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Profiles of Six Provinces | Investment Policy
Investment Policy

Anhui Province

Province Profile

Named after the first Chinese characters of the two prefectures Anqing and Huizhou, Anhui Province was set up in 1667. It is also called Wan for short because of Wan Kingdom in history and Mt. Wan in the province. Under the jurisdiction of Anhui, there are 16 prefecture-level cities, 6 county-level cities, 55 counties, 44 urban districts, 246 sub-districts and 1,242 towns, with a total population of about 70.27 million by the end of 2016.
Located in the east of China’s central region, along the Yangtze and Huaihe rivers and close to the coastal areas, the province joins the south to the north of China with easy access to the east and the west. Covering 140,100 square kilometers in total, the province is geographically divided by the two large rivers into three parts from the north to the south, namely Huaibei Plain, Jianghuai Hills, and Wannan Mountainous Area. The Yangtze River flows about 400 kilometers across the province, the Huaihe River, about 430 kilometers and the Xin’an River, 242 kilometers. Chaohu Lake, one of the top five freshwater lakes in China covering a water area of 800 square kilometers, is located in Hefei, the capital of Anhui Province. Anhui is a role model in the beautiful China.
Anhui is an origin of pre-historic civilization, an important platform for the evolution of the Chinese civilization and a land of humanistic Chinese culture. The province has witnessed the emerging of Taoism, Jian’an Literature, Tongcheng School, Neo-Confucianism in the Northern Song Dynasty and Huizhou Culture. There have emerged a galaxy of historical notables such as Lao Tzu, Chuang Tzu, Guan Zhong, Cao Cao, Hua Tuo, Bao Zheng, Zhu Yuanzhang, Li Hongzhang and Hu Shi. The Taoism originated in the Huaihe River basin represented by LaoTzu and Chuang Tzu, together with Confucianism, constituted the two pillars of China’s traditional culture. Huizhou Culture was the most influential cultural genre in the Ming and Qing dynasties and known for the remarkable development of philosophy, literature, medicine, architecture, and art. Huizhou Culture, Tibetan Culture and Dunhuang Culture are considered as the three major regional cultures in China. Huizhou Opera is believed one of the main origins of Peking Opera. Huangmei Opera is called Chinese country music opera, Nuo Opera popular in Chizhou is known as the living fossil of drama and the Flower-Drum Dance prevailing on the banks along the Huaihe Riveris hailed as “the oriental ballet”.
With world-famous merits in morality and conduct, Anhui is inherent in innovation and creation. It is a pilot province in the innovation drive in China. Hui Merchants active in the Ming and Qing dynasties created an advanced business mode and became an influential business group in China at that time by adhering to the belief of integrity, diligence and innovation. In the 1970s, Xiaogang Village in Fengyang adopted a household contractsystem that initiated the rural reform in China.
Being in full swing of innovation and creation, Anhui is now a pilot province that has implemented the national systematic and comprehensive innovation reform.The province has 109 universities, 23 national key engineering laboratories, 34 national engineering and technological research centers,over 4,800 R&D institutions, and more than 3 million professionals. Anhui ranked first in the growth rate of China-awarded patents in the past two consecutive years, and Hefei, capital of Anhui, is the first pilot city for new-type sci-tech innovation in China and the second most densely populated city of national big science projects, second to Beijing. Moreover, it is the second national scientific center formally approved by the central government to be built. Quess, or the world first quantum satellite named after"Mo-tse", was successfully developed by the Anhui-based University of Science and Technology of China, and the Hefei-Shanghai section of the Beijing-Shanghai trunk line, part of the world first quantum secure communication network, was opened successfully, all of which marked the significant position of Anhui in the general layout of China’s innovation.
Charming Anhui welcomes the guests from all over the world. The innovative Anhui attracts the attention of the world. In total, 77 Fortune Global 500 enterprises overseas have invested in Anhui and Anhui is now trading with 220 countries and regions. So far, the province and its cities have established sister province (city) relationship with 87 provinces and cities in 35 countries.
There are new changes every day in Anhui. During the 12th Five-Year Plan period (2011-2015), the average annual economic growth of Anhui was 10.8%, 3% higher than the national average, ranking first in the central region of China, the average annual growth rate of industrial added value created by large-scale enterprises was 14.1%, ranking first in the central region of China and the local innovation ability ranked first in the central region of China for four consecutive years.
In 2016, the province’s total production value reached 2,411.79 billion yuan, with an increase of 8.7%. The fiscal revenue was 437.3 billion yuan, increased by 9%, in which local fiscal revenue was 267.3 billion yuan, up 8.9%. The investment in fixed assets reached 2,675.81 billion yuan, with an increase of 11.7%. The total retail sales of social consumer goods reached 1,000.02 billion yuan, with an increase of 12.3%. The import and export value reached USD44.38 billion, and the actual use of foreign direct investment reached USD14.77 billion, increasing by 8.4%.

 

Development Strategy

Anhui is an important constituent part of the Yangtze River Economic Belt and the Yangtze River Delta city cluster, an important hinterland province and transport hub for the Belt and Road Initiative, and one of the most innovative and opening regions in China. The province is the frontier of opening China.
When visiting Anhui in April 2016, President Xi Jinping pointed out, “Anhui stands on a new historical starting point for its development. Anhui promotes green development, has good foundation for low-carbon development, and pushes forward in-depth reform. As an inland province, Anhui aggressively opens up to the outside world, implements innovation-driven development strategy, and has advantages for industrial upgrading. Anhui leadership should further emancipate the mind, make intensified efforts and work in a pioneering and innovative way to find a new path in the rise of China’s central region and create a better future.”
For the implementation of China’s regional development strategies, Anhui takes an active part in the fulfillment of the B&R Initiative, in the Beijing-Tianjin-Hebei regional development and the development of the Yangtze River Economic Belt. It also actively carries out the development strategies for the Central Plains Economic Zone and the Southern Anhui International Culture and Tourism Demonstration Zone, and accelerates extensive exchanges and in-depth cooperation with countries all over the world. In addition, Anhui persists in the integrated development of the Yangtze River Delta and strives to turn itself into a new high ground for opening up.
Anhui Province has issued an action plan for its innovative, synergetic, green, open and shared development. It has chosen 36 key projects for this purpose and set up a goal for a continuing healthy and rapid economic development in the next 5 years, striving to raise its total output value to four trillion yuan, with the leading indicator progress, development quality and benefit being in the forefront of China. Anhui has decided to reward no less than 70% of the gains from the commercialization of research achievements to those personnel and work teams who contribute to the project. It will push forward the reform of streamlining governance, delegating authorities and focusing on service, and give priority to the enrichment of project data bank for the action plan. Moreover, it will implement the “four-stage supervision and guarantee system”, i.e. supervision over new projects and guarantee construction-start rate, supervision over projects under construction to guarantee completion rate, supervision over completed projects to guarantee production capacity realization rate, and supervision over reserved projects to guarantee commercialization rate.
Anhui has systematically carried out its overall pilot work in innovation and reform, and accelerated the construction of the national Hefei-Wuhu-Bengbu innovation demonstration zone and the national Hefei science center. It has vigorously promoted the construction of majoremerging industrial bases for new display, robot, intelligent speech technology, and new energy vehicles, enhanced the promotion of major emerging industrial projects for aircraft engines, gas turbines, terahertz, accurate modern medical equipment, and biobased materials, and furthered preparation for special projects for emerging industries such as future network, artificial intelligence, genetic engineering and quantum information. The province is now in the making of an innovative modern industrial system, and in the process of speeding up the transformation of strategic emerging industries into leading industries.

 

Open Platforms for Cooperation

Anhui steadfastly implements the opening up strategy and actively participates in the fulfillment of the Belt and Road Initiative. It strives to set up a national experimental free trade zone and upgrades the Sino-German(Anhui) Cooperation Industrial Park. In Anhui, there are provincial development zones in every single city, county and urban district, with 21 being national development zones, including 12 national economic and technological development zones (ranking the province first in the central and western regions of China and fourth in the whole of the nation), 5 national high-tech zones, 3 comprehensive bonded zones, and an export processing zone. In addition, Anhui has 10 export bases for mechanical and electrical products, 4 export bases for high-tech products and 11 first-class and second-class ports.

 

Innovative Development
As the most precious and the most advantageous gene of Anhui Province, innovation has already become the most powerful engine of accelerating the economic development of Anhui Province. Besides, innovation is both the lettered signboard of demonstrating the beautiful image of Anhui Province and the window of the distinctive features of epochal progress in Anhui Province.
Anhui has made firm efforts in carrying out the strategy of innovation-driven development these years. By focusing on building a scientific center, developing three industries and one innovative industry as well as adhering to reform of comprehensive innovation, innovation in technology, industry and policy has been promoted in full scale. Traditional manufacturing industry has been greatly promoted by developing high-end manufacturing, intelligent manufacturing, environment-friendly manufacturing, high-quality goods manufacturing and service-type manufacturing and accelerating the usage of new techniques, new business type and new modes in upgrading eight traditional industries such as steel, non-ferrous metal, chemical, construction material, textile, food, electric power and coal. Strategic new industries have been fast developed and strengthened by building 24 strategic new industry clustering base and building two No.1 Projects of National Quantum Information Laboratory and JAC-Volkswagen Cooperation.

The First Batch of 14 Strategic Emerging Industrial Clustering Development Bases
Hefei Xinzhan Zone New Flat Panel Display Industrial Clustering Development Base,
Hefei Hi-Tech Zone Integrated Circuit Industrial Clustering Development Base,
Hefei Hi-tech Zone Intelligent Speech Technology Industrial Clustering Development Base,
Hefei-Wuhu New Energy Vehicle Industrial Clustering Development Base,
BozhouQiaocheng Economic Zone Modern Chinese Medicine Industrial Clustering Development Base,
Bengbu Silica-based New Material Industrial Clustering Development Base,
FuyangTaihe Economic ZoneModern Pharmaceutics Industrial Clustering Development Base,
Chuzhou Economic Zone Smart Home Appliances Industrial Clustering Development Base,
Ma’anshan Economic Zone Advanced Rail Transit Equipment Industrial Clustering Development Base,
Wuhu Jiujiang Economic Zone Robot Industrial Clustering Development Base,
Wuhu Sanshan Economic Zone Modern Agricultural Machinery Industrial Clustering Development Base,
XuanchengNingguo Economic Zone Core and Basic Machine Parts Industrial Clustering Development Base,
Tongling Economic Zone New Copper Material Industrial Clustering Development Base,
Anqing Hi-Tech Zone New Chemical Material Industrial Clustering Development Base.

The Second Batch of 8 Strategic Emerging Industrial Clustering Development Bases
Hefei Hi-tech Zone Biological Medicine and High-end Medical Equipment Industrial Clustering Development Base,
Hefei Baohe Economic Zone Creative Culture Industrial Clustering Development Base,
HuaibeiSuixi Economic Zone Aluminum-base High-end Metal Materials Industrial Clustering Development Base,
Suzhou Hi-tech Zone Cloud Computing Industrial Clustering Development Base,
Huainan Hi-tech Zone Big Data Industrial Clustering Development Base,
Lu’an Huoshan Gaoqiaowan Modern Industrial Zone High-end Equipment and Basic Machine Parts Industrial Clustering Development Base,
Chizhou Economic Zone Semiconductor Industrial Clustering Development Base,
Huangshan Modern Service Industrial Zone Culture and Tourism Industrial Clustering Development Base.

Pilot Development Bases
Wuhu Xinwu EconomicZone General Aviation Industrial Clustering Pilot Development Base,
Ma’anshanBowang Hi-TechZone Hi-end CNC Machine Tool Industrial Clustering Pilot Development Base.

Favorable Policies and Incentive Measures
According to the Implementation Plan for Promoting Supply-Side Structural Reform of Anhui Province, various policies and measures will be taken in our province reduce cost. By 2018, the comprehensive cost of enterprises will be reduced by 5%-8% compared with that in 2015. By 2020, the cost of the institutional trade, labor, taxation, social security, finance, electricity and logistics will be reduced by a proportion larger than the national average. Also, Anhui will enlarge direct financing scale of enterprises and give full play to the provincial industrial development fund. It will accelerate the development of various private equity funds such as Angel Investment and venture capital investment. Moreover, it encourage enterprises to expand bond financing, optimize financing structure and reduce financing cost.
In step with the systematic carrying out of comprehensive innovation and reform experiment,Anhui will implement about 1,000 key technology upgrading projects continuously every year,each involving more than 100 million yuan. The province will also support enterprises with innovated taxation preferential policies, implement tax deduction policy for the expenses of the enterprises arising from research activities, and the four income taxation preferential policies for national innovation demonstration areas. In addition, Anhui will exempt enterprises from value-added tax for technology transfer, development and related technical consultation and service. Anhui will give strong support to 30 technological innovation and entrepreneurship work teams from all around the world annually. It will allow eligible private capital agencies to set up financial institutions such as small and medium sized banks. The province will set up an ear-marked sci-tech fund for innovation-oriented province development and key R&D plan, and organize an 80-100 billion yuan provincial industrial development fund, with 60 billion yuan at the initial stage. Moreover, Anhui will also establish some other funds to serve enterprises in their entire lifecycle.
Anhui has prepared a provincial version of “Made in China 2025” for itself to make the province a strong manufacturer. It plans to make breakthroughsin 12 high-end manufacturing sectors and upgrade 5 competitive traditional industries. Based on the provincial development and investment fund and the provincial high-tech industry investment fund,Anhui will set up some sub-funds for “Made in Anhui 2025” projects, traditional industry upgrading, SMEs development, IT industry (IC), and cloud computing big data. Anhui will further implement the cooperative guarantee mechanism among government, banking institutions and guarantee agencies, i.e. the guarantee agency or a city or a country, the provincial guarantee group, bank and government bear the risk at the ratio of 4:3:2:1. In addition, the province will implement the supporting policies for innovation-oriented province development, tax preferential policies for high-tech enterprise incubating, encouraging and subsidy policies for industrial design center and enterprise technology center, and supporting policies for innovation and entrepreneurship of the high-tech talent teams in Anhui.
In order to promote the development of E-commerce in Anhui, the province will set aside a certain fund for that purpose. It also encourages E-commerce enterprises to apply for recognition asa high-tech or advanced technology service and will offer them relevant tax preferential policies applicable according to current tax policies. To the new investing E-commerce enterprises ranking among top 100 internationally or among top 50 domestically, the province will reward 1% of the actual arrival in the registered capital to the enterprise, on condition that the registered capital is over 50 million yuan and the maximum reward ceiling at 2 million yuan.

Comprehensive Advantages
Location and Transportation
Anhui enjoys good geographical conditions and fast-developing business convenience and the province features sound supporting facilities, lower business cost and high return of investment.

Land Transportation: Anhui is known for its railway density and high-speed railway density, for one is in the top list in East China and the other in the top list in the whole of China. Now the province has 4,124.4 kilometers railway in operation, 1,354 kilometers among whichare high-speed railways. By high-speed trains, one can, starting from Hefei, reach Nanjing in only one hour, Shanghai or Wuhan in two hours, Hangzhou, Changsha or Qingdao in three hours, and Beijing or Fuzhou in four hours. The four outlet high-speed railways of the province connect to Nanjing and Shanghai in the east, Hangzhou in the south, Wuhan in the west and Xuzhou in the north. By the end of the 13thFive-year Plan (2020), there will be 1,930-kilometer new railways, among which 1,540 will be dedicated exclusively to passenger trains. Hexineu block train, or the Hefei-Xinjiang-Europe International Freight Train, runs directly from Hefei to Hamburg, Germany. The route is now an important logistics channel connecting Asia and Europe on land.The highways in Anhui extend to 4,543 kilometers now, among which 3,833 kilometers are first-class highways. According to the development plan by 2020, Anhui will have 5,200 kilometers highway in operation, among which, 5,000 kilometers will be first-class highways and 4,000 kilometers of the second-class highway will be upgraded.


Waterway Transportation:The waterway network of Anhui covers 81% of its cities and counties. Theinland waterway available for transportationis 6,271 kilometers, among which 1,428 kilometers are rated high-grade waterways. Along the 400-kilometer Yangtze River waterway in Anhui are five national first-class open ports in Wuhu, Ma’anshan, Tongling, Anqing and Chizhou.10,000-ton oceangoing vessels can reach upstream as far as to Tongling Port. The ports in Wuhu, Ma’anshan and Anqing are the major inland river ports in China, and the ports in Tongling and Chizhou are important regional ports in Anhui. The ports in Wuhu, Ma’anshan, Tongling and Anqing are permitted by thecentral government to arrange direct shipment to Taiwan. The ports in Wuhu and Ma’anshan are the major hub ports for export and import in Anhui. It is estimated that by the end of the 13thFive-Year Plan period (2020), the total port handling capacity of the province can reach 700 million tons and the container port handling capacity can reach 2.8 million standard containers.
Air Transportation: Anhui boasts seven civil airports in Hefei, Huangshan, Chizhou, Fuyang, Anqing, Wuhu-Xuancheng(jointly built) and Bengbu. Hefei Xinqiao International Airport is a 4E-rated main hub airport in Anhui. So far, it has opened 51 domestic air routes and 13 international or regional routes including those to South Korea, Japan, Thailand and Germany and those to Hong Kong, Macao, Taiwan. The airline network of the airport covers 63 large and medium cities in the mainland and abroad, with 56 passenger destination cities (43 domestic, 5 regional and 8 international). In addition, the airport has opened two cargo flights to Shenzhen and Los Angeles. At present, Hefei plans to open new air routes to the cities in Southeast Asia, Northeast Asia, Europe and America. At the same time, the city plans to add more planes in the existing flight service and open more cargo air routes. Anhui plans to make ChizhouJiuhuashan Airport another first-class open airport during the 13thFive-Year Plan period (before 2020).
Natural Resources: Thanks to the unique natural conditions, Anhui is rich in natural resources. The province ranks in the forefront in China in terms of the output of grains, cotton and edible oil and is famous for tea products, traditional Chinese medicine, fruits and other specialties. In China, there are ten top famous teas, four of which are produced in Anhui, namely, Huangshan Maofeng, Keemun Black Tea, Taiping Houkui and Lu’an Guapian. Dendrobium huoshanense produced in the west of the Dabie Mountains is regarded as the top medical herb of all the nine major Chinese medical herbs.
Anhui has found 160 mineral resources, including 123 reserve-proven resources, specifically, 6 energy mineral resources, 21 metal mineral resources, 94 non-metal mineral resources and 2 underground water/water soluble gas resources. The recoverable deposit of mineral resources such as coal, iron, copper and iron sulfur in Anhui rank top in China. Recently, Anhui has discovered 17 large and medium scale mineral reserves anda reserve-proven mineral resource.
Tourism Resources:The world renowned Mt. Huangshan and the ancient villages of Xidiand Hongcunare in the list of the UNESCO world cultural heritage sites. Besides Mt. Huangshan, there are another nine national key scenic areas(Mt Jiuhua, Mt Tianzhu, Mt Langya, Mt Qiyun, Caishiji, Chaohu Lake, Huashan Cave, Taiji Cave and Huating Lake). Moreover, there are 5 national historically and culturally famous cities (Shexian County, Shouxian County, Bozhou City, Anqing City and Jixi County),6 national natural reserve areas, 29 national forest parks and 56 national key protection sites for cultural relics. Anhui now gives priority to the eco-friendly green development, plans to build a national park based on Mt. Huangshan and speeds up the construction of the International Cultural Tourism Demonstration Area in Southern Anhui, so as to make Anhui a pioneeringarea for the beautiful China.

Factor Cost

 

Human resources
Anhui is rich in human resources. Now the province has 43.62 million employed people, among whom 2.25 millionare professionals in various fields. In addition, the province produces more than 300 thousand college graduatesannually. The labor force can meet the demand for employment at different levels in various industries and the labor cost in Anhui is about 30% lower than that in coastal areas.
Land resources
The land cost in Anhui is lower than that in coastal areas because of implementation of land incentive policy, different taxation policy of land use, and promotion of enterprise land use level. As to the great projects which meet relevant requirements, newly-added land use will be granted according to the provincial reserved land use regulations.
Water, electricity and gas supply
Anhui is also rich in electric power resources with abundant water, wind and solar power generation capacity. It is a national pilot price reform city forelectricity distribution and can independently decide power supply rates according to the principle of cost + reasonable profit. Therefore, the province is privileged to adjust the price for industry and commerce use of the electricity.
Anhui enjoys abundant water resources and low cost for the use of them thanks to the Yangtze, Huaihe and Xin’an rivers. The total amount of water resources is 91,412 million tons and the water supply capacity 28,866 million tons, among which 9,351 million tons for industrial use.
Anhui has rich natural gas supply for there are two interconnected pipe network systems, one from the West-East Natural Gas Transmission Project and the other from Sichuan-East Natural Gas Transmission Project. 
In general, the gas price and water price are relatively lower than those in coastal areas.
Logistics
The fastest delivery of goods from Anhui to Europe, Asia countries and the east and west coastal areas of the United States takes about one or two days. International logistics service is available from companies such as SINOTRANS, China Merchants Logistics, PGL, DHL and TNT. The following is a list of the logistics cost by various transportation means for your reference.

 

Government Service
The People’s Government of Anhui Province has set up a provincial administration service center. Correspondently, all the cities, counties and urban districts have their own centers of the same kind. Even in the towns, townships, and urban sub-district are service centers for local people and business.
Anhui took the lead in establishing a provincial government power list, an accountability list and an enterprise charge collection list,and put them into practice. It also actively prepares a list of public service and intermediary service list for people, and promotes the construction of the online government service platform so as to strengthen service, reduce intervention and release the bonus from the action taken to streamline and decentralize administration.
Anhui vigorously promotes the reform on the administrative examination and approval procedures, making them relative centralized in a certain locality so as to realize an approval process mechanism mainly relying on service windows. The province will improve the operation platform where approval procedures go in accordance with the government power list. It will also deepen business system reform, enhance the construction of grass-root administration service platforms and make the governance more transparent in an all-round way.

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