Gross domestic product (GDP)Hunan
?ˉs GDP in 2002 was 434.09 billion yuan, up 9 percent from the previous year.
Per capita GDP
In 2002, its per capita GDP reached 6,565 yuan..
GDP ratio (1st, 2nd, and tertiary industry)
In 2002, the added value of primary industry was 84.7 billion yuan, up 2.6 percent; secondary industry 137.2 billion yuan, up 10.9 percent; tertiary industry 175.6 billion yuan, up 10.5 percent. The ratio of the three industries is 19.5 : 40 : 40.5.
At the end of 2002, the registered number of laid-off workers from state-owned enterprises (SOEs) was 394,900, down 14.4 percent from the previous year. About 252,300 were re-employed at the same time. The registered urban unemployment rate was 4 percent.
People in poverty and Aid-the-poor ProgramHunan
put capital of 1.16 billion yuan into the Aid-The-Poor Program in 2002. By the end of the year, 100,000 more poor people had adequate supply of food and clothing.
The fiscal revenue in 2001 was 36.165 billion yuan (US$4.4 billion), up 10.03 percent over the previous year and exceeding the growth rate of gross national product (GNP) for the first time.
Industrial output value and growth rate
The industrial added value in 2002 was 144.08 billion yuan, up 11 percent.
Agricultural output value and growth rate
The combined revenue of agriculture, forestry, stockbreeding and fishing was 131.323 billion yuan, up 4 percent.
In 2002, the total revenue of imports and exports was US$2.876 billion, up 4.3 percent over previous year. Export revenue was US$1.795 billion, up 2.4 percent, and import revenue was US$1.081 billion, up 7.6 percent.
In 2002, contractual foreign investment totaled US$1.658 billion, up 24.6 percent. The actually utilized foreign capital was US$1.377 billion, up 16 percent. The foreign direct investment (FDI) was US$1.03 billion, up 27.3 percent.
Province has formed a complete industrial system with pillar industries like metallurgy, machinery, electronics, food, energy, and building materials.
(Statement: English version of these rules is translated by china.org.cn for reference only)
A. Brief Preferential Policies on Transfer of Property Rights in Hunan
Forms of Transfer
1. Property rights transfers can be done through wholly or partly for sale, joint venture and cooperation, merger and acquisitions (M&As), and managerial rights transfer of public services.
2. If enterprises are wholly bought through M&As and buyers can employ their workers, the following expenses can be deducted from net assets.
(1) Taking the actual expenditure of last year as the base, deduct the total of retirement pension, medicare fees, pension fees and subsidy in ten years.
(2) Calculated as three times the average salary of the past fiscal year in Hunan
Province, deduct the settlement allowance of superfluous employees, which is 20 percent of the total.
3. The money used to buy enterprise property rights can be paid off in installments over three years. But the first payment must be no less than 40 percent of the total. If all the money is paid off immediately, there will be a 20 percent discount; if the money is paid off in two years, there will be a 10 percent discount.
4. The market should decide the price of property rights. After approval, the trading price is allowed to be below the assessed price.
5. For enterprises whose assets approximately equal their debts, if the enterprises continue operations through asset mortgaging, they can be sold without payment.
6. After enterprises are acquired, if the land use right is leased, the land fee in five years is collected at 30 percent of the lowest level. If the land use right is sold, the land fee is collected at 50 percent of the lowest level. If the money is paid in 60 days, there will be a 20 percent discount. If the money is paid in installments, 25 percent of land fees must be paid in 60 days, and the remainder paid off in five years.
7. For M&As and contracts, if the land is not transferred again and its use is not changed, the land will be used without paying fees for five years after the approval of the land resources authorities.
Credit and Debt
8. The fiscal working funds borrowed by acquired enterprises, after approval, can be turned into state investment capital.
9. The money achieved from acquired company?ˉs housing reform belongs to the Property Administrative Company as a housing reform fund. The non-operational assets, after they are split from parent enterprises, will be taken over by government or provisionally managed by the acquired enterprises.
10. The losses of the acquired enterprises can be made up by acquiring enterprise?ˉs pretax profit in a certain period if the tax regulations so allow.
11. For enterprises that re-employ laid-off workers representing more than 20 percent of total employees, income tax within two years will be refunded through the fiscal department after the tax authority collects it.
12. Taking the tax that an acquired enterprise handed in last year as the base, 50 percent of the remainder of income tax and value-added tax will be refunded by the fiscal department in three years after the tax authority collects them.
13. Foreign-funded manufacturing enterprises operating for over 10 years are exempt from enterprise income tax in two years from the time they earn profits, and only half of tax is levied from the third to fifth years.
14. For foreign-funded enterprises involved in agriculture, forestry and stockbreeding, and foreign-funded enterprises in depressed areas, they can not only enjoy the policy prescribed in the above provision, but also pay 15 percent to 30 percent less tax in the following 10 years if their applications are approved by the State Administration of Taxation.
15. Foreign-funded export enterprises can enjoy the tax exemption and reduction policy prescribed in the provision of No. 13. If their export value exceeds 70 percent of their total output value, they pay only half the calculated enterprise income tax since the sixth year.
16. Foreign-funded advanced technology enterprises enjoy the tax exemption and reduction policy in the first five years, and pay 50 percent less enterprise income tax in the following three years.
17. If foreign-funded enterprises use their profits to increase investment, reinforce registered capital or set up new enterprises which run for at least five years, 40 percent of the tax levied in reinvestment will be refunded after investors?ˉ application is approved by the taxation authority. If they set up, or extend export enterprises and advanced technology enterprises with operation of at least five years, all the enterprise income tax in the reinvestment process will be refunded.
18. Profits the foreign investors get from foreign-funded enterprises are exempt from income tax.
19. For new hi-tech foreign-funded enterprises in hi-tech development zones approved by the State Council, their enterprise income tax can be 15 percent less.
20. The foreign-funded enterprises in Changsha and Yueyang City can enjoy the same preferential tax policies with coastal economic development zones.
(1) For these foreign-funded manufacturing enterprises in Changsha and Yueyang City, they pay enterprises income tax at a rate of 24 percent.
(2) If the foreign-funded enterprises in Changsha and Yueyang belong to:
a. Technology-intensive or knowledge-intensive items;
b. Projects that have over US$30 million investment and a very long return cycle;
c. Projects of energy, transportation, and harbor construction.
Their enterprise income tax rate is 15 percent (it needs approval from State Administration of Taxation).
21. Foreign-funded manufacturing enterprises running over 10 years are exempt from local tax (including local income tax, real estate tax, license plate tax for car and ship, and butcher tax) for ten years.
22. Enterprises in the energy, transportation, infrastructure and raw material processing fields, and foreign-funded enterprises in economic development zones and hi-tech development zones are exempt from local tax.
23. The expense in the process of property rights transference, including these in asset assessment, transactions, auctions and notarization, should be charged by below 50 percent of the current standard. Only cost price is charged when modifying registration, check-in or ownership transfer.
B. Regulations of People?ˉs High Court of Hunan
Province on Protection of Foreign Investors?ˉ Legal Rights and Interests (issued on June 3, 1998)
In order to protect the legal rights of the foreign party in foreign-related cases (?°foreign investors?± for short), promote foreign economic and trade cooperation, and attract more foreign investment, with the consent of Hunan
Provincial Party Committee, the People?ˉs High Court of Hunan
Province, on the basis of the Regulation on Protection of Foreign Investor?ˉs Legal Rights and Interests promulgated on June 6, 1995, makes the following regulations:
1. Protect the legal rights and interests of foreign investors who do business in Hunan
Province. If foreign investors don?ˉt endanger national security and public interest, the laws will protect them. For their legal rights and interests given by China?ˉs laws and regulations and local preferential policies, the People?ˉs Court will punish any actions violating foreign investor?ˉs legal rights.
2. Protect the legal contractual relationship with the foreign party. Once the foreign-related contract is the true intent of both parties, and it doesn?ˉt violate China?ˉs laws and regulations, national security and public interest, the People?ˉs Court will admit its legal effect. For those who have no complete procedure or an incomplete approval process, the People?ˉs court will admit its legal effect if they can renew their procedures before the first instance.
3. Respect foreign investor?ˉs choices for law applicability and international practice applicability. Under the precondition of not violating national and social interests, the foreign-related party can choose to solve problems according to its own relevant laws or, in their absence, of those closely approximating it. If Chinese law is at odds with any international treaties China has signed, except where there are specific national exclusions, the People?ˉs court will adopt the practice of the international treaties. International practice can be applicable for those areas that China?ˉs laws and regulation do not specifically stipulate.
4. Crackdown on crimes against the foreign investor?ˉs habeas corpus and property rights. For those violating a foreign investor?ˉs personal rights and property rights, or disturb the operational order of foreign-funded enterprises, the People?ˉs Court will punish them with a firm hand, and they will be jailed or fined. Victims who submit a civil action should be protected by the People?ˉs Court. For those cases where there is a violation but no identifiable crime, the court should order the violations to cease; for these requiring compensation, the court should judge the compensation amount.
5. Legally and equally protect a foreign investor?ˉs procedural rights. Foreign investors have rights to sue for the violation of their legal interests. For any executive actions violating their legal interests or interfering with their operational rights, the foreign investors can submit an administrative lawsuit to the People?ˉs Court. Foreign investors who bring litigation in Hunan
will enjoy the equal rights and obligations with Chinese. The People?ˉs Court should arbitrate justly, and no local protectionism is permitted. If local protectionism is found, responsible cadres will be punished.
6. Foreign-related case is given priority. Foreign-related cases should take priority in registration, and the People?ˉs Court should send registration notification in time, and hold the trial on the second day after registration. For those who have difficulties paying legal fees, the People?ˉs Court can postpone payment if foreign investors apply. For those cases that don?ˉt accord with the registration conditions, court should tell the litigants to return when the time is mature for action. For those contracts that have arbitration articles, or where both parties sign an arbitration deal after trial begins, the court should inform the arbitration committee for judgment.
7. Handle foreign-related cases openly and justly. In the trial, simple trial procedure is a priority. For the cases applicable to common trial procedure, the court should hear the cases openly. The concerned parties present evidence and ask and answer questions on any evidence, while the collegiate bench hears the evidence and gives a verdict quickly and justly. For those cases that can be solved through negotiation, the court should adopt such a course rather than adhering to fussy legal procedures. For cases where foreign investors seek a retrial and where a wrong judgment has been made, the court should correct the former judgment according to certain trial procedures. For cases where there is no cause for appeal, the court should reject the appeal without delay.
8. Cautiously implement property freezing and compulsion measures. When taking property freezing and compulsion measures, the court should follow strictly the conditions and scope the law stipulates, and should not wantonly freeze, seal or detain the property of foreign investors. Especially, there should be no property freezing exceeding the appealing and applicable scope. For a case requiring detention of foreign investors and the legal person of foreign-funded enterprises, or the removal of their licenses, the court should report to the People?ˉs Court at a higher level, and implement measures after their approval. The court at a higher level should strengthen supervision of the lower court, and rectify mistakes once they appear.
9. Strengthen the enforcement of foreign-related verdicts. If foreign investors appeal verdict enforcement or second-instance verdict enforcement, the People?ˉs Court should urge and supervise the concerned party to fulfill the verdict. For parties who have the ability but decline to fulfill, the court should carry out measures for enforcement; for those who have no ability to fulfill a judgment, the court should suspend implementation after explaining the position to the foreign investors, or stop implementation with the consent of the foreign investors. If foreign investors apply for enforcement of the judgment to which a foreign court gives enabling legal effect, this should be accepted by the Intermediate People?ˉs Court having jurisdiction. If the country in which the court giving judgment is located has international treaties or reciprocal treaties with China, courts accepting an appeal should admit its legal effect and implement according to the judgment. Otherwise, the courts should implement according to the judgment of the Intermediate People?ˉs Court having jurisdiction.
10. Deal with foreign-related cases with high efficiency, probity and politeness. The People?ˉs Court should improve efficiency, and protect foreign investor?ˉs legal rights. In the trial, judges must not accept foreign investor?ˉs money and banquet invitations. Besides, judges must not be privileged and treat foreign investors harshly. If any violations are found, they will be seriously punished.
11. Set up special institutions to deal with foreign-related cases. In the People?ˉs High Court of Hunan
Province, cases are usually handled by different trial courts according to their attributes. Intermediate People?ˉs Courts and courts at grassroots, which usually have lot of cases, should form a special court or collegiate bench to deal with cases promptly and correctly.
12. Offer foreign-related legal advice. The Judges Association under the People?ˉs High Court of Hunan
Province sets up a legal consultancy center on the protection of foreign investment, offering legal advice to foreign investors. It answers questions on China?ˉs judiciary, judicial process, foreign-related laws, and the applicability of laws and regulations. Cases concerning Hong Kong
Special Administrative Region (HKSAR) and Macao
Special Administrative Region, and Taiwan
Province are also covered by the above regulation.