BRILLIANT PROSPECT OF KHORGOS ECONOMIC DEVELOPMENT ZONE, YILI, XINJIANG

Written by: Han Qinyan
Posted on: December 04, 2012 | | 中文

Projects with an overall investment of over RMB 20 billion have now been provided for the Chinese Sector of the Sino-Kazakhstan Khorgos International Border Cooperation Center. Included in the project are service facilities, such as an exhibition center, various kinds of markets, and hotels, which will epitomize the development of regional economic integration at a higher level and foreshow the new stage of the rapid development of the Khorgos Economic Development Zone (KhEDZ).

On ceremony of closing service at Sino-Kazakhstan Khorgos International Frontier Cooperation Center

What does this mean to the KhEDZ? I interviewed the local experts and scholars in Xinjiang. And I found that they are all confident of its prospects and of the contributions the zone is expected to make for the benefit of both countries.  

Prof. Abuduslim Abulikem, vice dean of the College of Finance and Trade of the Xinjiang University of Finance and Economy, and also vice director of the Research Center of Central Asian Economy and Trade, said, “Khorgos possesses several advantages. First of all, it has the strategic advantage. Xinjiang has been included as one of the key regions for the future development of China and Khorgos is defined as the trading hub connecting the Central Asian countries and Xinjiang. The development of Khorgos is indispensable to the support of other parts of the country.

Export freights

“Xinjiang has been endowed with many a preferential policy. In recent years, a series of such policies have been issued by the central government concerning the construction of the International Border Cooperation Center, including the document “Opinions on Supporting Kashgar and Khorgos Economic Development Zones” of the State Council, which is very significant and well-targeted. Secondly, Khorgos enjoys a unique regional advantage. Among the seven ports of China open to Kazakhstan, Khorgos enjoys the most favorable condition and location. In particular, the State Council issues many substantial and specific preferential policies in credit, taxation and industry development, which are appealing to investors at home and from foreign countries.”      
       
Li Qin, an associate professor and the head of the Teaching and Research Department in the College of Finance and Trade stated:

“Khorgos EDZ has wonderful prospects. The Sino-Kazakhstan Khorgos International Border Cooperation Center in particular is a pilot field like Shenzhen which started its opening many years ago. If it succeeds, the experiences that it gains will be spread over a wider arena.”   

The International Border Cooperation Center is an important component of the Khorgos EDZ, and the preferential policies enjoyed by the Zone are applicable to it as well. There are several highlights worth discussing, as elaborated below.
 
The Policy of Enterprise Income Tax Law?The key enterprises in KhEDZ and those which are encouraged to develop in the Zone will enjoy tax exemptions for 5 years. Similar enterprises in other parts of China are exempted from income tax in the 1st and 2nd years and allowed a 50% reduction in the 3rd to the 5th years. In other words, Khorgos EDZ is more advantageous than other economic development zones of the country in terms of tax exemption policies.
 
Tax Reimbursement for Export?A special supervision policy of customs territory is implemented at the center. Customs territory means that once the Chinese products are inside the center, they are regarded as exports and enjoy preferential policies set for export products. Also, the can be refunded in advance although they are still within Chinese territory.
 
Tax exemption of RMB 8,000?The amount of tax exemption at the center is RMB 8,000 per person each day while that of Hainan is RMB 5000 per person twice a year. The exemption reduces the amount of value added tax which the enterprises have to pay in export and import.

Policy Concerning Vehicles Made Abroad?In the past the ports enjoying this policy were those in the coastal areas of China, such as Shanghai, Guangzhou, Shenzhen and Ningbo as well as Manchuria, the only land port of the country. In the future, vehicles made in Europe will be imported via Khorgos from Europe to China. It will be benefited by some special policies. First, the price of vehicles sold in Xinjiang will be reduced. Second, Xinjiang will become the transit through which imported vehicles are to be sold to inland China. This will promote the trade of vehicles in Xinjiang.
   
Shen Liping, an Associate Professor and the director of the Research Department of Economics and Management at the Party School of Ili Kazakh Autonomous Prefecture, believes that the utmost aim of China in constructing the Khorgos EDZ is to promote the rapid development of the local economy. What is most important for us is to work on this aim. As the orientation of the Khorgos EDZ is now clearly decided by the state, the key point that we shall observe is how to make full use of the preferential policies of the State Council and the location advantages of the Port according to the national planning and layout of industry development; in addition, we shall also focus on working in a well-grounded manner so as to realize the targets of development, which require us to turn the good policies to good development.
 
With the launch of the Center and the connecting of the Sino-Kazakhstan railways, the development curtain has been opened. And as one of the most important projects of supporting Xinjiang development, the construction of the Khorgos EDZ has obtained the support of other provinces and cities of the country. For example, Suzhou City of Jiangsu Province contributes to the construction of the Industrial Zone; Lianyungang City of Jiangsu Province and Manchuria of Heilongjiang Province provide assistance in the construction of the port; and Shaoxin City of Zhejiang Province offers support in city planning. With their support, Khorgos EDZ has witnessed remarkable changes, and Khorgos as a pearl on the Silk Road, will surely become the new focus of the attention of the country and the world.     

TO STRIVE FOR SUSTAINABLE DEVELOPMENT: A BOOMING OASIS CITY ON THE SILK ROAD

This article was first published in Youlin-Good Neighbours, Issue No. 3