Shenzhen – A City of Innovation

Nov. 2nd, 2005London, United Kingdom

Wang XueweiDirector General

Shenzhen Bureau of Trade & Industry

Summary

• Brief Introduction of Our City

• Our Competitive Advantage

• UK Links with Shenzhen

• Toward the Future and Beyond

Brief Introduction of Our City

Key Factors

• Location

• History & Today

• Population

• Economy

• High-tech Industry

• Living Environment

LocationChina in the World

ShenzhenShenzhen

LocationShenzhen in China

LocationPearl River Delta

HistoryShenzhen in 1982

Shenzhen Today

• In 1979, Shenzhen was still a small frontier town with a population of less than 30, 000.

• In 2004, the number of permanent residents in Shenzhen was 6 million.

Population

GDP & GDP per capita

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2000 2001 2002 2003 2004

Bi l l i on RMB

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2000 2001 2002 2003 2004 2010

US$

Economy Between 1979 and 2004, the economy of Shenzhen

witnessed an extraordinarily rapid growth.

• GDP Growth Rate: 28% In 2004, Per Capita GDP Reached $7100, ranked No.1 in

China.

• Industrial Output Growth Rate: 43.4%

• Foreign Trade Growth Rate: 37.9%

Economy

Export: USD 77.85 billion in 2004

No.1 for 12 consecutive years among all major cities in China Import & Export: Annualized Increase 37.8% (1980-2004)

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1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Export & i mport Export val ueI mport val ue

Economy

Foreign Direct Investment (1979-2004)• 26,881 foreign-invested projects • From 80 countries and regions• FDI : USD 27.53 billion• Up 27.4% annually (1980-2004)

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1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2002 2003 2004

Economy

High-tech Industry

Developed manufacturing industry employing high technology:

• Electronics and Information technology

• Telecommunication equipment

• New materials, new energy

• Optical electromechanical integration

• Biological engineering

8.32 Million

Hard-diskColor TV

18.57 Million

9.90 Million

Monitor Semi-conductor IC

2.56 Billion

Outputs of Key High-tech Gear in 2004

7.35 Million

PC

Switching Boards

19.77 Million

High-tech Industry

In 2004:

IT Output Value: RMB 327.8 Billion10% of the Nation’s Total

Technology Patents: 15 ThousandsRanked No. 3 among Chinese

Cities

High-tech Industry

High-tech Enterprises in Shenzhen

Huawei TechnologiesHuawei has been included into BT’s supplier short list

High-tech Industry

High-tech IndustryHigh-tech Enterprises in Shenzhen

China High-tech Fair

• One of The Most Livable Cities.• Forest coverage rate is 44%.• The average public green land per person is 14 square

meters.

Living Environment

• Sound infrastructure

• A well-Developed financial services system

• Relatively low overall business cost

• Superior backup facilities for industries

• An immigrant culture

• Efficient Government

Our Competitive Advantage

Key Factors

Sound Infrastructure

The only city in China that boasts international sea, land and

air ports.

• The 4th largest container terminal in the world• The largest land port of both goods and passengers• The 4th largest airport in China

A Well-developed Financial Services System

• 102 financial institutions, over 40, 000 financial staffs

• 38 Foreign Banks

• One of the only two Stock exchanges in China

• 140 Venture Capital enterprises, half of the whole country’s total

• Corporate income tax rate:15%

• Income tax exemption for the first 2 profit-making years and half reduction for the ensuing 3 years

• Hi-Tech firms:2 years tax holiday & 6 years half reduction

• Sound legal system, well-protected rights and interests for foreign investors

• Well-established market economy in line with international practice

Relatively Low Overall Business Cost

Production base, R&D base, transaction base of hi-tech products, including: Computer & parts, Computer software, Communication equipment, Audio visual products, Biological engineering products etc.

In a two-hour drive, you can secure: • 90% electronic parts & components

• 80% machinery and moulding materials

• 60% auto-electronics, plastics and hardware components

Superior Backup Facilities for Industries

The average age of the local residents is 30.

• High-caliber labor resources

• Favorable policies to absorb human resource

• Shenzhen Virtual University Park

• A city of innovation and entrepreneurship

An Immigrant Culture

• One-stop-straightforward government services

• E-government

• Simplified procedures

• Efficient and supportive

• 24-hours custom clearance, electronic inspection

• Power and water supply are better than others cities

Efficient Government

Japan7.08%

BVI7.54%

HongKong60.45%

UK2.91%

others7.51%

France4.32%

USA6.21%

Taiwan3.98%

Top 7 Investors in Shenzhen from 1979-2004UK Ranking the 7th

UK Links with Shenzhen

Top 7 Countries & Regions Export to Shenzhen in 2004

UK Ranking the 16th

UK Links with Shenzhen

others41%

Japan17%

Taiwan17%

Korea9%

Malaysia5%

USA4%

Thailand3%

Hongkong4%

Top 7 Countries & Regions Import from Shenzhen in 2004UK Ranking 7th

UK Links with Shenzhen

others18%

Hongkong45%

USA22%

UK2%

Holand2%Japan

6%

Singapore3%

Germany2%

• Year of 2004: Import from UK USD 381.14 Million Export to UK USD 1.7 Billion

• Jan. - Sept., 2005: Import from UK USD 302.74 Million Export to UK USD 1.48 Billion

Export

Import

UK Links with Shenzhen

As of 2004:

• FDI from UK: USD 1.17 Billion• 139 UK projects in Shenzhen

Jan. - Sept., 2005:

• FDI from UK: USD 81.3 Million

FDI

UK Links with Shenzhen

Up to now:

• Established 2 companies and organizations in UK

• Total investment: USD 555.8 Thousand

UK Links with ShenzhenFDI

Top Priority Industries

• Panel Display • IC Front-end Working Procedure• Biological Engineering• New Material, New Energy• Optical electromechanical integration• Fine Chemicals• Automobile & Spare parts

Toward the Future and Beyond

Next Objective

• Comprehensive economic zone of national dimension• Regional traffic hub• Port city featuring container transport• Regional central city in synergy with HK• Regional manufacturing base buttressed by high-tech

industry• International metropolis with subtropical weather and

coastal features

Toward the Future and Beyond

• Chief Representative: Zhang Yiping

• Add: Ostendstr. 100 D - 90334 N ü rnberg Germany

• Tel: (0049 911) 9533 9143

• Fax: (0049 911) 9533 9142

European Representative Office of Shenzhen, China :

Our Presence in Europe

Welcome to Shenzhen

Thank you !Thank you !