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Fujian

  • (1) Recent policies of Fujian to promote inward and outward investment
  • 1) FURTHER IMPROVEMENT OF OVERSEAS INVESTMENT

In April 2014, Fujian Provincial People’s Government issued Several Opinions on Further Promoting Overseas Investment (MZ [2014] No. 113). It proposed six measures for investment promotion: simplifying procedures for overseas investment, simplifying exit examinations, providing more convenient customs clearance measures, improving foreign exchange management for overseas investment, increasing financial sendees, and enhancing fiscal and taxation support.

2) INNOVATION IN INVESTMENT ATTRACTION MECHANISMS

FOR NATIONAL AND PROVINCIAL DEVELOPMENT ZONES AND

INDUSTRIAL PARKS

The Circular on the Eight Measures for Innovation in and Promotion of National and Provincial Development Zones and Industrial Parks (MZB [2015] No. 125) issued by the General Office of Fujian Provincial People’s Government in September 2015 called for strengthening investment promotion through multiple means, and clearly stated that for a new foreign investment project that conforms to the industrial development orientation of the development zones and invests more than RMB500 million in fixed assets (or more than RMB300 million for projects in key counties for poverty alleviation and the former Central Soviet Area), the Fujian Provincial Department of Finance shall provide a subsidy to cover the costs of pre-stage work up to 1/2000 of the fixed assets investment of the project or RMB5 million from 2016. A subsidy of 1-3% of the actual registered capital shall be granted to new projects from Fortune Global 500 enterprises, paid annually by the provincial public finance authorities with the value-added tax, business tax and corporate income tax collected at the provincial level through the county, city or district where the relevant enterprise is located.

3) MORE EFFORTS FOR INVESTMENT PROMOTION

In November 2015, authorized by the Fujian Provincial People’s Government, Fujian Development and Reform Commission, the Foreign Affairs Office of the People’s Government of Fujian Province and the Department of Commerce of Fujian jointly issued Fujian’s Construction Plan for the Core Area of the 21st

Century Maritime Silk Road, proposing that the investment promotion mechanism should be improved to advance inward and outward investment and cooperation and foreign investment should be used in leading industries, high-tech industries, modern services industries, energy conservation and environmental protection. With the Asia Cooperation Dialogue Forum on Belt and Road Cooperation and Asia Business Conference and the China (Quanzhou) Maritime Silk Road International Brand Exposition, and relying on exhibitions such as the China International Fair for Investment and Trade and the Cross-Straits Fair for Economy and Trade and the China Strait Project Achievement Fair, activities themed on the 21st Century Maritime Silk Road (MSR) should be organized to attract more merchants from the MSR countries and regions to expand their economic and trade investment and cooperation. Various types of parks should be encouraged to carry out specialized investment attraction activities and foreign investment projects in line with industrial policy orientation should be guided to the parks. Fujian Province supports local enterprises to seek public offering and financing in MSR countries and regions. Enterprises are encouraged to invest in production bases of competitive products of the light industry, textiles, clothing, household appliances, machinery, ships and IT overseas, and eligible enterprises should be guided and supported to build economic and trade cooperation zones overseas.

4) PROMOTING THE INNOVATION-DRIVEN DEVELOPMENT OF

PROCESSING TRADE

In June 2016, Fujian Province's Implementation Plan for Promoting the Innovation-Driven Development of Processing Trade (MZB [2016] No. 93), issued by the General Office of Fujian Provincial People’s Government, proposed to step up the efforts for investment attraction and promote the integrated development of various industries. In accordance with Several Opinions of Fujian Provincial People’s Government on Encouraging Foreign Investment (MZ [2012] No. 35) and the Circular of Fujian Provincial People’s Government on the Ten Measures to Accelerate the Introduction of Global Top 500 Enterprises (MZW [2012] No. 356), Fujian should make good use of the policies and measures applicable to China (Fujian) Pilot Free Trade Zone, Pingtan Comprehensive Experimental Area and Fuzhou New Area. For projects with a total investment of over USS500 million in Fuzhou, Zhangzhou, Quanzhou, Putian and Pingtan Comprehensive Experimental Area, and projects with a total investment of more than USS 100 million in Sanming, Nanping and Longyan, an investment attraction fund of no more than RMB1 million shall be granted. Foreign-funded enterprises, especially subsidiaries of multinational corporations, are encouraged to set up procurement centers, distribution centers and settlement centers in Fujian, develop headquarters economy and accelerate the integrated development of manufacturing and services. Processing trade enterprises are encouraged to go global and carry out international capacity cooperation. Fujian guides and supports eligible and leading processing trade enterprises to establish overseas industrial cooperation zones in MSR countries and regions. It also supports leading enterprises and associations in processing trade to organize outward investment initiatives based on industrial clusters, and provides financial support for the going-global efforts of processing trade enterprises that meet the requirements laid out in the Administrative Measures for the Special Funds for Overseas Economic and Trade Cooperation of Fujian Province (MCW [2015] No. 30) and the Interim Administrative Measures for the Use of Investment Promotion Funds in Fujian Province (MSWCW [2014] No. 42).

  • (2) Inward and outward investment of Fujian in 2015 and prospects for 2016
  • 1) GROWTH OF INWARD AND OUTWARD INVESTMENT

In 2015, up to 1,689 new foreign investment projects were approved in Fujian, with a total contractual foreign investment of US$14.46 billion, an increase of 70.3% and the highest in 22 years. The actually utilized foreign capital registered US$7.68 billion, an increase of 8%, 2.4 percentage points higher than the national average. A total of 276 overseas investment projects were filed, with a total outward investment of US$4.68 billion, an increase of 68.9%.

  • 2) STRUCTURE OF INWARD AND OUTWARD INVESTMENT
  • i) Utilization of foreign capital. The actual utilization of foreign capital in the service sector grew rapidly and that in the manufacturing sector picked up slightly. First, the service sector actually utilized USS3.24 billion of foreign capital, an increase of 28.5% year-on-year. The fastest growth was seen in information transmission, computer services and software (up 2.2 times to US$280 million), wholesale and retail sales (up 1.6 times to US$910 million), financial services (up 96.6% to US$470 million), and leasing and business services (up 80.4% to US$420 million). Second, the actual utilization of foreign capital in the manufacturing industry reached US$4.15 billion, up 5.8%, 0.3 percentage points higher than that from January to November. Specifically, the actual utilization of foreign capital in the mechanical equipment industry, the oil and chemical industry, the electronics and information industry reached USS710 million, USS480 million and US$330 million respectively, up 23.4%, 43.3% and 3.5% respectively. Third, agriculture, forestry, animal husbandry and fishery actually utilized US$170 million of foreign capital, an increase of 44.1%.

Actual foreign investment from major sources of foreign capital increased generally. Actual investment from the EU, the United States, Japan, the Hong Kong SAR and Taiwan of China reached USS280 million, US$71.17 million, USS120 million, US$4.7 billion and US$1.31 bilhon (including transfers via a third place) respectively. up eight times. 89.4%, 83.9%, 4.1% and 10.3% respectively.

The contractual foreign investment in large-scale projects grew rapidly. A total of 53 new foreign investment projects involved more than US$10 million of investment, making a total contractual foreign investment of US$7.16 billion, an increase of 1.3 times.

ii) Outward investment. Fujian’s investment in BRI countries showed strong momentum. Fujian enterprises invested in a total of 48 projects in BRI countries such as Indonesia, Cambodia, Malaysia, the Philippines, Singapore, Vietnam and Laos, with a total agreed outward investment of US$1.38 billion mainly in the ocean fishing, aquatic products processing, mineral resource development, and float glass production, an increase of 2.7 times year-on-year. Specifically, Fujian enterprises invested 11 projects in Indonesia, with a contractual investment of US$700 million, accounting for 15% of the province’s total, the largest share among all BRI countries.

Investment for international capacity cooperation grew rapidly. A total of 72 projects were filed, involving US$2.27 billion of investment from the Chinese side, twice that of 2014. These include 37 cooperation projects in the manufacturing industry, with a contractual investment of US$700 million, 22 cooperation projects in agriculture, forestry, animal husbandry and fishery, with a contractual investment of US$650 million, and 13 mining projects, with a contractual investment of USS910 million.

The largest share of Fujian’s outward investment flowed into Asian countries. In 2015, Fujian’s OFDI flows to Asia totaled US$1,847 billion, up 1.5 times year-on-year increase, accounting for 67.0% of the total. Other major destinations of OFDI flows include North America (up 1.9 times year-on-year to USS507 million, accounting for 18.4% of the total), Latin America (up 1.7 times year-on-year to US$210 million, accounting for 7.6% of the total), Africa (up 3.1 times to USS110 million, accounting for 4.0% of the total), Europe (up 4.9 times to US$56 million, accounting for 2.0% of the total) and Oceania (up 1.5 times to US$27 million, accounting for 1.0% of the total).

More than 90% of Fujian’s outward investment went to leasing, business services and three other business sectors. In 2015, the leasing and business services industry received US$1,043 billion of OFDI from Fujian, an increase of 1.2 times year-on-year, accounting for 37.8% of the total; the manufacturing industry received US$652 million, registering a year-on-year growth of 3.4 times, accounting for 23.6% of the total; the wholesale and retail sales industry received US$583 million, a three-fold increase from a year earlier, accounting for 21.1% of the total; the transportation, warehousing and postal services industry received USS 134 million, up 1.4 times year-on-year, accounting for 4.9% of the total; and the mining industry received US$87 million, a year-on-year increase of 4.8 times, accounting for 3.2% of the total. These five sectors together received 90.6% of the total outward investment of Fujian, while other sectors received USS258 million, up 76.7%, accounting for 9.4% of the total.

  • 3) PROSPECTS FOR 2016
  • i) Improving foreign capital utilization. First, Fujian Province will strengthen follow-up work and do more to push projects forward. It will continue with the "four point” working mechanism (one project, one leader, one working group, and one work plan) and the investment promotion mechanism at provincial, municipal and county levels, improve the inter-departmental joint meeting system, and strengthen follow-up to push major foreign investment projects forward and expedite transformation and upgrading. Second, Fujian will make good use of the preferential policies applicable to the China (Fujian) Pilot Free Trade Zone and step up publicity and investment promotion. It will continue to track multinational companies and their headquarters in China and adopt flexible and diverse methods to attract investment from them, especially the Fortune Global 500 enterprises, the 100 largest enterprises in Taiwan, China, and industrial leaders from around the world. Third, Fujian will study and issue new policies for the utilization of foreign capital, especially policies that encourage international industrial capital and venture capital to participate in the M&A and reorganization of Fujian enterprises and strive to create a more comparatively advantageous policy environment. Fourth, Fujian will innovate in project planning, strengthen cooperation with industrial authorities and trade associations, and organize foreign investment projects by categories while attracting industry-chain investment and investment from Fortune Global 500 enterprises and the 100 largest enterprises in Taiwan, China. Fifth, Fujian will promote the upgrading of and innovation in development zones. It will advance the land management reform in development zones and guide investment projects from Fortune Global 500 enterprises and other major projects into these zones. It welcomes partners for joint construction and development of these zones. The province will promote the integration and upgrading of special customs supervision areas, guide the circular and sustainable development and enhance the core competitiveness of development zones. Fujian will strengthen targeted guidance, explore and establish the withdrawal mechanism and improve the comprehensive assessment and evaluation system of development zones.

ii) Promoting the sustainable and healthy development of the going-global campaign. First, Fujian will provide better follow-up services for overseas economic and trade parks. It will keep track of proposed industrial parks and parks under construction, report eligible parks to higher-level authorities for recognition as overseas economic and trade cooperation parks, actively disseminate policies that apply to overseas economic and trade parks, guide leading enterprises and eligible enterprises such as Zijin Mining to develop into industrial parks and actively help parks attract investment. Second, Fujian encourages international capacity cooperation. In accordance with the Guiding Opinions on Promoting International Production Capacity and Equipment Manufacturing Cooperation issued by the State Council, based on its situation of surplus capacity, Fujian will guide leading enterprises and trade associations to organize industrial cluster-based outward investment. Third, starting with overseas project contracting, Fujian will advance the exports of building materials and equipment through outward investment and cooperation platforms. Fourth, Fujian will take foreign aid training programs as opportunities to promote economic and trade exchanges

Regional investment analysis report 2015 121 with other countries. Fifth, Fujian will improve the service facilitation system. Focusing on overseas economic and trade cooperation zones, international capacity cooperation and foreign aid training programs, it will revise and improve policies concerning the special funds for outward investment and cooperation and support enterprises to invest in BRI countries.

  • (3) Investment in and from BRI countries in 2015 and prospects for 2016
  • 1) INVESTMENT OF BRI COUNTRIES IN FUJIAN

In 2015, Fujian welcomed 103 investment projects from BRI countries, with a total contractual foreign investment of US$430 million, up 67.8% year-on-year. The actual foreign investment reached US$410 million, down by 34.5% year-on-year.

2) FUJIAN'S INVESTMENT IN BRI COUNTRIES

In 2015, Fujian enterprises invested in 48 projects in BRI countries, with a contractual investment of US$1.38 billion, an increase of 2.7 times over the previous year, three times the average of the province.

3) PROSPECT FOR INVESTMENT IN AND FROM BRI

COUNTRIES IN 2016

In 2016, Fujian will focus on the BRI and the Major Tasks of 2016 Fujian Province Construction Plan for the Core Area of the 21st Century Maritime Silk Road, coordinates between inward and outward investment, make full use of platforms such as the China (Fujian) Pilot Free Trade Zone, overseas economic and trade cooperation zones, foreign aid training programs and trade fairs to gather human, goods, capital and information resource of MSR countries and gradually build itself into a bridgehead for expanding the economic and trade cooperation with these countries. The main measures are as follows:

i) Promoting international capacity cooperation. In accordance with the Guiding Opinions on Promoting International Production Capacity and Equipment Manufacturing Cooperation issued by the State Council, based on its situation of surplus capacity, Fujian will draw up plans for key countries and industries, issue the Guiding Opinions on Overseas Investment and Cooperation for the Core Area of the 21st Century Maritime Silk Road to guide leading enterprises and trade associations to organize industrial cluster-based outward investment. The province will promote the internationalization of enterprises and industries by making good use of the preferential policies and measures for the China (Fujian) Pilot Free Trade Zone in terms of enterprise incorporation, overseas investment, foreign exchange, customs clearance, inspection and quarantine.

It will actively guide overseas investment projects with park-oriented development potential to realize park-oriented development and make overseas economic and trade cooperation zones the main carriers of international capacity cooperation for the province.

ii) Seeking new trade growth. First, Fujian will continue to hold the promotion events targeted at 21st Century Maritime Silk Road for Fujian brands. Fujian enterprises are encouraged to set up marketing centers, operation centers and comprehensive service facilities in MSR countries, organize trade fairs and expos to actively market Fujian’s commodities and expand the scale of trade. Second, starting with overseas project contracting, Fujian will promote the development of overseas contracting projects and labor services by enlarging its overseas contracting teams, improving the quality of the engineering labor force and innovating relevant methods, so as to promote the export from building materials, equipment and machinery enterprises. Third, efforts will be made to expand the import of resource-based commodities and products in short supply for production, living and construction. Fujian will accelerate the building of the “single window” clearance mechanism to create a new model of port customs clearance and a better import environment.

Hi) Giving play to the role offoreign aid training programs. Fujian will strive to increase the number of foreign aid training programs assigned to its relevant training institutions by national ministries and commissions such as the Ministry of Commerce and the International Department of the Central Committee of the Communist Party of China. It will analyze the basic situation and investment and trade needs of the countries and regions where the trainees come from, enhance exchanges with participants from BRI countries and regions and organize matchmaking events with officials and technicians from BRI countries and relevant enterprises in Fujian, so as to promote international trade and inward and outward investment.

iv) Improving the service promotion system. Subsidies will be granted at certain proportions to overseas investment enterprise to cover loan interest, investment insurance premium, resource reshipment insurance premium, intermediary service fees, and other costs of international project contracting and labor cooperation projects. Fujian will actively develop more channels for the cooperation with financial institutions and national funds and broaden financing channels for “going global” enterprises and projects. The province will give full play to the role of professional intermediary agencies to provide enterprises with services on information, laws, finance, intellectual property right protection and certification. The working contact mechanism between the commerce departments of Chinese embassies and the Chinese chambers and associations of commerce, so as to provide information services to Fujian enterprises operating abroad in a timely manner. Fujian will guide enterprises to establish and improve overseas risk early warning, prevention and response mechanisms to

Regional investment analysis report 2015 123 ensure the safety of on-site personnel and assets security while strictly abiding by the laws and fulfilling the social responsibilities in host countries.

  • 8 Xiamen
  • (1) Recent policies of Xiamen to promote inward and outward investment

In recent years, Xiamen has formulated a series of encouraging policies to promote investment and cooperation.

  • 1) DIRECT SUBSIDIES
  • i) Investment subsidy

a Subsidy for investment in Taiwan, China: RMB0.2 per US dollar based on the actual investment remitted to Taiwan, China. RMB0.25 per US dollar for investment in Kinmen.

b Subsidy for investment in BRI countries and regions, namely Iran, Sri Lanka, India, Vietnam, Thailand, Singapore, the Philippines, Indonesia, and Malaysia: RMB0.2 per US dollar based on the actual amount of investment remitted.

c Subsidy for cooperation projects in agriculture, forestry, fishery and mining: RMB0.2 per US dollar based on the actual amount of investment remitted.

d For overseas investment other than the above, a subsidy of RMB0.05 per US dollar shall be provided based on the actual amount of investment remitted.

ii) Upfront costs subsidy. For enterprises engaged in overseas investment (excluding transfer of existing overseas investment stakes between Chinese enterprises) and overseas cooperation in agriculture, forestry, animal husbandry, fishery and mining, the legal, technical and business consultation fees, survey and investigation fees incurred for commissioning qualified professional organizations to get the project approved before the registration (filing) and purchase of resource certificate in the host country or before the contract (agreement) is signed, the costs for the feasibility study report and safety assessment report, purchase of normative documents and bidding document, the information fees for purchase of normative documents and tender documents shall be covered by a subsidy up to 50% of the actual expenses incurred. Each project can only receive this subsidy once. This does not apply to capital increment projects.

Hi) Resource transportation subsidy. If a Xiamen enterprise that carries out overseas resource development and cooperation projects in agriculture, forestry, fishery and animal husbandry seeks to ship equity products it gains from the cooperation back to China, or if a Xiamen enterprise that engages in overseas project contracting would like to ship back resource products that it gains from the project whose total value is below the actual contractual value of the cooperation project, the enterprise concerned will be entitled to a subsidy for up to 50% of the transportation fees and insurance premiums from the project site to a Chinese port, with a cap of RMB1 million a year or RMB2 million a yearfor key projects. The actual amount of resource products shipped shall be determined based on customs records.

iv) Subsidy for the personal accident insurance and work-related injury insurance for overseas project staff. A subsidy is to cover up to 50% of the actual premiums of personal accident insurance and work-related injury insurance for Chinese staff members sent abroad by Xiamen enterprises that engage in overseas investment and cooperation. The maximum insured amount per person is RMB1 million.

v) Subsidy for overseas investment insurance. Up to 50% of the premium of overseas investment insurance shall be covered by subsidy for Xiamen enterprise to carry out overseas investment and cooperation projects.

vi) Subsidies for overseas investment service platform and labor service platform. A subsidy shall be provided to cover up to 50% of the actual expenditure on building the overseas investment service platforms and labor service platforms (including equipment and website building costs, and the like) approved or confirmed by the competent authorities of Xiamen. The subsidy shall cover all such expenditures if a platform is approved designated by the competent authorities of Xiamen to host major events for the promotion of the city’s foreign economic work.

vii) Subsidy for training of outbound labor. The subsidy covers the costs of training programs to help outbound laborers adapt the local environment. It is provided based on the qualifications obtained after the training as approved by the competent authorities and the actual number of people dispatched. For ordinary laborers (e.g., nannies, cleaners, loading and unloading workers, ordinary construction workers and ordinary waiters) the subsidy shall be no more than RMB400 per person; while for high-end laborers (e.g., college graduates or people with higher degrees, or seafarers, cooks, technicians, clerks, flight attendants, management personnel and IT talents), the subsidy shall be no more than RMB600 per person.

viii) Subsidy for overseas emergency response. An overseas emergency refers to unexpected incidents like a terrorist attack or warfare, or other force majeure, which poses threats to the safety of or causes casualty of personnel dispatched by an enterprise engaged in overseas investment and cooperation. Expenses incurred by responses to such emergencies may include the costs of passport and visa application. international travel expenses and incidental overseas expenses of people sent to the site to deal with the emergency. The subsidy amount shall be determined according to the standard for temporary outbound trips for business purposes.

ix) Subsidy for letter of guarantee costs of overseas project contracting. The subsidy covers up to 50% of the charges of letters of guarantee for bidding, contract performance, prepayment, etc.

  • x) Reward for overseas project contracting. Overseas contracted projects whose annual turnover exceed USS50 million are entitled to a lump sum reward of up to RMB500,000, those with an annual turnover between US$25 million and USS50 million are entitled to a lump sum reward of up to RMB300,000, and those with an annual turnover between US$10 million and US$25 million are entitled to a lump sum reward of up to RMB200.000.
  • 2) LOAN WITH DISCOUNT INTEREST

An interest discount shall be given to loans borrowed by enterprises engaged in overseas investment and overseas project contracting for one year or more. The loan may be obtained from a bank in China or from an overseas branch of a Chinese bank by a holding company established by the enterprise abroad; loans for overseas projects of franchised operation may be obtained by overseas project companies from a bank in China or from an overseas branch of a Chinese bank.

The interest discount for RMB and foreign currency loans shall not exceed 50% of the actual interest of the project and for foreign currency loans, conversion shall be based on the middle rate of the People’s Bank of China on December 31 of the year concerned. The discount shall last no more than five years.

3) SUBSIDY LIMITS

The subsidy limits shall be set according to the scale of actual overseas investment of an enterprise in the current year, and an enterprise entitled to less than RMB 10,000 of subsidy shall not be supported.

i) Upper limit of scale-based subsidies. If the accumulative overseas investment of an enterprise in the current year is less than US$50 million, the total amount of subsidy it receives for the year shall not exceed RMB2 million. If the accumulative overseas investment of an enterprise in the current year is more than USS50 million but no more than US$100 million, the enterprise shall receive a total subsidy of no more than RMB3.5 million for the year. If the accumulative overseas investment of an enterprise in the current year is more than US$100 million, the total amount of subsidy it receives shall not exceed RMB5 million.

ii) Subsidy for major projects. Major strategic projects within the BRI framework in Xiamen are not subject to the abovementioned subsidy limits, and each relevant enterprise can receive a total subsidy up to RMB5 million a year.

E-commerce: in accordance with the Circular of Xiamen Municipal People’s Government on Issuing Several Measures to Promote the Development of E-Commerce (XF [2015] No. 67), key e-commerce enterprises which have built or rented warehousing facilities larger than 1,000 square meters each in the previous year with a contract of three years or more to serve as their logistics hub, e-commerce distribution center, overseas warehouse, or bonded warehouse, a lump-sum subsidy of RMB 100 per square meter shall be granted according to the storage area after evaluation and approval, with an upper limit of RMB 1 million for each facility and RMB3 million for each enterprise. If such facilities are in major MSR countries, the subsidy standards shall be raised by 50%.

Cross-border investment and financing: According to the Guiding Opinion of the People’s Bank of China on financial support for the China (Fujian) Pilot Free Trade Zone issued on December 11, 2015, the China (Fujian) Pilot Free Trade Zone has a convertible of capital account within a set limit. Chinese institutions registered in the pilot free trade zone and outside the negative list may carry out cross-border investment and financing activities and voluntary foreign exchange settlement and sales on their own according to the annual cross-border revenue and expenditure as long as the total amount of one single institution does not exceed the limit of USS 10 million.

  • (2) Inward and outward investment of Xiamen in 2015
  • 1) UTILIZATION OF FOREIGN CAPITAL

In 2015, up to 726 new foreign-funded enterprises were established in Xiamen, an increase of 74.1% over 2014, and the contractual utilization of foreign capital was USS4.16 billion, an increase of 45.9% year-on-year and 195.5% of the annual target (US$2.13 billion). The actual utilization of foreign capital was US$2.09 billion, up 6.2% year-on-year, and 100.2% of the annual target (US$2.09 billion).

First, the total foreign capital utilized reached an all-time high. In 2015, Xiamen made a new breakthrough in the use of foreign capital. The contractual utilization of foreign capital reached US$4.16 billion, surpassing the US$4 billion mark for the first time; and the actual use of foreign capital reached a record high of US$2.09 billion, ranking first in Fujian Province.

Second, new foreign investment and capital increment increased substantially. A total of 726 new foreign-funded enterprises were set up in 2015, and the amount of foreign capital utilized was USS2.78 billion, an increase of 31.8% over 2014. During the year, a total of 118 foreign-funded enterprises increased their capital, with a contractual foreign capital of USS 1.29 billion, an increase of 22.2% over 2014.

Third, the modern sendees industry achieved remarkable results in absorbing foreign capital. In 2015, Xiamen’s actual utilization of foreign capital in the primary, secondary and tertiary industries accounted respectively for 0.1%, 37.2% and 62.8% of the total. Specifically, foreign capital in the sendee sector grew rapidly and 682 new service enterprises were set up, with a contractual foreign capital of US$3 billion and USS1.31 billion actually used, up 86.9%, 66.2% and 11% over 2014 respectively. The utilization of foreign capital in finance, investment management, financial leasing, logistics, software and information and tourism further diversified the foreign investment portfolio of the modern services industry in Xiamen.

Fourth, the use of foreign capital in the advanced manufacturing industry further expanded. In 2015, 36 new manufacturing enterprises were set up and the contractual foreign capital utilization amounted to US$1.04 billion, accounting for 25.6% of the city’s total, creating new impetus for advanced manufacturing, especially display panel, mechanical equipment, new energy, new materials and biomedicine.

Fifth, major projects promoted industrial agglomeration and upgrading. There were 137 foreign investment projects over US$10 million in value in 2015, with a total contractual foreign investment of USS3.45 billion, an increase of 25.5% over 2014, accounting for 83% of the total contractual foreign capital in Xiamen. Among them, 108 were key industrial development projects, and the contractual utilization of foreign capital was US$2.96 billion, accounting for 85% of the total amount utilized by the 137 projects over US$10 million in value. In 2015, Fortune Global 500 companies set up two new facilities and increased capital for two projects in Xiamen, with a total contractual foreign capital of US$120 million. The introduction of major projects played an important role in promoting industrial agglomeration and upgrading the industrial structure.

Sixth, the quantity and quality of Taiwan-funded projects improved. In 2015, there were 361 new enterprises (including the third place) established in Xiamen by Taiwan enterprises, with US$870 million of contractual investment and US$370 million of actual investment, an increase of 1.6 times, 99.5% and 61.2% over 2014 respectively. Taiwan investment covered the areas of optoelectronics, medical equipment, auto parts, health, medicine, food, finance, logistics, cross-border e-commerce and quality improvement.

Seventh, foreign capital utilization in the Xiamen part of the China (Fujian) Pilot Free Trade Zone is in good shape. A total of 367 foreign-funded enterprises were set up there, with a contractual foreign capital of US$1.74 billion, accounting for 43.1% of the city’s total. Joint investment promotion produced good results, bringing 218 projects to various districts with a total contractual foreign investment of US$ 1.03 billion, making a contribution of nearly 60% to the pilot free trade zone.

2) OVERSEAS INVESTMENT

In 2015, a total of 132 overseas investment projects were filed in Xiamen City, an increase of 30.7%, with a total contractual outward investment of US$2.19 billion, an increase of 109%. These included US$2.14 billion of investment from the Chinese side, an increase of 112.5%, accounting for 40.7% of the total, and the amount actually remitted from China was US$580 million, an increase of 3.7%. Xiamen enterprises ran a total of 778 overseas investment projects in nearly 60 countries and regions in the world with a total contractual outward investment of US$6.19 billion, including US$5.26 billion from the Chinese side.

First, the total outward investment reached a new high and the gap between inward and outward investment narrowed. After surpassing the US$1 billion mark for the first time in 2014, overseas investment of Xiamen saw a new round of explosive growth in 2015. The total amount of new investment from the Chinese side reached US$2.14 billion, reaching beyond the US$2 billion mark for the first time and accounting for 40.7% of the total. For the first time, overseas investment was higher than foreign capital utilization.

Second, the establishment of overseas enterprises and overseas M&A both increased sharply while capital increment slowed down. In 2015, the enthusiasm for overseas investment remained high with overseas enterprises established and acquired. Xiamen enterprises set up a total of 80 new overseas companies with an investment of US$1.23 billion, an increase of 138%, accounting for 57.5% of the total investment. Specifically, 62 wholly Chinese-owned enterprises were set up with an investment of US$1.05 billion, accounting for 85% of new investment. There were 17 new overseas M&A projects, with an investment of US$620 million from the Chinese side, an increase of 272.7%, accounting for 28.8% of the total. There were 32 capital increment projects, with an investment of US$290 million, a decrease of 31.6% over 2014.

Third, Xiamen’s strength in overseas investment grew significantly, setting a number of records. In 2015, Xiamen enterprises launched 47 new projects involving more than US$10 million of investment, an increase of 67.9%, accounting for 35.6% of all new projects, an increase of 7.9 percentage points over 2014. The investment of these projects amounted to US$1.88 billion. In 2015, 10 new projects involved over US$50 million of outward investment from Xiamen enterprises, and five of them involved over US$100 million of investment. The total investment from the Chinese side of these projects reached US$1.17 billion. Xiamen C&D Corporation Limited invested US$300 million to set up C&D (Hong Kong) Co., Ltd., and this was the large outward investment of Xiamen enterprises to establish new overseas facilities.

Fourth, cooperation in emerging industries strengthened and investment structure improved. In 2015, Xiamen's overseas investment turned from a pattern featuring concentration in commerce and trade to a more balanced distribution among various industries. Xiamen enterprises invested in overseas M&A projects in education for the first time and 92.7% of its outward investment was in wholesale and retail sales, business services, education, manufacturing, and agriculture, forestry and fishery.

  • (3) Investment in and from BRI countries in 2015
  • 1) INVESTMENT OF BRI COUNTRIES IN XIAMEN

In 2015, enterprises from BRI countries invested in 54 projects in Xiamen, up 80% over 2014, with a total contractual foreign investment of US$98.79 million, an increase of 16.5%, and an actual utilization of foreign capital of US$109 million, down by 41.5%. The investment mainly came from developed countries such as Singapore and Malaysia and was mainly put into electronics, machinery, technical services and commercial and trade industries. The proportion of capital increment was relatively large in both contractual and actual utilization of foreign capital in 2015, but there were many more new projects in the leasing and business services industry than before, bringing in more foreign capital.

2) XIAMEN'S INVESTMENT IN BRI COUNTRIES

In 2015, Xiamen enterprises invested in 25 projects in BRI countries, mainly in agriculture, forestry and fishery and the manufacturing industry. The total

Regional investment analysis report 2015 129 investment registered US$460 million, an increase of 8.5 times. They invested USS1 billion in 59 projects in the Hong Kong SAR, mainly in wholesale and retail sales and business services, an increase of 23.7%. Outward investment in Europe and America, US$650 million in total, up 2.4 times, went to 38 projects mainly in manufacturing and business services. There were also five outward investment projects in Africa, mainly in manufacturing and agriculture, forestry and fishery, with an investment of US$210 million, a 25-fold increase.

3) PROSPECTS FOR 2016

In 2016, Xiamen will seize the historical opportunity of a new round of efforts for further opening-up, give play to its advantages in location, economy and trade, history, human resources and culture, accelerate its integration into the BRI and work more closely with East Asia, Central Asia and the Middle East, especially the ASEAN. It will innovate in institutions and mechanisms for opening-up and accelerate the progress of a number of key projects for economic and trade and cultural exchanges. Xiamen will strive toward the forefront of China connectivity, inward and outward investment, trade and finance and marine cooperation with BRI countries and deepen educational, cultural, tourism and people-to-people exchanges with major BRI countries to establish more cordial and stable relationships with them. Efforts to build itself into a strategic pivot city on the MSR will also be stepped up.

 
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