Shanghai - Shanghai Waigaoqiao Free Trade Zone

Shanghai Waigaoqiao Free Trade Zone

Facts&Figures (2007)

Source: Shanghai Pudong Statistic Bureau

Introduction

Shanghai Waigaoqiao Free Trade Zone (Shanghai Waigaoqiao FTZ) was China's first free trade zone approved by the State Council. It is also the largest free trade zone in terms of GDP in 2007. The zone was approved by the State Council in 1990 and covers a designated area of 11.03 km². The zone is the fifth state-level development zone in Shanghai. Located in northeast of Shanghai, Shanghai Waigaoqiao FTZ is situated near the mouth of the Yangtze River where the aptly named "golden waterway" confluxes with the eastern coastlines.

Situated in the Pudong New Area, the zone is only 20 km from Shanghai’s city center. It is 40 km away from the Shanghai Pudong International Airport, the largest airport in mainland China in terms of cargo throughput in 2007, and 35 km away from the Shanghai Hongqiao Airport. It lies close to Waigaoqiao Port, one of the main Ports under Shanghai Port - China's largest port. Shanghai Waigaoqiao FTZ is a 30 minute drive from the Shanghai Railway Station, which has over 100 cargo lines and connects Shanghai with most major cities in China.

Investment Climate

Shanghai Waigaoqiao FTZ is one of China's most developed free trade zones. In 2007, added value of Waigaoqiao FTZ grew by 16.6% to RMB 78.3 billion, making up 43.5% of the total added values from the fifteen state-level free trade zones in Mainland China. The container throughput of Waigaoqiao Port reached 15.6 million TEU, accounting for 60% of Shanghai Port's total.

The FTZ is the first free trade zone in China to experiment with the concept of a free trade port. The free trade zone introduced the first foreign-funded enterprise, Shanghai Itochu, in 1992. By the end of 2007, over 6,000 foreign trade firms had aggregated in the zone, 71% of which were foreign-investor firms. By 2007, 128 Fortune 500 enterprises established their business within the zone. In 2007, the foreign trade value of Waigaoqiao reached US$57 billion, accounting for 43% of the total value of the fifteen state-level free trade zones in China.

Shanghai Waigaoqiao FTZ functions as a special area for international trade and bonded operations. It encourages investments in free trade, export processing, logistics and bonded products exhibit sectors. All goods, imported or produced in Waigaoqiao FTZ, are exempted from value-added tax and import duties.

The zone has been turned into an operations center for large firms. Panasonic, HP, Swatch Group, View Sonic and sixty other multi-national firms have set up operating centers within the zone. The sales revenues of these operating centers exceeded US$150 billion in 2007, contributing to over 31% of Waigaoqiao FTZ's total. Panasonic upgraded its unit in the zone to an operating center in 2004 and raised the registered capital of the unit from US$1 million to US$7.95 million, making it the operations center for its business in eastern and northern China.

Lenovo’s new generation flagship factory was launched in May 2007. It has become the PC giant’s operating center within the north Asian regions, in order to meet the demand in Japan, South Korea, and other countries. The factory is able to produce 6 million PCs a year.