Preferential Policies and Supporting Facilities & Conditions

1.Preferential Policies

According to the Catalogue for the Guidance of Foreign Investment Industries issued by the State Government, this project shall be included in the Catalogue of Encouraged Foreign Investment Industries. Foreign-funded enterprises which are engaged in the construction of public dock facilities of ports and scheduled to operate for a period of over 15 years shall, upon approval by relevant taxation administrations, be exempt form enterprise income tax for the first to the fifth profit-making years, and will be subject to a 50% reduction of enterprise income tax form the sixth to the tenth years.

In case a foreign-funded enterprise that is encouraged by the state to develop imports self-use equipment, it will be exempted from duties and value added tax. When a foreign invested enterprise procures domestically manufactured equipment and when the value of such purchase is within the total amount of investment, the full amount of value-added tax on such domestic equipment will be refunded and regarded as a creditable amount in business income tax.

Since the project site is within the jurisdiction of Yantai Economic & Technological Development Zone (YETDZ), in addition to the relevant preferential policies formulated by the State Government, the project will be granted more preferential treatments, which are stipulated for the national level Economic & Technological Development Zones, in terms of taxation, land utilization and infrastructure facilities.

To promote the development of WesternYantaiPort, Yantai Municipal Government has formulated a series of preferential policies in respect of the utilization of land and sea area as well as the construction of infrastructure.

2.Supporting Facilities & Conditions

• Water supply: There is a independent water supply system in this area, the capacity of which is 200,000 cubic meters per day and will be increased to 300,000 cubic meters per day according to the “11th Five-Year-Plan”.
• Power supply: In the project area, power is supplied by a dual circuit (i.e. Huabei Power Network and Shandong Power Network.) so that the power resource is sufficient. Now there are one substation of 220KV, 8 substations of 110KV and 5 substations of 35KV. According to the planning, another 3 substations of 110KV are to be built up specially for this project in the future.
• Heating: At present, there are two thermo-electric plants in Yantai Economic & Technological Development Zone (YETDZ), with a capacity of 360 tons per hour.
• Natural gas: The existing capacity of natural gas is 380,000 cubic meters per day.