China's development zones, once aimed at attracting foreign investment, are now being transformed into export-oriented pioneers.

At a recent award ceremony jointly held by the Ministry of Commerce and the Ministry of Science and Technology (MOST) on December 4 in Beijing, 18 regions and parks, including Beijing Zhongguancun Science Park and Mianyang City of Sichuan Province, were heralded as national export innovation bases for rejuvenating trade through science and technology.

The 18 export innovation bases represent China's new hi-tech industries, covering eight sectors including electronic information, biomedicine, aerospace and aviation, new materials, modern agriculture, refined chemicals, new energy sources and electromechanical industry. Statistics show that the annual sales volume of the 18 national export innovation bases amounted to 1.26 trillion yuan in 2005, while most of them injected 3-5 percent of their sales revenue into research and development.

The establishment of the national export innovation bases aims to push forward the transformation of China from a big "manufacturing country" to a large "innovation country," said Yu Guangzhou, Vice Minister of Commerce, at the ceremony.

Special treatment

In order to implement the strategy of reform and opening-up, the Chinese Government approved the establishment of four special economic zones in Shenzhen, Zhuhai, Shantou and Xiamen in south China in 1979 where preferential and flexible economic and taxation policies were adopted. After five years' operation, the four special economic zones achieved great success in utilizing foreign investment and promoting exports. Hence the Chinese Government decided in 1984 to open another 14 coastal cities and set up economic and technological development zones in 12 of them. Preferential policies similar to those performed in special economic zones were granted to these development zones, including exempting 15 percent of business income tax and exempting tariffs on imported construction equipment, with the aim of attracting foreign investment.

By the end of 2003, some 49 national-level economic and technological development zones had been set up, together with five national-level industrial parks that enjoy similar treatment to national-level development zones, said Jin Bosheng, Director of the Department of Foreign Investment Utilization of the Chinese Academy of International Trade and Economic Cooperation affiliated with the Ministry of Commerce. According to him, national-level economic and technological development zones have played an important role in introducing overseas investment, advanced technology and management expertise.

To date, most development zones contribute more than 5 percent to the gross domestic product of the cities where they are located, helping boost the local economy. Take the Dalian Economic and Technological Development Zone as an example. In 2000 alone, its GDP accounted for 15 percent of the city's total, while its industrial output value, fiscal revenue and exports made up 32.4 percent, 21 percent and 43 percent of the city's respective totals.