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Inner Mongolia Travel China

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Manzhouli   Zalantun   Horqin   TongLiao   Dongsheng   Hailar   Linhe  

Inner Mongolia has national iron and steel and coal production bases. In addition, it has industries of forest, farm produce processing, electricity, machinery, chemicals, electronics, textile, sugar, paper making, and light industry. It has a developed agriculture and animal husbandry. The region is a national production base of cash grain, oil, and sugar. It is also an important animal husbandry base, ranking the top among the five major pastoral areas in the country.
In 2001, the grain output in the region totaled 12.39 billion kg, and the annual growth in the number of domestic animals reached 25.89 million. The total output of meat and dairy products reached 1.49 million and 1 million tons respectively, up by 3.9 percent and 20 percent from the previous year.
The year also witnessed accelerated pace of industrial restructuring and technologic renovation in the region. The total industrial added value reached 50.7 billion yuan (US$6.12 billion), the annual growth rate being 11.3 percent. The tertiary industry and the non-state-owned economy have developed rapidly, becoming a significant force in boosting local economic development.
GDP: 140 billion yuan (US$16.9 billion) (2000)
154.55 billion (US$18.67 billion) (2001)
GDP growth rate: 9.6 percent (2001) and averaging increasing rate of 10 percent during the ninth Five-Year Plan period (1996-2000)
GDP per capita: 5,350 yuan (US$646) (2000)
Urban and rural income: From 1989 to 1997 Inner Mongolia was the poorest in China in terms of the disposable per capita income of urbanites and rural residents. In 1999 it ranked 22nd in the country. In 2000 the disposable per capita income of urbanites and rural residents amounted to 5,120 yuan (US$618), 7.3 percent up over the previous year, a 58.9 percent increase over the end of eighth Five-Year Plan period (1991-95), and averaging an annual increase of 9.7 percent. The average per capita income of rural residents hit 2,050 yuan (US$248), with an annual increasing rate of 5 percent.
In 2001, the disposable per capita income of urbanites and rural residents was 5,536 yuan (US$668.6) and 1,950 yuan (US$235.5). A total of 850,000 people in the rural areas shook off poverty and began to have enough to eat and wear.
GDP ratio: (1st, 2nd, and tertiary industries): 25:39:36 (2000)
Added value and growth rate (1st, 2nd, and tertiary industries) (2000): 35.2 billion yuan (US$4.25 billion), 55.2 billion yuan (US$6.67), and 49.6 billion yuan (US$5.99 billion) respectively; 2.6 percent, 12.3 percent, and 11.6 percent increase over the previous year respectively; averaging annual increase rate of 6.4 percent, 11.7 percent, 10.7 percent during the ninth Five-Year Plan (1996-2000).
Added value and growth rate (1st, 2nd, and tertiary industries) (2001): 36.1 billion yuan (US$4.36 billion), 62.4 billion yuan (US$7.54 billion), and 55.97 billion yuan (US$6.76 billion) respectively; 2 percent, 12 percent, and 12.1 percent increase over the previous year respectively.
Poverty-alleviation plan
By the end of 2000, Inner Mongolia still had some 804,000 poverty-stricken people without necessary food and clothes and 3 million in unstable situation. It needs to resettle 200,000 people.
Inflation rate (2000): consumption price 1.3 percent up over the previous year.
Unemployment rate: 3.34 percent (2000)
Revenues: 16.77 billion yuan (US$2.02 billion) (2001), 7.8 percent up from the previous year.
Foreign trade: Inner Mongolia has conducted trade, economic and technological cooperation with nearly 100 countries and regions in the world. Its exports come in 1,000 categories. Trade with Russia and Mongolia thrives. During the ninth Five-Year Plan period, the region achieved US$7.58 billion in import and export, with an export of US$4.16 billion. In 2000 it obtained US$2 billion in foreign trade, the export being US$1 billion. The region has 18 opening ports -- including 11 A-grade and 7 C-grade -- and 16 development zones, four of state level and 12 of regional level. In 2001, the total export value of the region amounted to US$1.14 billion, increasing at an annual growth rate of 11.6 percent.
Foreign investment: By the end of 2000, the region had 1,871 foreign invested enterprises and a contracted foreign investment of US$2,559.32 million. It received loans of US$1.72 billion for its 78 projects from international financial organizations and foreign countries, with a total of US$52.78 million from foreign governments for its 43 projects. The projects cover 70-plus counties in the region and involve agriculture, education, health, communications, energy, and environmental protection. Foreign loans account for 5.1 percent of the total fund for fixed asset investment. It has actually utilized 43.14 billion yuan of foreign funds.
The year 2001 saw a total of 18.4 billion yuan (US$2.22 billion) invested in the region, of which US$187 million was from overseas, up 66 percent.
Key industries: Farm production and processing as well as animal husbandry; energy; metallurgy and chemicals.

Industries encouraged to draw investment:
1. Deep produce processing of farming and animal husbandry and comprehensive development of agriculture and animal husbandry;
2. Infrastructure construction of water conservancy, electricity, communications, ports, and urbanization and public welfare undertakings;
3. Exploitation of rare earth products and development of bio-engineering projects, research and development of hi-tech industries planned by the regional scientific and technological department;
4. Development of tourism resources;
5. Environmental protection projects including improvement of barren mountains, barren slopes, and other wasteland, and project of turning cultivated land into forests and grasslands;
6. Exploitation, extraction, and processing of mineral resources;
7. Sophisticated chemical industry, petrochemical industry, and processing of coal;
8. New building material development and recycling of waste and old resources;
9. Asset recombination of enterprises in Inner Mongolia in the forms of merger, purchase, and shareholding.
Projects available to foreign investment:
1. High-quality production line of activated carbon;
2. Promoting base of embryo transplant of cows and mutton sheep;
3. Production of new Mongolian medicine;
4. Efficient water-retaining project of cornstarch with an annual production of 150,000 tons;
5. Production of natural carotene;
6. Ancient Zhaojun Ethnic Garden of Inner Mongolia;
7. Project of aluminum sheets with foil with an annual production of 10,000 tons;
8. Construction of Kaolin production base;
9. The third-phase water expansion project of Dongsheng City;
10. The multi-functional gymnasium construction in Baotou;
11. House refuse treatment;
12. Shareholding transfer of Baotou Jinxing Medicinal Capsules;
13. Follow-up project of rare earth separating line with a capacity of 3,000 tons;
14. The Yihua natural gas-made methyl with an annual production capacity 150,000 tons;
15. Technological renovation of cashmere spinning with an annual production capacity of 200 tons;
16. Lysine production in Huameng Jinhe with an annual capacity of 10,000 tons;
17. Billet casting project of the Baotou Iron and Steel Co.;
18. Series new products of ephedrine.

Article 1: These provisions are formulated according to the relevant stipulations on foreign investment of the state and Inner Mongolia in an attempt to widen opening-up, attract foreign investment and stimulate the export-oriented economy.
Article 2: These provisions shall apply to the foreign companies, companies of Hong Kong, Macao, and Taiwan, private enterprises, Sino-foreign joint ventures, Sino-foreign cooperative enterprises, foreign-owned enterprises within Inner Mongolia, and public undertakings.
Article 3: The foreign invested enterprises, engaging in the industries encouraged by regional government and with an operational period of more than ten years, are levied business income tax since the profit-making year and then returned within five years by local financial sector. The local government will take 25 percent of the value-added tax, which will be returned to the foreign invested enterprises within five years of production. For those foreign invested enterprises with less than ten years of operation, the returned business income tax and value-added tax will be paid back to local government.
Article 4: Inner Mongolia encourages the establishment of foreign invested enterprises involving large investment.
1) The foreign-funded productive and hi-tech enterprises established in the development zones, regional capital, and border cities with approval by the State Council shall be levied the same income tax as foreign-funded and foreign enterprises in China's coastal opening cities and development zones.
2) The foreign invested enterprises in service industries with an investment of US$5 million and operational period of more than ten year are levied tax according to the designated rate since its profit-making year and 50 percent of the tax will be returned to the foreign invested enterprises by local financial sectors.
Article 5: The hi-tech and export-oriented enterprises in the development zones of the region are levied taxes according to state stipulations and the part exceeding 15 percent will be returned by local financial sectors.
Article 6: Foreign investors of the foreign invested enterprises who reinvest their share of profits in their enterprises to expand production and establish export-oriented enterprises with an operational period of no less than five years will receive a refund of the paid income tax for the amount of reinvestment, subject to approval by local taxation authority. Their own or entrusted export may enjoy current state tax reimbursement. When their export volume accounts for more than 60 percent of the total production value, the portion exceeding 10 percent of the business income tax shall be first collected and then returned to the enterprises by local financial sectors.
Article 7: The foreign invested enterprises enjoy the local income tax exemption.
Article 8: The foreign invested enterprises in the fields of infrastructure construction including energy and transportation are encouraged to take the investment form of BOT, project financing and operational right transfer. The foreign investors in the fields of major transportation projects and renovation of old cities may expand the area of land development and service industry with relevant approval. The foreign invested enterprises can decide the price and charging criteria of their products and service with the approval of the regional financial and price-control departments. Foreign investors are encouraged to build high-level highways and the business income tax from the tolls will be first collected and then returned to foreign investors within eight years since the traffic opening day.
Article 9: Foreign investors are allowed to obtain the full or part of the SOEs' property rights through the forms of purchasing, shareholding, and incurred obligation with the approval of the governments above county level.
Article 10: Foreign-funded enterprises are entitled to the following preferential policies for the use of land:
1) The foreign invested enterprises are exempted from land use fee within construction stage.
2) Foreign investors running enterprises on its former location shall be exempt from land use fee within the first five years of operation, with an operational period over ten years.
3) With an operational period of over 15 years, the export-oriented enterprises, hi-tech enterprises, and enterprises in the fields of energy, transportation, infrastructure, exploitation of resources, and raw materials exempt from land use fee since its production for five years with an investment of US$0.5-1 million, seven years with an investment of US$1.01-3 million, ten years with an investment of US$3.01-5 million and 15 years with an investment of over US$5 million.
4) The foreign invested enterprises in the field of grassland improvement will develop animal husbandry in line with the regional plan after gaining right of land use.
5) Foreign investors in plantation and breeding industry may enjoy a long-standing land use right for at most 50 years with approval of authorized government.
6) Foreign investors in the fields of developing barren mountains and wasteland are encouraged to develop them into farm-oriented land and may use the land for 50 years with approval of authorized government. For those developing wasteland into construction use land, retention of land transfer fee will be first collected and returned to foreign investors by local financial sectors after the development reaches the contracted scale.
7) Foreign investors in the field of urbanization enjoy preferential policies accordingly.
Article 11: To attract investment for projects in remote areas in Inner Mongolia, foreign investors can carry out the projects in the development zones in the region after application. Relevant departments offer convenient service of related procedures including approval and tax transfer.
Article 12: The foreign invested enterprises are allowed to get loans preferentially for the turnover fund and other needed fund with approval of the banks of their deposits. The foreign invested enterprises can apply for loans in RMB on pledge of spot exchange, fixed assets, and other properties allowed by the state.
Article 13: The foreign invested enterprises shall be charged at the same rate as Chinese enterprises and Chinese citizens when getting service of operating expenses, and charges can be settled in RMB. Priority shall be given in ensuring the supply of water, electricity, heating, and telecom facilities needed in the production and operation of foreign-funded enterprises and foreign-funded public undertakings. The charges should be the same as those of Chinese enterprises.
Article 14: The export-oriented foreign invested enterprises, hi-tech foreign invested enterprises, and productive enterprises in the fields of energy, transportation, infrastructure, and raw materials shall be levied half of the fees for auxiliary urban infrastructure.
Article 15: Priority should be given to the foreign invested enterprises by local communications department in terms of production transportation.
Article 16: Foreign staff of the foreign invested enterprises shall have the same national treatment concerning accommodations, taking buses, and medical care in Inner Mongolia.
Article 17: The board of directors of the foreign invested enterprises is entitled to decide the salaries and bonus criteria according to relevant state regulations and reports to the labor department. The Foreign invested enterprises hire their employees by themselves and handle needed procedures with local labor department.
Article 18: The foreign invested enterprises enjoy relevant preferential polices of the state and Inner Mongolia Autonomous Region when hiring the laid-off workers from the SOEs.
Article 19: The procedures of examination and approval of the report submitted by the foreign invested enterprises cannot exceed 10 days. After the foreign invested enterprises go through all needed procedures, the autonomous region, the Foreign-Investment Office and Center of Project Approval will coordinate their work and one-stop service will be offered by industrial and commercial department, taxation sector, planning department, and departments of environmental protection, urban construction, land use, foreign trade, and finance.
Article 20: The lawful rights and interests of foreign-funded enterprises are protected by law. Relevant departments should observe the following regulations:
1) No inspection and punishment is allowed to be given to the foreign invested enterprises without the guideline of laws, rules, and regulation.
2) No departments or individuals except authorized organizations shall force banks to assign capital or freeze deposits of the foreign invested enterprises or seal up the legal property of the foreign invested enterprises.
3) The lawful rights and interests of foreign-funded enterprises allow no infringement.
Article 21: In case that policies formulated in the past to encourage foreign investment do not conform to the above policies, take these policies as the guideline.
Article 22: The policies shall be implemented on the day of promulgation. The Foreign-Investment Office under the People's Government of Inner Mongolia Autonomous Region is responsible for explaining the policies.
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