SHANGHAI

Introduction

Shanghai has a total area of 6,340.5 sq. km and is located at the heart of the Yangtze River Delta. The city is divided into 19 districts with total population of 18.6 million by the end of 2007. Shanghai is one of the 4 autonomous municipalities and historically a commercial and financial center of China.

Shanghai is flanked by the East China Sea on the east and Hangzhou River at the south. Due to its geographic location, Shanghai is China's largest and the world's 3rd largest container port. The Yangshan International Deep Water Port under construction is expected to give modern twist to the port city. Hongqiao and Pudong International airports link Shanghai with 141 cities in 29 foreign countries and regions.

In its 11th Five-Year Programme, Shanghai aims to become an international hub for finance, trading and shipping. In particular, Pudong District is to become a pilot area for integrated reforms

Climate

Shanghai has a pleasant northern subtropical and four distinct seasons. It spring and autumn are shorter as compared with summer and winter. The average annual temperature is 16 degrees celcius. The city has a frost-free period lasting up to 230 days a year. Shanghai also receives an average annual rainfall of 1,200 mm. Most of the precipitation comes during the May-September flood season, which divided into three rainy periods, namely, the Spring Rains, the Plum Rains and the Autumn Rains.

Pudong New District

The Pudong New District is situated in the east of the Huangpu River, the southwest of the mouth of the Yangtze River, and adjacent to the urban districts of Shanghai. The area which borders the East China Sea in the east and the Yangtze River in the north, occupies a position at the intersection of China'sso-called golden coast and golden waterway. It is opposite to the famous "Bund" across the Huangpu River.

The Pudong New Area is an organic part of the economic and social development of Shanghai, the development of Pudong will gradually proceed in a planned and phased way according to priority.

Business in Shanghai

Shanghai Consumer Market

Shanghai is the largest consumer market among all mainland cities, supported by the rising income level and large inflow of tourists. Shanghai consumers are also being viewed as trend-setters for fashion and lifestyle products among the whole country.

Shanghai's retail sector is developing rapidly. Shanghai's per capita disposable income of urban residents reached RMB 23,623 in 2007, increased by 14.3% from 2006. Retail sales of consumer goods grew by 14.5% to RMB 384.8 billion in 2007.

Composition of Per Capita Expenditure of Urban Household (%)

Shanghai has strong distribution power in China, especially in the Eastern region and Yangtze River Delta. And foreign brands often choose Shanghai as point of entry into the China market. Domestic tourists and travellers used to visit Huaihai Road and Nanjing Road for a glimpse of the latest trends in the Chinese marketplace. The shopping malls on the Nanjing road, Huaihai Road and in the Xujiahui Business Center are filled with people everyday, displaying the most stylish chic in the world

Income Tax for Business

The income tax of Sino-foreign equity ventures, Sino-foreign cooperative joint ventures and wholly foreign-owned enterprises is 30 percent, plus 3 percent local income tax; the income tax of productive enterprises invested in by foreign businessmen in urban areas is 24 percent, and only 15 percent for productive enterprises invested in by foreign traders in economic development zones and in the Pudong New Area.

Enterprises scheduled to operate for periods of 10 years or more shall be exempted from income tax in the first two profit-making years and allowed a 50 percent reduction in the following three years. When the exemption expires, export enterprises with foreign investment shall pay a rate reduced by 10 percent when their annual value of export good amounts to more then 70 percent of the total annual value of production.