10,000 foreigners.
The Ningbo Free Trade Zone (NFTZ) has rolled out various policies to support foreign investment. Eligible goods, such as imported equipment, spare parts, building materials and office facilities are exempt from import duty and import-related value-added tax (VAT). Imported raw materials may be bonded in the NFTZ. Major preferential tax policies for FIEs operating within the NFTZ include:
- A reduced corporate income tax (CIT) rate of 15 percent
- FIEs with an operating period of more than 10 years will be exempt from CIT for the first two years of operations, and eligible for a 50-percent reduction for the 3 years of operations following the FIE’s first profitable year.
- VAT refunds for export products made using Chinese materials or Chinese equipment
Moreover, fiscal support will be provided for manufacturer projects related to advanced technology research.
For more information about investment opportunities in Ningbo, you can contact Ken Chen at the Ningbo Foreign Investment Development Board.
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