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GDP:

According to preliminary calculations, the province's GDP reached some 1,345 billion yuan, in 2003, up 13.6 percent year-on-year.

GDP ratio (1st, 2nd and tertiary industries):

In 2003, value-added within the primary industries was some 105 billion yuan (up 1.2 percent), in the secondary industries the figure was 705 billion yuan (up 18.0 percent) and in the tertiary industries, 535 billion yuan (up 10.8 percent).

Foreign trade:

In 2003 total foreign trade amounted to some US$284 billion (up 28.3 percent year-on-year). Of this figure, exports contributed US$153 billion (up of 29.1 percent) and imports US$131 billion (up 27.3 percent) realizing a positive balance of trade which was up US$6 billion at US$22 billion.

Bilateral trade with the province?ˉs major trading partners reached new highs during the year. Total trade with Hong Kong stood at US$59 billion (up 24.4 percent), the United States US$45 billion (up 22.8 percent), Japan US$35 billion (up 29.6 percent) and the EU US$31 billion (up 30.6 percent).

The top-ten bilateral trading partners in order by value were: Hong Kong, the U.S.A., Japan, Taiwan, Korea, Germany, Malaysia, Singapore, the Netherlands and Thailand.

Foreign investment:

The total number of new contracts signed during 2003 was 2 percent down in the year at 11, 472, however the value continued to grow with direct contracted foreign funding reaching some US$24 billion (up 29.4 percent).

Foreign funding actually put in place amounted to US$19 billion (up 14.2 percent) through 7,306 foreign direct investment projects (up 10.5 percent). These represented contracts involving US$22 billion of foreign funding (up 34.7 percent) with foreign capital transfers of US$16 billion (up 18.8 percent).

The contracted capital for FDI (foreign direct investment) projects averaged almost US$3 million, an increase of US$537,000. Meanwhile 627 projects topped the US$10 million mark either in their funding for new projects or in additional funding for existing projects and together these larger value projects represented contracted foreign investment of US$10 billion.

Foreign funding amounted to US$179 million in the primary industries (up 12.6 percent), US$11 billion in the secondary industries (up 12.0 percent) and US$4 billion in the tertiary industries (up 41.8 percent).

The investment of foreign capital was most evident in the manufacture of electronic and telecommunications equipment with US$2,366 million, real estate with US$1,550 million and social services with US$850 million.

New FDI contracts were signed with Hong Kong investment sources to the value of US$10 billion in 2003 (up 28.8 percent) with funds actually put in place approaching US$9 billion (up 23.9 percent). Contracts were signed with EU sources to the value of US$500 million (up 63.1 percent) with US$740 million put in place (up 114.7 percent).

Direct investment from other countries and regions also increased markedly with Korea up some 90 percent, ASEAN up 12 percent, Canada up 31 percent, Australia up 56 percent and New Zealand up 15 percent.

The top-ten sources of FDI in terms of capital actually transferred were: Hong Kong, the Virgin Islands, the U.S.A., Taiwan, Japan, Singapore, the Netherlands, Macao, Western Samoa and the Cayman Islands.

Poverty alleviation:

The year 2003 saw 4.3 billion yuan allocated to the poorest areas in the east, west and north of Guangdong. The money went as relief to those living below the poverty line and to a fund that provides for topping-up salaries. Out of the total figure, 1.2 billion yuan was targeted to programs in the 16 key poor counties. Since October the government has paid the salaries of all teachers and employees of government offices directly in order to guarantee that they are paid regularly and on time.

Each year since 2001, the provincial government has allocated more than 300 million yuan to support the children of poor rural families with annual net incomes below 1,500 yuan per head. This covers their fees for books and certain miscellaneous expenses throughout their time in compulsory education.

Last year, 600,000 children from poor rural families got their schooling completely free. The provincial government has also established a special fund to support middle and primary schools in mountainous and economically underdeveloped areas and new teaching programs in information technology and English are being piloted.

The province places an emphasis on infrastructure projects in such fields as communications, telecommunications and energy as a means of improving the environment for economic development in its mountainous and economically underdeveloped areas.

The provincial government has set up a special fund to support highway construction in the 16 key poor counties. It is speeding up the construction of a network of highways to link the central cities with the eastern and western parts and with the mountainous northern area of the province. Expressways now connect the four mountain cities of Qingyuan, Shaoguan, Heyuan and Meizhou with the Pearl River Delta.

Pillar industries:

Household electric appliances, plastic products, foodstuffs, garments, textiles, electronics, electric power generation and metallurgy.




1. Taxation:
Income tax:
A 30 percent flat income tax shall be levied on foreign investment enterprises, and reductions or exemptions of the tax shall be allowed according to the following conditions:
1) Any foreign-invested manufacturing enterprise, which has a duration of operation in China of 10 years or longer, shall be exempted from the income tax for the first two years starting from the first profit-making year, and from the third year to the fifth year, its income tax should be reduced by 50 percent.
2) The state preferential policies for coastal economic development areas are good for all enterprises in Guangdong. Foreign-invested manufacturing enterprises set up in the province shall be taxed 24 percent of their income as income tax (except for those ruled by special regulations).
3) Sino-foreign joint ventured engaged in construction of harbors and wharves shall be levied a 15 percent preferential income tax.
4) Foreign-invested enterprises involved in agriculture, forestation, and animal husbandry, shall be levied a preferential income tax of 15 percent to 30 percent for 10 years after the expiration of the granted term of exemptions and reductions of income tax, upon their applications being approved by the tax authorities of the State Council.
5) Sino-foreign joint ventures engaged in construction and operation of harbors and wharves and with an operation duration of 15 years or longer shall be exempted from income tax for five years starting from the first profit-making year, upon their filed applications being approved by the tax authorities. Their income tax shall be reduced 50 percent from the sixth year to the 10th year.
6) Any foreign-invested export-oriented enterprise, following the expiration of the granted term of exemptions and reductions of income tax, shall enjoy a 50 percent reduction of its income tax when its export value is 70 percent or more of the enterprise?ˉs total annual output.
7) Any foreign-invested advanced technological enterprise, following the expiration of the granted term of exemptions and reductions of income tax, shall be allowed to enjoy a 50 percent reduction of income tax according to the prescribed tax rate for three years on condition that it remains to be advanced in technology.
8) Foreign investors of foreign-funded enterprises, who reinvest their shares of profit obtained from the enterprises into the same enterprises to increase their registered capitals, or invest in other foreign-funded enterprises whose duration of operation in China will not be less than five years, shall have 40 percent of their paid income tax on the reinvested amount back upon the approval of their filed applications by the tax authorities. Those who reinvest their shares of profit obtained from the enterprises in setting up or expanding export-oriented enterprises or that of advanced technology with an operation duration of not less than five years shall have all the income tax paid on the reinvested amount refunded upon the approval by the tax authorities
9) Foreign-invested enterprises who have paid income tax on its income obtained outside China in any other country than China, shall be allowed a credit against the assessed income tax to be paid as a whole, but the creditable amount shall not exceed that they have paid outside China.
10) Any foreign invested institutions engaged in production or business operation that suffer losses in a tax year, shall be allowed to carry over its losses to the next tax year and make up with the matching amount drawn from that year?ˉs income. Should such income in the subsequent tax year be insufficient to make up for the said losses, the balance may be made up with further deductions against income year by year over a period not exceeding five years. If a foreign-invested enterprise suffers losses during the initial period of operation, it shall be taxed from the year it begins to make profit, or the first profit-making year.
11) Foreign investors shall be exempted from income tax on their shared profit made out of the foreign-invested enterprises. A foreign-invested enterprise shall pay 3 percent local income tax. And exemptions and reductions shall be allowed according to the following different cases: Any foreign-invested manufacturing enterprise, during the term of exemptions of income tax for a period of two years and a 50 percent reduction in income tax for a following period of three years, shall be exempt from local income tax. Any foreign invested export-oriented enterprise or advanced technological enterprise, during the term of a 50 percent reduction in income tax, shall be exempt from the relative local income tax. Any foreign invested enterprise set up in mountainous counties or districts shall be exempt temporarily from local income tax.
Customs duty, value-added tax, consumption tax and business tax:
1) Beginning from January 1, 1998, the imported equipment for self use and with its cost accounted as part of the total investment of a project that is included in the encouraged project group, or in the limited group B, or in the permitted group whose products are all for export, as regulated in the ?°Index of Directory to foreign Investment Industries?± published jointly by the State Planning Commission, the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation (revised version of December 1997), excluding those that are listed in ?°Index of Imported Commodities of Foreign Invested Projects Not Exempt from Taxation?±, shall be exempt from customs duty and tax on import added value.
2) Self produced commodities of foreign-invested enterprises involved in the industries of breeding, farming, forestry, animal husbandry and aquatic production shall be exempt from value-added tax.
3) Export-oriented processed or assembled products and their cost of procession shall be exempt from value-added tax and consumption tax.
4) Export products of a compensated trade project, which have been levied value-added tax in the process of production, shall be refunded the paid amount of tax according to the prescribed state rules, after being reported to the Customs for export. The company shall be refunded for the paid tax without providing the remittance order for exports.
2. Foreign currency control
After China?ˉs accession to the WTO, the amount of foreign currency flow into China is hopeful to grow. To meet the new situation, the Guangdong Branch Office of the State Administration of Foreign Currency Exchange, with approval by the State Administration of Foreign Currency, has decided to simplify the verification formalities of foreign currency invested in the province. Now foreign capitals invested in the province can be examined by a bank authorized to handle foreign currency for verification, instead of by the Administration of Foreign Currency Exchange exclusively case by case. China has hold strict control of the receipts and payments in foreign currency. Since July 1996 when China put the purchase and sale of foreign currency into the business of the banks?ˉ sales and conversions, foreign capitals invested in foreign-funded enterprises have been verified case by case by the State Administration of Foreign Currency. Under such circumstance, an enterprise had to spend much time to go through the relevant formalities, running between the relevant administrative office and the bank repeatedly when an entry account of foreign currency is concerned. Doubtlessly, it would have increased the cost of an enterprise?ˉs regular operation.
In the near future, any bank designated to handle foreign exchange business can apply to the Guangdong Branch Office for the authority to verify foreign capitals. Upon the examination and approval by the branch office and on the completion of the training of the relevant clerks, they can get into business in this area. So far, a number of designated exchange banks have filed their applications with the branch office and the simplified measures for foreign currency control will take effect soon.
3. Land-use right
---The process of applying for the land-use right for a project is as follows:
1) Any person or unit who wants to use land (hereinafter referred to as applicant) to construct a project should file an application for the preliminary examination of the land-use right with the land administrative department of a people?ˉs government at or above the county level at the same time when the project is under a feasibility study. The preliminary examination of the relevant affairs about the land-use right for such a project will be executed by a land administrative department of a people?ˉs government at the same level of the department examines project, or an administrative department in charge of land at or above the county level authorized by the former, who, according to the result of the preliminary examination and the planning for the use of land of the year, ascertains and approves the quota for the use of land and issues the ?°Report on the Preliminary Examination on the Land Use for the Project Construction?± to the applicant.
2) When the applicant files an application for the examination and approval of a project with relevant departments, the ?°Report on the Preliminary Examination on the land use for Project Construction?± must be attached to the application as appendixes. Without this report, the relevant departments will not make a file of the project.
3) Upon approval of the project, the applicant should file an application for the use of land with an administrative department in charge of land of a people?ˉs government at or above the county level, together with the ?°Report on the Preliminary Examination on the land Use for Project Constructive,?± and such documents as the approval for the project to be set up, and the remarks of the planning and the environmental protection departments as well as relevant diagrams and blueprints. An administrative department in charge of land of the relevant people?ˉs government will deal with the application according to the prescribed regulations.
On the approval of the use of land by an authoritative people?ˉs government, an administrative department in charge of land of the municipal or county government will execute the scheme of land supply.
---In case of the collectively owned farmland being requisitioned, the compensation fee and the allowance for the resettlement of the local residents shall be provided according to the following standards:
1) Compensation fee for the requisitioned land
In case of paddy farmland being requisitioned, the compensation fee should be charged 8 to 10 times of the average output value of the farmland of the last three years before the requisition; in case of other sort of farmland, 6 to 8 times of the average output value of the last three years should be charged. In case of a fishery pond, the charge should be 8 to 12 times as much as the average annual output value of the nearby paddy farmland of the last three years before the requisition. In case of other sort of land for farming use, 5 to 7 times as much as the average annual output of the land during the last three years should be charged. In case of a land that has not been used, a fee shall be charged at a value of 50 percent of that charged for cultivated farmland nearby. In case of collectively owned land not used for farming, the charge should be similar to that on farmland nearby.
The average annual output value should be calculated at the price confirmed by the local price-control department according to the yearly statistical report submitted by the grassroots units and approved by the local statistical department.
2) Compensation fee for young crops
In case of a short-term crop, a fee shall be charged according to the output value of the crop at one time. In case of a perennial crop, a fee shall be reasonably charged according to the duration of the planting and growing of the crop.
3) Compensation fee for appendixes
In case of houses and installations, owned by an individual or a unit, being demolished, a compensation fee shall be given according to relevant regulations prescribed by the state.
Other appendixes such as a well, a tomb or the like on the requisitioned land shall be compensated according to the standards set by the local municipal or county government in the light of the local actual condition.
4) Allowance fee for resettlement of local residents
In case of the farmland requisitioned, the allowance fee for each farming Population to be resettled shall be charged at a value 4 to 6 times as much as the annual average output value of the requisitioned farmland made during the three years before the requisition. But the total allowance fee for each hectare of farmland should not be, at most, higher than a value 15 times as much as the average annual output value of the farmland made during the three years before the requisition. In case of other sort of farming land, the total volume of allowance fee shall be charged at a value 3 to 5 times as much as the annual output value made out of the farmland during the three years before requisition.
If the compensation fee for the requisitioned land and the allowance fee for resettlement paid according to the foregoing stipulations are insufficient for the farmers to be resettled to maintain a living standard as they have had before, allowance fee may be increased with the approval by a provincial government. But the sum of the compensation fee for land and the allowance fee for resettlement should not exceed the amount of 30 times of the annual average output value of the farmland made during the three years before requisition.
In case of the requisitioned foundation land of a house and the land that has not yet been levied the agriculture tax, no allowance fee shall be charged. The local people?ˉs government concerned should stop collecting the agriculture tax on the requisitioned land beginning from the next year of the approval for requisition.
If the approved land is a state owned farm, forest, domestic husbandry or fishery breeding farm and salt production grounds, and the requisition will result in the losses of the original land users, such losses shall be appropriately compensated according to the standard of compensation charges on the similar sort of requisitioned land owned by collectives in light of the actual cost invested by the former users in the land. The compensation fee for young crops, the fee for appendixes, and the allowance fee for resettlement shall be charged in line with the standards for charges on the requisitioned farmland collectively owned by the farmers.
---The assignment of the use-right of state-owned land should be managed by a people?ˉs government at or above county level in a unified way. An administrative office in charge of land shall be responsible for the execution by means of making agreement, bidding, or auction. In case the land is to be used for real estate development, its use-right must be assigned through open bidding or auction. The detailed procedure of and measures for land assignment shall be carried out according to the regulations made by the provincial government.
---The temporary use of land shall be approved by the land administrative office of a people?ˉs government at or above county level. In case the land to be used is owned by the state, a contract for the temporary use should be concluded between the user and the relevant land administrative office. In case that the land to be used is collectively owned by farmers, a contract for the temporary use should be concluded between the user and the land-owner, the collective economic organization of farmers, or the villagers?ˉ administrative committee. In the contract, the duration of the temporary use of land, the compensation fee for the temporary use of land, the right and interest and obligation of the two sides and the liability of both for any possible violation of the contract should be prescribed.
The compensation fee for temporary use of farming land should be the product of the average annual output value of that land during the three years before the use by the number of years of the use. In case the land has been used in construction, the fee shall be calculated according to the product of multiplying the value of the local yearly rent for state-owned land by the number of the years of use.
The user of the temporarily used land should use the land in accordance with the use prescribed in the contract agreed by both sides and no permanent construction should be built on the land. Following the expiration of the term of temporary use of the land, the temporary user, either individual or unit, shall be responsible for the restoration of the land to its original condition. If it is impossible to restore the land to its original condition and losses have been made wherefrom, the user shall be liable for relative economic compensation for the losses.
The duration of temporary use of land shall, generally, not exceed a period of two years.
---When permanent structures are to be built on the requisitioned farming land for agricultural, forest, animal husbandry and fishery production, the user should file an application for examination and approval of using land for constructions.
---The assignment, lease and mortgage of the land-use right must be conducted in conformity with the terms prescribed by law and relevant regulations, and a written contract should be signed, which should be filed with the land administrative department of a people?ˉs government at or above county level for registration, examination and approval.
The transaction of the land-use right, when in the following cases, should be submitted to the land administrative department of a people?ˉs government at or above county level for examination and approval. If, according to the law, it should be submitted to a people?ˉs government at or above county level for approval, the case should be submitted to an authoritative people?ˉs government for approval by the land administrative department after examination.
1) The first transaction of the land-use right of state owned land requisitioned in the form of payment;
2) The transaction, lease, and mortgage of the land-use right of the land requisitioned in the form of allotment;
3) The transfer or mortgage of the use right of the land for construction collectively owned by farmers;
4) Function change of the land;
5) The land-use right of the land to be transacted in shares;
6) Other cases that are required to be submitted to relevant department for approval according to law and relevant regulations.
Transaction of the land use-right shall not be allowed in the following cases:
1) The use right of the land is in dispute;
2) A land certificate has not yet been granted according to law;
3) The use-right of land has been adjudicated by judicial and administrative authorities according to law, and a decision on the attachment or limitation of the right has been made;
4) A people?ˉs government at or above county level has decided to recover the land-use right;
5) The use-right of a land jointly owned by individuals who have not yet all agreed on the transaction in written form;
6) Transaction of the land-use right has not yet been examined and approved according to Article 40 of the regulations;
7) Other cases of transaction that are forbidden by law and relevant regulations.
--- It is forbidden to develop real estate in the form of cooperation under the condition of providing documents referring to the licenses of land planning, assignment and permission to remove the residents from the requisitioned land issued by an administrative office in charge of land;
---The transaction of land-use right acquired in the form of assignment shall be allowed only when the cost on land assignment is cleared and a license of use-right of the state-owned land is issued and the assigned land has been developed with investment according to the relevant law and regulations as well as the conditions prescribed in a signed contract.
If an unfinished construction project of real estate is in accordance with the above conditions, it can be transacted. The two sides of the transaction should file with the land administrative department of a people?ˉs government at or above county level for examination and the change of the land user; after registration with the department, the contract for transaction should be submitted to the administration office in charge of construction.
---Put the system of price assessment and confirmation of the land-use right into practice. The price assessment of the land-use right should be executed in accordance with the principles of just and fairness. Based on the published base price of land and the marked price, and in reference to local market price, the price assessment should be conducted by an authoritative assessment organization set up according to law. In case the assessment of a land price shall have an effect on state profit out of the land, it should be filed with the land administrative department of a people?ˉs government at or above county level for confirmation.

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