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15 July 2015

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Changsha National High-Tech Industrial Development Zone

 

I.Overview of the Zone 

Changsha National High-Tech Industrial Development Zone, situated in the west urban district of Changsha city, on the west bank of the Xiangjiang River, and the north side of Yuelu Mountain Scenic Area, was founded in 1988. It became one of China’s earliest national-level high-tech industry development zones through the State Council’s approval in 1991, and was approved by the Ministry of Science & Technology in 2009, becoming a national innovative technology pilot zone.

 

In 2011, the whole zone achieved a total technological, industrial and commercial income of RMB150 billion Yuan. The Zone’s comprehensive economic strength and economic aggregate has ascended to the 16th place among the 84 national-level high-tech zones in China, the comprehensive innovation capacity has ranked at the 6th place among China’s high-tech zones, and the Zone has been officially appraised as a national advanced hi-tech zone successively for six years. The Zone now has more than 800 new and high-tech enterprises, of which nearly 200 are foreign-invested,32 are domestic and foreign listed companies, and the pillar industries of electronic information, advanced manufacture, biomedicine, new materials, new energy sources, environmental protection industry and service outsourcing, etc. have been formed already; here are Zoomlion, Jiuzhitan, Mendale, Blue Cat, Longping and many other well-known trademarks famed both at home and abroad; here are the national-level software bases (including the digital media industrial base and the animation industrial base), the new materials transformation and industrialization base (including the advanced battery materials and battery industrial base), the advanced manufacturing technology industrial base (including the sensor technology industrial base), the high-tech products export base, mobile EC demonstration base, the national service outsourcing demonstration base, the housing industrialization demonstration base and Hunan photovoltaic industry base, Hunan environmental protection industry demonstration park, etc. established, and National University of Defense Technology near the Zone is now building the global largest “Tianhe-1” supercomputing center.

 

Luvalley Science & Technology Park (Luvalley for short) is the core park directly managed by the Administrative Committee of Changsha Hi-Tech Zone, with an overall planning area of 117 km2, and at present an infrastructural framework of 21 km2 of the Park has formed already. Situated in the leading area of the“Two-oriented Society” (resources-saving and environment-friendly) and within the comprehensive reform pilot zone of the Changsha-Zhuzhou-Xiangtan city cluster emphatically constructed by the country, it is the high and new technology industry cluster zone, the new-model industrialization demonstration zone and the model region of an ecological new town emphatically constructed by Hunan province and Changsha city, and is mainly divided into the seven major industry functional zones: the Lugu constructed area, the information industry park, the advanced manufacture industry park, the new materials industrial park, the biomedical industrial park, the photovoltaic new energy resources and environmental protection industrial park. The output value of the large-scale industrial enterprises in the Park accounts for 40% of the total output value of Changsha’s large-scale industry. There are 16 Fortune 500 international corporations gathering in the Park: Hitachi, Schlumberger, Yuanda Suzuki, Huarun Group, Nokia, Motorola, Cisco Systems, Dell, Ericsson, Manpower, Itochu, Foxconn, Honeywell, Fuchs,Harris and Siemens.

 

 

Geographic Position 

Luvalley Science & Technology Park has excellent regional conditions, located in the west urban district of Changsha city, on the west bank of the Xiangjiang River, at the north side of Yuelu Mountain Scenic Area, and south adjoining Yuelu Mountain University Town. The Changsha-Xiangtan west line, Changsha-Changde Expressway, the urban western 2nd ring route, the urban 3rd ring route (the west route of the Changsha section of Jingzhu Expressway) run through the Park, and both the metro line 2 and the intercity light rail under construction will have stops to be set up in the Park. It is 10- minute's drive from the biggest commercial center of the city. Now there are 13 bus lines to Lugu, and by means of the advantageous road network, people can quickly access to Beijing-Zhuhai Expressway, Shanghai-Ruili Expressway, National Highway 319 (Xiamen-Chengdu) and National Highway 107 (Beijing-Shenzhen).

 

Industrial Development Scale & Orientation 

Advanced Equipment Manufacturing Industry: Lugu endeavors to build an advanced equipment manufacturing cluster and has already developed the industrial categories of engineering machinery, auto parts, electric transmission and transformation equipment, water pumping equipment, CNC machine tools, etc, and here gathers more than 30 large-scale representative enterprises, such as Zoomlion Heavy Industry Science & Technology Co., Ltd., Changsha Hitachi Automotive Products Ltd., Zhongye Changtian, Goldcup Electric Apparatus Co., Ltd., Xiangdian Changsha Water Pump Factory Co., Ltd., Changsha Cable Accessory Co., Ltd., Jinling Machine Tool Co., Ltd., Osaint Heavy Industry Co., Ltd., and Hunan Nonferrous Heavy Machinery Co., Ltd. etc. Zoomlion Heavy Industry Science & Technology Co., Ltd. ranks at the 10th place in the world top 50 engineering machinery enterprises, leading in the domestic engineering machinery industry. It has acquired the Italian company CIFA, and at present is the world’s biggest concrete machinery manufacturer. Changsha Hitachi Automotive Products Co., Ltd., invested by Hitachi Japan, mainly produces Isuzu series motors, starters and other auto electric parts, supportive to Chongqing Qingling, Dongfeng Aeolus and other companies. Zhongye Changtian International Engineering Co., Ltd. is the general contractor of engineering construction and equipment supplier who has leading predominance in the metallurgical engineering field, and ranks among the leading 20 of China’s engineering general contracting enterprises for a long period. Hunan Nonferrous Heavy Machinery Co., Ltd. is one of China’s biggest mining machinery manufacturers and a leading enterprise for high pressure water jet technology equipments.

 

Electronic Information Industry: Foxconn, Wasion Group, Hunan Electronic Information Industry Group, CEC Software Park, Great Wall Information, Hunan Copote Science & Technology, Talkweb Information, Wuqiang Group and other well-known representative enterprises have congregated here. The network platform software cluster with Copote Technology and Talkweb Information as the leaders, the embedded-type software cluster (mainly oriented towards financial, tax control and electrical self-control areas) with China’s biggest energy measuring instrument supplier Wasion Group and China’s biggest high-tech electronic display equipment supplier Great Wall Information as the core, the medical care information software cluster with Dell Service, Carefx Information, Great Wall Medical Care as representatives, the mobile electronic commerce cluster with Hunan Mobile, Motorola, Hunan Interactive Media as representatives, and other advantageous industry clusters, have been formed.

 

Biomedicine Industry: CITIC-Xiangya, Jiuzhitang Co., Ltd., Double-Crane Medicine Co., Ltd., Anchun High & New Technology Co., Ltd., Fangsheng Pharmaceuticals, Zhonghe Pharmaceuticals, Jinsha Medicine Industry, Zhengzhong Pharmaceutical Machinery, Zhongda Wuma Pharmaceutical Co., Ltd., Changsha Sinocare Inc.,  Sansure Biotech, Argus Pharmaceuticals, Haili Hi-tech, Xingjia Bio-engineering and other biomedicine enterprises allow Luvalley to be the strategic upland for boosting Changsha’s biomedical industry. There, the national stem cell engineering center of CITIC-Xiangya Reproduction & Genetics Hospital headed by Academician Lu Guangxiu possesses the world’s most advanced genetic and stem cell engineering technology; Jiuzhitang Pharmaceutical Co., Ltd. ranks among the top 20 listed medicine enterprises nationwide, with its main production lines having passed the national GMP authentication, and its commercial wholesale and retail having passed the national GSP authentication; Double-Crane Pharmaceutical Co., Ltd., as a modern medicine business logistics enterprise, already become the biggest medicine business wholesale center in Hunan province, which can cover China’s central and southern regions.

 

New Energy Industry: The 48th Research Institute of China Electronics Technology Group, SunZone Optoelectronics, Xiaoxiang Shenguang etc., with their photovoltaic new energy key projects, and other photovoltaic supporting enterprises such as Kunhong Hi-Tech have gathered in Luvalley. There has been formed a rather complete industrial chain of polycrystalline silicon (monocrystalline silicon) – silicon wafer – battery plate – cell module –solar application product and solar power generation system, and the output capacity of crystalline silicon solar energy photovoltaic cell can reach 1000 megawatts. The photovoltaic manufacturing equipment independently developed and produced by the 48th Research Institute of China Electronics Technology Group occupies an 80% share of the domestic solar cell manufacturing equipment market, is the biggest solar cell manufacturing equipment supplier in China; the high-efficient color solar cells produced by SunZone Optoelectronics were used in the China Pavilion at Shanghai World Expo 2010, lending a new limelight to the Chinese pavilion.

 

New Materials Industry: There are more than 50 leading enterprises in the new materials industry, such as Kinray New Materials Science and Techology, Corun, Shanshan Advanced Material, Boyun New Materials, Yuanda Zhugong etc., and three major new materials industrial clusters of advanced cell materials, high performance structural materials and advanced composite materials have begun to take shape, and the Park is a national-level new material achievement conversion and industrialization base. Shanshan’s advanced materials technology of high-energy density lithium-ion battery cathode material and Changsha Hairong’s research and application technology of the graphite material for high-rate lithium-ion battery anode material are at the international advanced level; Corun possesses the first nickel-hydrogen power battery production line in China, with its high strength ultra-intense bonding nickel foam and high temperature ball type nickel hydroxide technologies achieving the international leading level; the output and sale of lithium cobalt oxide battery materials produced by Shanshan New Material ranks third in the world and first in China; the high-performance carbon/carbon composite material developed and produced by Boyun New Materials founded by Academician Huang Boyun, President of Central South University, has filled the national invention void of 6 straight years; Yuanda Zhugong has already been approved by the Ministry of Construction as the demonstration base of housing industrialization.

 

Environmental Protection Industry: Relying on Hunan Environmental Protection Industry Demonstration Park, Luvalley has brought together nearly 100 environmental protection enterprises, of which nearly 70 are large-scale enterprises with an output value of nearly RMB 5 billion Yuan. There are more than 10,000 practitioners of environmental protection holding about 400 patented techniques and utility model techniques of environmental protection, and there are two national-level and provincial-level technological centers. The environmental equipment enterprise cluster represented by Zoomlion Environmental Sanitation Machinery, the online monitoring equipment enterprise cluster represented by Huashijie and Lihero, and the pollution control equipment enterprise cluster represented by Kaitian Environmental Tech., Huashijie, Lulan Desulfuration & Denitrification High-Tech, Jiayu Environmental Protection and Huaneng Group Wellington are formed here, among which Kaitian Environmental Tech ranks 1st in the area of the waste gas treatment of industrial factory buildings in China.

 

Service Outsourcing Industry: The Zone, as the core demonstration Zone of China’s service outsourcing base city, is taking the lead in the development of Changsha’s service outsourcing industry. It has been successively awarded the “National Software Talent International Training (Changsha) Base”, “National Animation & Game Industry Promotion Base”, “Demonstration Park of China’s Service Outsourcing Industry Base City” and other national-level honorary titles. At present, the Zone has already brought together more than 1200 enterprises of software, information service, logistic service, pharmaceutical outsourcing, etc., of which more than 400 have passed the double-software authentication, and nine have passed the backbone enterprise authentication by the Ministry of Science & Technology, and seven have already become public listed companies, and seven have passed CMMI authentication. Now foreign enterprises like Microsoft, IBM, Intel, Dell, Motorola, Compaq, Cisco, Nokia, etc. have already been attracted to form strategic partnerships with backbone enterprises of the Zone. Quite a number of technological centers and joint laboratories including Microsoft mobile animation innovation center, Motorola mobile application technology innovation center and etc. are established, and the role of technological cooperative ties of service outsourcing is ever increasing. The Zone’s animation industry has a distinctive feature - the three cats of “Blue Cat”, “Mountain Cat” and “Rainbow Cat” are well-known nationwide, and Blue Cat’s Mischievous 3000 Questions has set the Guinness World Record for the longest animated cartoon. The logistics and pharmaceutical outsourcing industry have distinct features. China’s first listed supply-chain enterprise Eternal Asia Supply Chain Management Ltd. has been introduced; Changsha Double Crane Medicine Co., Ltd. possesses the biggest medicine sales network and the most advanced modern logistics distribution center of Hunan province. With Changsha Software Park to the core, the Zone has the ITO and BPO professional talent education training base established, especially for the concentrated training of practitioners of information technology outsourcing and business process outsourcing, and more than 10,000 software talents have already been trained.

 

II. Operating Costs 

1. Land, Factory Buildings and Office Buildings 

(1) Project construction permit application fee (calculated according to building area): 42 Yuan/m2 charged preferentially according to the provincial and municipal governments' documents

(2) Factory building construction costs (steel structure, reinforced concrete): 400-800 Yuan/m2; 1000-1400 Yuan/m2

(3) Office building rental, factory building rental: 27-45 Yuan/ m2 per month (including property management fee), 18-25 Yuan/m2 per month

 

2. Public Utilities and Communications 

(1) Water use 

Luvalley has the water supply from Changsha No. 4 Water Plant, with a daily production capacity of 400,000 m3. All the road network of the park is provided with the pipeline of tap water, the pipe diameter varying between DN1000~DN300. The park’s drainage system has rain water and sewage diffluent with the drainage pipes: D2600~D300, and can fully meet enterprises’ drainage requirements. All industrial sewage and domestic sewage are collected by sewage pipes to the sewage plant for centralized treatment, and discharged when they have reached the standard. Yuelu Sewage Treatment Plant has a designed sewage treatment capacity of 160,000 ton/day in the near future, and a long-term capacity of 320,000 ton/day, and the plant has adopted a secondary biological treatment. Enterprises in the park shall meet the national standard for the environmental-protection discharge and pollution control.

Water price (including the charge for sewage treatment):

Domestic water: 1.88 Yuan/ton

Administrative water: 1.93Yuan/ton

Water for Production: 2.20Yuan/ton

Water for Business: 3.40 Yuan/ton

Water for special use: 5.5 Yuan/ton

 

(2) Electricity use 

Four transformer substations have, or will soon be constructed: 110KV Wangxi (2×50MVA), Wangnan (2×50MVA), Qilong (2×50MVA), Jinnan Substation (50MVA), and one Huanghuatang Substation of 110KV~220KV. Dual power supply can be available in the park. Among those substations, Jinnan Substation (50MVA) is the only intelligent-type substation in Hunan province. As regards Hunan’s key projects and symbolic projects of industrialization, the electricity price can be negotiated with the electricity department.

Electricity price:

Residential electricity: 0.588 Yuan/kilowatt-hour

Non-residential electricity: 0.949 Yuan/kilowatt-hour

Electricity for commercial use: 1.03 Yuan/kilowatt-hour

General industrial electricity: 0.757 Yuan/kilowatt-hour

Large-scale industrial electricity (10KV power supply): 0.639 Yuan/kilowatt-hour

 (110KV power supply): 0.582 Yuan/kilowatt-hour

 (220KV power supply): 0.558 Yuan/kilowatt-hour

 

(3) Natural Gas 

Changsha Natural Gas Corporation has a natural gas storage and distribution station constructed in Luvalley. Gas pipelines are constructed suitably for all the main roads inside the park, and a circular pipeline network is formed, and will fully meet the demands for natural gas of enterprises in the Park. The pipe diameters of the pre-embedded gas pipeline network in Luvalley are: Lugu Avenue φ377 and Xianjiahu Road φ160.

Natural Gas Price:3.00 Yuan/m3 

3. Transportation  

(1) Water transport 

Changsha Xianing New Port has an annual throughput of 102,000 standard containers. The total freight for transporting one 20ft container of common goods (including domestic carriage) as shown in the following table: (November 2010)

Port of Arrival 

Shanghai 

Hong Kong  

Los Angeles  

Osaka  

Hamburg  

York 

Freight
(Yuan)
 

2,450 

6,150 

14,500 

4.360 

16,000 

20,500 

Time
(Day)
 

4 

10 

21 

8 

36 

31 

The price may fluctuate 30% per month

(2) Freight to Beijing: 6500 Yuan/container, time: 2 days;

Freight to Shanghai: 5500 Yuan/container, time: 2 days;

Freight to Guangzhou: 4500 Yuan/container, time: 1 day;

(3) Railroad

Freight to Shanghai: 3156 Yuan/container, time: 4-7 days;

Freight to Guangzhou: 2261 Yuan/container, time: 3 - 4 days;

(4) Aviation

Domestic:

10-20 Yuan within 0.5kg, and 4-10 Yuan shall be charged for every additional 0.5kg, time: 2 - 5 days

International:

130-190 Yuan within 0.5kg, and 30-45 Yuan shall be charged for every additional 0.5kg, time: 2 - 7 days

 

4. Labor Force and Technological Innovation 

Luvalley, adjoining Changsha Yuelu University Town, takes advantages of scientific and technological resources of four national “211 Project” key universities including National University of Technology Defense, South Central University, Hunan University and Hunan Normal University, of more than 40 higher institutions, over 120 scientific research institutions, 47 national and ministerial key laboratories, and the advanced talent resources foundation of 46 academicians, 340,000 technological personnel and 330,000 college students, especially sound in respect of advanced manufacture, bioengineering, electronic information industry, new materials, new energy sources, and software etc.

 

There are 25 technical and engineering centers ranked among national and provincial levels, 17 enterprise postdoctoral scientific research workstations, and more than 400 joint R&D institutions, which continuously inject new vitality to independent innovation. Enterprises in the park have accumulatively developed more than 1800 new and high-tech products and items, 85% of which have independent intellectual property, 115 items are listed into the national and provincial “Torch Plans”. There are also nine National chief scientists for “973 Plan” project, 16 National experts for “863 Plan”, and 19 young and middle-aged experts with outstanding contributions to the country.

 

Besides, famous experts represented by a group of academicians such as Yuan Longping, Lu Guangxiu, Huang Boyun etc. have converged in the Zone, which makes Luvalley become a great platform for technological fruits to be converted and talents to establish their businesses, and the sci-tech innovative capacity of the Zone has continuously been ranked in the leading position among national-level high-tech development zones.

 

In order to meet the demands of enterprises in the park for talents, the Administrative Committee of the Zone has established the talent exchange center, and regularly dispatches personnel to different places nationwide or holds talent recruitment activities in Changsha, to attract talents and introduce intelligence. The Administrative Committee of the Zone regularly holds talent training activities such as “Luvalley Lecture Hall” and other various forms, and invites domestic and foreign famous institutions and experts to give lectures in the park.

 

(Attached are the employee annual salary table of enterprises in the Zone and the labor cost table including social insurance necessary for enterprises to assume)

 

Referential monthly salary:

Job Position 

Monthly Salary (RMB Yuan) 

Senior Manager 

1,800-6,000 

Manager 

1,500-3,500 

Technical Personnel 

1,500-3,400 

Production Operation Worker 

1,200-2,200 

 

Rate of social insurance: (the proportion to total wages)

Pension: 20%; Healthcare: 7%; Unemployment: 1.5%; Maternity: 0.6%; Work-related injury: 0.5%-1.5%

Changsha Housing Fund Management Center requires that, if the monthly contribution rate of any entities and employees is less than 5%, it shall be adjusted to 5%; in case the monthly contribution amount is less than 80 Yuan, it shall be adjusted to 80 Yuan in principle, namely the total monthly contribution amount is no less than 160 Yuan.

 

5. Education, Healthcare and Commercial/Residential Facilities 

Educational Institutions: Central South University, Hunan University, Hunan Normal University, Hunan Business College, Hunan International Economics University, Changsha Industry and Commerce Vocational School, Mingde High School, the High School Affiliated to Hunan Normal University, the High School Affiliated to Hunan University, ChangJun Experimental School, Yanfeng High School, Lushan International Experimental School (the designated school for foreign businesspersons’ children to attend), Luvalley Elementary School, etc.

 

Medical Institutions: The Third Xiangya Hospital of Central South University (the designated medical care hospital for foreign businesspersons), the Forth Hospital of Changsha, Changsha Gaoxin Hospital, Hunan Chinese Medicine Research Institute, Police Hospital, Aerospace Hospital, Lujing Community Medical Station, etc.

Commercial/Residential Facilities: Yuelu Mountain Villa (the designated service institution for foreign businesspersons), Polly · Luvalley, Meilin Silver Valley, JunYuan Plaza, Gonghe Shijia, Luvalley Jin Garden, Shanshui Yinglun, Biaozhi·Luvalley, Rhine Town, Xianglu International, Yuanda · Lu Garden, California Sunshine, Hengda Mansion, QinYuanchun · Royal Garden, Xishan Huijing, Green Star City, Changfang Xijun, etc.

 

Hotels, leisure recreations: Longhu Golf Course, Puri Resort Hotel, Xianglu Mountain Villa Hotel, New Empire Hotel, Jasmine International Hotel (the location of Changsha Foreign Friends Club), Haitian Hotel, etc.

 

Industrial Supporting Facilities: Eternal Asia Supply Chain Integration Center, Double Crane Medical Logistics Park, Schenker, Luvalley International Industrial Park, Datao Technology Industrial Park, Changhai Industrial Park, etc.

Office and Factory Building Rental Facilities: Changsha Software Park, Changsha CEC Software Park, Luvalley Information Port, Chuangye Building, Changhai Industrial Park, Torch City, Juxing Incubation Base, Changsha Productivity Promotion Center, Oak Park, Yannong Business Building, etc.

 

The Administrative Committee of the Zone comprehensively executes all favorable policies for national-level hi-tech zones and specially enjoys the favorable policies of Changsha Dahexi Pioneer District, and provides high-quality and efficient services to enterprises.

 

1. The income tax of high-tech enterprises in the Zone shall be levied at a reduced rate of 15% from the date of their ratification.

 

2. The Administrative Committee finance annually arranges 200 million Yuan industrial development dedicated fund to support key pillar industries, characteristic industries and technical innovation projects, and annually arranges 20 million Yuan dedicated fund to specially support the service outsourcing industry development.

 

3. To any production and management enterprise with one-off fixed assets investment over RMB 500 million Yuan in key electronic information, equipment manufacture, new materials industries, after the project is put into production, according to its contribution to the finance and taxation of the Zone, the Zone may grant a fund of 10% or above of its fixed assets investment for industrial development.

 

4. To any kind of enterprise headquarters or regional headquarters that have no production base established in Luvalley since 1 January 2008, if their annual taxation amount is above RMB five million Yuan (inclusive of RMB five million Yuan), within 3 years from the operation date, in consideration of their financial contribution as confirmed, the Zone may give a reward between 10%-40% of the portion of their tax contribution that has been actually received by the Zone.

 

5. To any World Top 500 enterprise or China Top 100 enterprise which enters Luvalley to engage in electronic information, equipment manufacture, new materials industrial R&D and production or to set up enterprise headquarters or regional headquarters, considering its brand influence, investment scale and output benefit and other conditions, the Zone may give them a one-off 500,000 to 1,000,000 Yuan fund for supporting their industrial development.

 

6. As for the individual income tax paid by senior managers of the enterprises, enterprise headquarters, or regional headquarters indicated in the above clauses 3, 4, 5, and 50% of the portion actually received by the district level finance may be rewarded to them within 3 years from the taxation date; as for those who purchase housing in Luvalley for the first time, 100% of the portion of the individual income tax actually received by the Zone finance of three years prior to the housing purchase may be rewarded to them, but the maximum reward shall not exceed 80% of the housing price.

 

7. In consideration of the newly added taxation of any loan-granted enterprises, the Zone may grant a loan interest subsidy not exceeding 40% of the bank loan interest amount, but the total interest subsidy amount obtained by one and the same enterprise that is offered by governments at all levels, maximally shall not exceed 100% of the loan interest amount.

 

8. The formality charge-free management is practiced to high-tech enterprises in the zone; this means that enterprises will not pay any fee other than tax.

 

9. The Customs provides efficient and convenient customs clearance measures, such as pre-arrival declaration, networking declaration, expeditious declaration, visit examination/acceptance, expedited customs clearance, guaranteed acceptance and so forth, to enterprises in the Zone.

 

Please see the Policies Collection of Changsha Hi-Tech Zone for the details of preferential policies.

 

Source: 2012 Investment Guide from Changsha National High-Tech Industrial Development Zone