IS XIAMEN A VIABLE CENTRE FOR FOREIGN BUSINESS ACTIVITY?

Foreign trade and investment has a long history in Xiamen. In the early stages after the SEZ was set up in Xiamen, economic development was hindered by a number of political factors, especially the uncertain position of the SEZ and its relations with the city and provincial governments.

In 1984, a much larger SEZ was created in Xiamen. At the same time, the administrative system on the island was restructured and streamlined. This gave the city more autonomy from the provincial government to manage its local affairs. The local economy developed rapidly thanks to the advantageous geographic position and preferential policies granted by the Central Government. The total industrial output value increased by over 50 times between 1980 and 1997.

Xiamen has some advantages that will help it to stand out among the SEZs. Firstly, it is a more established old port city with a more solid economic foundation. Secondly, its unique geographic position will play an increasingly important role in the nation, especially in trade with Taiwan. Thirdly, as China steps up its campaign to join the WTO, it is expected that the Central Government will continue to grant more liberal policies to port cities like Xiamen and will turn the city into one of the free ports in China. This will no doubt increase Xiamen’s importance in attracting foreign investment and other externally oriented economic activities in the near future.

This solution offers information on:

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

§ 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.