IS SHENZHEN A VIABLE CENTRE FOR FOREIGN BUSINESS ACTIVITY?

It is no secret that the rapid development of Shenzhen has been fuelled by foreign trade and investment. Taking advantage of the “special policy, flexible measures” granted by the Central Government and its proximity to Hongkong, foreign trade and investment in Shenzhen have grown faster and in greater volume than in any other SEZ.

The new policies implemented by Deng Xiaoping brought tremendous changes to Shenzhen, notably the growth of infrastructure, industry, and service provision. The subsequent opening up of 14 cities with similar preferential policies in the coastal area consolidated the political position of Shenzhen and other early special economic zones (SEZs), but at the same time it also intensified competition among different places in China’s eastern regions.

Shenzhen is not only the most developed SEZ attracting the largest share of foreign investment in China, it also has the most comprehensive legal framework governing foreign business activities. But the future of Shenzhen lies not with investment incentives or preferential treatment. It lies with superior management standards, more developed infrastructure, more highly educated workforce, its location and proximity to Hongkong, the flexibility demonstrated by the central and local authorities, and the relatively comprehensive legal framework established in the last two decades.

This solution offers information on:

§ a detailed geographic, demographic, economic and governmental profile of Shenzhen;

§ the legal framework for local law-making;

§ the legal framework for foreign business organisation and administration;

§ local tax incentives and measures for encouraging foreign investment;

§ regulation of contracts, labour management and land use rights; and

§ other activities or special areas.