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Governor: Lu Hao
Capital: Lanzhou
Governmentoffice
address:1 Central Square, Lanzhou
Telephone: 8465941
Website: www.gansu.gov.cn

Geographical location
Lying in China??s western inland area, on the upper reaches of the Yellow River, Gansu Province borders Shaanxi Province in the east, the Ningxia Hui Autonomous Region in the northeast, Qinghai Province and the Xinjiang Uygur Autonomous Region in the west, and the Inner Mongolia Autonomous Region and the People??s Republic of Mongolia in the north.

I. Geography and natural conditions

Elevation 1,000-3,000 meters.

Natural resources

Land:
Gansu features a land area of 455,000 square kilometers, including 3.53 million hectares of cultivated land or 0.14 hectare per capita, 16.64 million hectares of grassland, and 4.26 million hectares of forests with a standing timber reserve of 200 million cubic meters. In addition, there are 1 million hectares of wasteland suitable for agriculture, 6.66 million hectares of wasteland suitable for forestation, and 4.76 million hectares of mountain slopes suitable for livestock breeding.

Minerals

Nearly 3,000 deposits of 145 kinds of minerals have been found and the reserves of 94 kinds of minerals have been ascertained, including nickel, cobalt, platinum family elements, selenium, casting clay, finishing serpentine, and five other minerals whose reserves are the largest in the country. Gansu has special advantages in tapping 15 kinds of minerals such as nickel, zinc, cobalt, platinum, iridium, copper, stibium, barite, and baudisserite.

Energy

The water resources in Gansu are mainly distributed in nine river systems in the Yellow, Yangtze, and inland river drainage basins with an annual discharge of 61.4 billion cubic meters and a combined hydropower potential of 17.24 million kw. Gansu places ninth among China??s provinces and autonomous regions in terms of hydropower potential. To date, 29 hydropower stations have been constructed in the province with an installed generating capacity of 30 million kw and an annual output of 23.565 billion kwh. The Liujiaxia, Yanguoxia, and Bapanxia hydropower stations on the upper reaches of the Yellow River and the Bikou Hydropower Station on the Bailong River have a total installed capacity of 212.5 kw. The proved reserves of coal are 8.92 billion tons, and those of petroleum, between 600 and 700 million tons. There is also a considerable potential for the development of wind and solar energies.

Animals and plants

There are 659 species of wild animals, including the giant panda, snub-nosed monkey, antelope, snow leopard, deer, fawn, musk deer, bactrian (two-humped) camel, and 24 other first-class rare animals under state protection, and 441 species of birds in Gansu Province. There are over 4,000 species of wild plants including 951 species of medical value. Of which 450 species, such as angelica root, rhubarb, hairy asiabell root, licorice root, fritillary bulb, mariajuana, the bark of eucommia, glossy ganoderma, and Chinese caterpillar fungus, have been developed. Gansu holds second place among China??s provinces and autonomous regions in the variety of medicinal herbs.

Environment and current issues

Gansu faces an adverse ecological environment -- an acute shortage of water resources, sparse vegetation, and a serious water and soil loss. Every year, the section of the Yellow River in Gansu washes away more than 500 million tons of silt containing about 50 kilograms of organic matters. These include 3.5 kilograms of pure nitrogen and 2 kilograms of pure phosphorus. The washed-away silt accounts for one-third of the annual silt the Yellow River carries to the lower reaches.

In recent years, biological methods, the construction of projects, and technical measures have been made on a large scale to bring water and soil loss under control. Effort was also taken to improve the ecological environment on the Loess Plateau. Cultivated land was turned back into forest and grassland in an effort to strengthen the protection and maintenance of the ecological environment. The readjustment of the agricultural structure will be stepped up, with stress on readjusting the variety of agricultural products, the ratio between the development of grain and cash crops, and the locations of the various economic sectors.

II. Population

Total population: 25,425,800

Population growth rate: 1.004 percent

Life expectancy (average):

Ethnicity

Gansu is inhabited by 20,515,000 Han people and 2,275,900 people of ethnic minority groups, who make up 91.7 percent and 8.3 percent of the province??s population respectively. Other minority groups each with a population of more than 1,000 are the Hui, Tibetan, Dongxiang, Tu, Manchu, Yugur, Bonan, Mongolian, Salar, and Kazak.

Literacy

The enrollment of school-aged children has reached 98.2 percent. At the end of 1998, 47.5 percent of the population had completed the nine years of compulsory education and 91.6 percent had completed lower primary school. The number of illiterate or semi-illiterate people at the age of 15 and older made up of 28.65 percent of the total of their age group. Students in institutes of higher learning were 54,014 and those who graduated from the institutes of higher learning were 13,251. The students in secondary specialized schools were 68,654 and those who graduated from the secondary specialized schools were 20,790.

III. Economy

GDP: 86.975 billion yuan (1998)

Average GDP per capita: 3,456 yuanor an equivalent of 54 percent of the national figure (1998)

GDP ratio (1^st, 2^nd and tertiary industries): 20.221 billion yuan, 38.2 billion yuan, and 28.554 billion yuan respectively.

Poverty alleviation plan

Since early 1990s, 3.5 billion yuan have been allocated to poverty-stricken areas to help more than 1 million people rid poverty.

Inflation rate:

Unemployment rate:

Revenues: 54.02 billion yuan (1998)

Industrial output value: 108.139 billion yuan (1998)

Agricultural output value: 33.579 billion yuan (1998)

Foreign trade

Gansu Province has established extensive contacts with foreign countries. Seventy-one cities and counties (districts) in the province have formed friendly ties with 13 cities in Japan, the United States, New Zealand, Turkmenistan, Australia, Kazakhstan, Hungary, and Russia. Gansu exports mainly textiles, chemicals, minerals, and non-ferrous metals. In 1998, the total value of import and export reached US$556.31 million, of which US$384.9 million was from export and US$171.41, from import.

Foreign investment

Gansu has established ties with the World Bank, the UN Food and Agriculture Organization, the World Food Program, and the European Economic Community. With loans and other forms of aid from these institutions, the province has built water conservation works and harnessed river systems on a small scale, and set up medical and educational projects. In 1998, the value of import and export commodities by foreign-funded enterprises was US$62.6 million, of which US$35.14 million was export and US$27.46 million, import.

Pillar industries

Pillar industries of Gansu include non-ferrous metals, electricity power, petrochemicals, oil exploration machinery, and building materials.

IV. Telecommunications

Telephones

There are 60 cities connected with the automatic telephone network. The computer-controlled telephone exchanges in urban Gansu feature 280,000 lines with the number of subscribers reaching 274,000. Radio pager and cellular telephone systems have been established in various cities and towns. The annual volume of post and telecommunications reached 500 million yuan.

Computer-controlled telephone exchanges have been established in the prefectural cities and cities above county level and automatic telephone exchanges, in county-level cities. Digital telecommunications transmission has been realized in the provincial capital, prefectural cities, and cities above county level. People in Lanzhou can directly dial all cities in China connected with the automatic telephone network and to more than 180 foreign countries.

Radio and TV stations

There are 28 radio and 28 TV stations in Gansu.

V. Transportation

Railways

Lanzhou, the capital city of Gansu Province, is the geographical center of China, where the Lanzhou-Urumqi, Baotou-Lanzhou, Longhai (Lianyungang-Lanzhou), and Lanzhou-Xining trunk railways meet. The Baoji-Lanzhou and Lanzhou-Wuwei sections of the Longhai Railway have become electric. The Baoji-Zhongwei Railway, a new line, is now open to traffic. A dual route of the Lanzhou-Urumqi Railway was completed in May 1995. And the construction of a local railroad in Pingqing is now in full swing. By the end of 1997, the length of Gansu??s railroads in operation had totaled 1,982 kilometers, the volume of rail freight had become 42 billion tons, and the passenger volume had reached 5 billion people/km. The opening to traffic of the Eurasian Bridge has turned the vast hinterland of China, including Gansu Province, into an international thoroughfare.

Highways

There are 72 national and provincial highways linking roads in the counties and townships, with a total length of 35,000 kilometers. The Tianshui-Beidao and Lanzhou-Zhongchuan Airport expressways are open to traffic. The volume of goods transported on the highways reached 8.5 billion tons and the passenger volume, 500 million people/km.

Waterways:

Airports:
Gansu has formed an air-transport system with Lanzhou as the center. There are more than 20 air routes with a total length of 35,700 kilometers leading to Beijing, Shanghai, Guangzhou, Urumqi, Hong Kong as well as cities within the province, such as Dunhuang, Jiuquan, Tianshui, and Qingyang. The volume of air cargo reached 4.3 million tons/kilometers and the passenger volume, 42.22 people/kilometers.

VI. Projects wanting foreign investment

Water conservation, electrical power, energy, and transportation These include the Qilinsi Hydropower Station on the Bailong River, the development of the Tuomatan Coal Field in Mazong Mountain, the gas recovery from coke ovens in the Tianshui Coking Plant, the Jiudianxia Pivotal Water Conservation Work on the Taohe River, the Chaijiaxia Hydropower Station on the Yellow River in Lanzhou, the reconstruction and expansion of the Dunhuang Airport.

Non-ferrous metals, petrochemicals, and building materials

A production line with a capacity of 5,000 tons of electrolytic copper, the Dunhuang Vanadine Mining and Dressing Plant, the Luoba Lead-Zinc Mine in southern Gansu, and the Aksay County Processing Factory of Asbestos Products.

Machinery, electronics, textiles, and light industry

The expansion of the production capacity of speed-regulation electrical machinery, the production of automobile transmission shaft assembly and spare-parts for imported and home-made cars, the project with a designed annual capacity of producing 100,000 5HP-type slide compressors, and the development of fire quenching equipment, commercial concrete, crane trucks, and waste-water treatment equipment.

Medicine, food, and agricultural by-products

The second-phase of the project in Jinchang with an annual capacity of producing 2,000 tons of glycerine, the tapping of the natural mineral water with a high content of strontium, the artificial cultivation of Chinese caterpillar fungus, the production base for licorice root in Jiuquan, the development of fit-keeping and nourishing drinks, and the construction of urban and tourism facilities including the Liangzhou Tower, the Lanzhou Children??s Hospital, and the Gansu Commodity Trading Tower.

VII. Favorable policies for foreign investment

In accordance with Document No. 60, 1996 of the Gansu Provincial People??s Government, foreign-funded enterprises shall be entitled to the following preferential policies:

Preferential treatment in taxation

Foreign-funded enterprises engaged in productive operations

with an operational period more than ten years shall be exempt from the business income tax for the first two profit-making years, followed by a 50 percent reduction of the said tax from the third through the fifth profit-making year.

Foreign-funded enterprises engaged in agriculture, forestry, and animal husbandry and those established in areas outside Lanzhou proper may continue to enjoy a 15-30 percent reduced tax rate for another ten years after expiration of the business income tax exemption and reduction period, subject to approval.

Export-oriented enterprises whose output value of export products in a year amounts to 70 percent or more of the total output value of all products for the same year shall be entitled to a 50 percent reduction of the business income tax after expiration of tax exemption and reduction as stipulated by the state. Those enterprises which have been accorded the status of technologically advanced enterprises shall enjoy a 50 percent reduction of the business income tax for another three years upon expiration of the said tax exemption and reduction period.

Foreign-funded enterprises established in the Ningwozhuang Hi-Tech Industrial Development Zone which have been identified according to state regulations as hi-tech Sino-foreign joint ventures with an operational period of more than ten years shall be exempt from the business income tax for the first two profit-making years upon approval of the application of these enterprises by the taxation authority. Proper considerations of tax reduction for a certain period may be given to those who have difficulties in paying tax after expiration of the said tax exemption period, subject to approval.

Overseas investors who reinvest in China their share of profits derived from their enterprises for a period of no less than five years shall be entitled to, upon approval, a refund of 40 percent of the income tax already paid on their reinvested portion. In case that the reinvestment is made for the establishment and expansion of export-oriented enterprises or technologically advanced enterprises whose operational period is no less than five years, the investors shall be entitled to a 100 percent refund of the income tax already paid on their reinvested portion.

Foreign investors shall be free to remit abroad the profits derived from their enterprises. No remittance tax shall be levied.

Foreign enterprises established in Lanzhou proper and in the development zone to engage in productive operations and enterprises engaged in the production of industries particularly encouraged by Gansu Province shall be entitled to a 24 percent reduction of the business income tax. In case that the amount already paid is higher than 76 percent, they may receive a refund of the portion higher than 76 percent from the local institution of finance. Foreign-funded enterprises of knowledge-intensive category, foreign enterprises engaged in productive operations with an investment more than US$10 million, or those in the fields of transportation and energy sources may enjoy a 15 percent reduction of the business income tax. In case that the amount already paid is higher 85 percent, they shall get a refund of the portion higher than 85 percent from the local institution of finance at the corresponding level.

Foreign-funded enterprises with investment more than US$500,000 and an operational period more than ten years, foreign-funded enterprises engaged in the fields Gansu particularly encourages, or enterprises in the field of the catering industry established in the urban areas and the development zone of Lanzhou shall be entitled to a refund of the 3 percent local income tax already paid from the local institution of finance.

Foreign-funded enterprises shall pay tax for their motor vehicles and license plates and then are entitled to a full amount refund (exclusive motor vehicles for transport operations).

Foreign-funded enterprises are free from food animal slaughter tax.

Preferential treatment in the use of land

Foreign-funded enterprises developing barren mountains,

and wasteland into new development zones and mainly engaging in industrial operations shall be entitled to a 15 percent reduction of the fees for the transfer of the land-use right.

Foreign-funded enterprises developing barren mountains,

wasteland, and water surfaces into agricultural, forestry, and livestock breeding projects may enjoy a 50 percent reduction of the fees for the transfer of the land-use right.

Sino-foreign cooperative enterprises engaged in project

transformation with the Chinese side??s investment in the form of offering the land-use right at a fixed price may enjoy a 15 percent reduction of the fees for the transfer of the land-use right.

Foreign-funded enterprises engaged in projects especially

encouraged by Gansu Province or in productive operations in the development zones shall be entitled to a 20 percent reduction of the fees for the transfer for the land-use right or a cession of the land upon approval from the provincial government.

Foreign-funded enterprises established on barren mountains and waste riverbanks unsuitable for farming shall be free from the fees for the transfer of the land-use right.

Foreign-funded enterprises obtaining the land-use right in the form of land-use right transfer, those engaged in projects which are especially encouraged by Gansu Province, and those established in the development zone shall be free from fees for the right of land use.

Foreign-funded enterprises shall be free from the land-use fees during the period of basic facility construction (two years). Those with a operational period of more than ten years and an investment between US$500,000-1 million may enjoy a five-year exemption of the land-use fee, those with an investment between US$1-3 million, a seven-year exemption of the land-use fees, those with an investment between US$3-5 million, a ten-year exemption, and those whose investment mounting to more than US$5 million, a 15-year exemption.

Other preferential treatments and rewards

Foreign-funded enterprises shall be entitled to an inland transport allowance of 0.05 yuan for every U.S dollar they earn in export of their products from the local institution of finance at the corresponding level.

Foreign-funded enterprises belonging to the categories whose investment is encouraged according to state industrial policies may enjoy a one-year reduction of the fees for the electricity-consumption right. The ratio of reduction shall be equal to the ratio of the investment received.

Foreign-funded enterprises shall be entitled to an accelerated depreciation of their fixed assets upon approval.

Compatriots from Hong Kong, Macao, and Taiwan and overseas Chinese who make a lump-sum investment of more than US$100,000 in the province may choose one family of their relatives or friends in rural Gansu to apply for the change of their domicile to urban areas.

Intermediary organizations and individuals who have introduced overseas businessmen to invest in Gansu shall be rewarded.

The board, lodging, and medical costs of foreign personnel in foreign-funded enterprises traveling on official business in Gansu and their family dependents accompanying them shall be handled in the way same to Chinese staff.

Foreign-funded enterprises shall be entitled to the right to decide the mode of management of their enterprises, recruit and dismiss their employees, and fix the price of their products.

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	Elevation 1,000-3,000 meters. Natural resources Land: Gansu features a land area of 455,000 square kilometers, including 3.53 million hectares of cultivated land or 0.14 hectare per capita, 16.64 million hectares of grassland, and 4.26 million hectares of forests with a standing timber reserve of 200 million cubic meters. In addition, there are 1 million hectares of wasteland suitable for agriculture, 6.66 million hectares of wasteland suitable for forestation, and 4.76 million hectares of mountain slopes suitable for livestock breeding. Minerals Nearly 3,000 deposits of 145 kinds of minerals have been found and the reserves of 94 kinds of minerals have been ascertained, including nickel, cobalt, platinum family elements, selenium, casting clay, finishing serpentine, and five other minerals whose reserves are the largest in the country. Gansu has special advantages in tapping 15 kinds of minerals such as nickel, zinc, cobalt, platinum, iridium, copper, stibium, barite, and baudisserite. Energy The water resources in Gansu are mainly distributed in nine river systems in the Yellow, Yangtze, and inland river drainage basins with an annual discharge of 61.4 billion cubic meters and a combined hydropower potential of 17.24 million kw. Gansu places ninth among China??s provinces and autonomous regions in terms of hydropower potential. To date, 29 hydropower stations have been constructed in the province with an installed generating capacity of 30 million kw and an annual output of 23.565 billion kwh. The Liujiaxia, Yanguoxia, and Bapanxia hydropower stations on the upper reaches of the Yellow River and the Bikou Hydropower Station on the Bailong River have a total installed capacity of 212.5 kw. The proved reserves of coal are 8.92 billion tons, and those of petroleum, between 600 and 700 million tons. There is also a considerable potential for the development of wind and solar energies. Animals and plants There are 659 species of wild animals, including the giant panda, snub-nosed monkey, antelope, snow leopard, deer, fawn, musk deer, bactrian (two-humped) camel, and 24 other first-class rare animals under state protection, and 441 species of birds in Gansu Province. There are over 4,000 species of wild plants including 951 species of medical value. Of which 450 species, such as angelica root, rhubarb, hairy asiabell root, licorice root, fritillary bulb, mariajuana, the bark of eucommia, glossy ganoderma, and Chinese caterpillar fungus, have been developed. Gansu holds second place among China??s provinces and autonomous regions in the variety of medicinal herbs. Environment and current issues Gansu faces an adverse ecological environment -- an acute shortage of water resources, sparse vegetation, and a serious water and soil loss. Every year, the section of the Yellow River in Gansu washes away more than 500 million tons of silt containing about 50 kilograms of organic matters. These include 3.5 kilograms of pure nitrogen and 2 kilograms of pure phosphorus. The washed-away silt accounts for one-third of the annual silt the Yellow River carries to the lower reaches. In recent years, biological methods, the construction of projects, and technical measures have been made on a large scale to bring water and soil loss under control. Effort was also taken to improve the ecological environment on the Loess Plateau. Cultivated land was turned back into forest and grassland in an effort to strengthen the protection and maintenance of the ecological environment. The readjustment of the agricultural structure will be stepped up, with stress on readjusting the variety of agricultural products, the ratio between the development of grain and cash crops, and the locations of the various economic sectors.
II. Population
	Total population: 25,425,800 Population growth rate: 1.004 percent Life expectancy (average): Ethnicity Gansu is inhabited by 20,515,000 Han people and 2,275,900 people of ethnic minority groups, who make up 91.7 percent and 8.3 percent of the province??s population respectively. Other minority groups each with a population of more than 1,000 are the Hui, Tibetan, Dongxiang, Tu, Manchu, Yugur, Bonan, Mongolian, Salar, and Kazak. Literacy The enrollment of school-aged children has reached 98.2 percent. At the end of 1998, 47.5 percent of the population had completed the nine years of compulsory education and 91.6 percent had completed lower primary school. The number of illiterate or semi-illiterate people at the age of 15 and older made up of 28.65 percent of the total of their age group. Students in institutes of higher learning were 54,014 and those who graduated from the institutes of higher learning were 13,251. The students in secondary specialized schools were 68,654 and those who graduated from the secondary specialized schools were 20,790.
III. Economy
	GDP: 86.975 billion yuan (1998) Average GDP per capita: 3,456 yuanor an equivalent of 54 percent of the national figure (1998) GDP ratio (1^st, 2^nd and tertiary industries): 20.221 billion yuan, 38.2 billion yuan, and 28.554 billion yuan respectively. Poverty alleviation plan Since early 1990s, 3.5 billion yuan have been allocated to poverty-stricken areas to help more than 1 million people rid poverty. Inflation rate: Unemployment rate: Revenues: 54.02 billion yuan (1998) Industrial output value: 108.139 billion yuan (1998) Agricultural output value: 33.579 billion yuan (1998) Foreign trade Gansu Province has established extensive contacts with foreign countries. Seventy-one cities and counties (districts) in the province have formed friendly ties with 13 cities in Japan, the United States, New Zealand, Turkmenistan, Australia, Kazakhstan, Hungary, and Russia. Gansu exports mainly textiles, chemicals, minerals, and non-ferrous metals. In 1998, the total value of import and export reached US$556.31 million, of which US$384.9 million was from export and US$171.41, from import. Foreign investment Gansu has established ties with the World Bank, the UN Food and Agriculture Organization, the World Food Program, and the European Economic Community. With loans and other forms of aid from these institutions, the province has built water conservation works and harnessed river systems on a small scale, and set up medical and educational projects. In 1998, the value of import and export commodities by foreign-funded enterprises was US$62.6 million, of which US$35.14 million was export and US$27.46 million, import. Pillar industries Pillar industries of Gansu include non-ferrous metals, electricity power, petrochemicals, oil exploration machinery, and building materials.
IV. Telecommunications
	Telephones There are 60 cities connected with the automatic telephone network. The computer-controlled telephone exchanges in urban Gansu feature 280,000 lines with the number of subscribers reaching 274,000. Radio pager and cellular telephone systems have been established in various cities and towns. The annual volume of post and telecommunications reached 500 million yuan. Computer-controlled telephone exchanges have been established in the prefectural cities and cities above county level and automatic telephone exchanges, in county-level cities. Digital telecommunications transmission has been realized in the provincial capital, prefectural cities, and cities above county level. People in Lanzhou can directly dial all cities in China connected with the automatic telephone network and to more than 180 foreign countries. Radio and TV stations There are 28 radio and 28 TV stations in Gansu.
V. Transportation
	Railways Lanzhou, the capital city of Gansu Province, is the geographical center of China, where the Lanzhou-Urumqi, Baotou-Lanzhou, Longhai (Lianyungang-Lanzhou), and Lanzhou-Xining trunk railways meet. The Baoji-Lanzhou and Lanzhou-Wuwei sections of the Longhai Railway have become electric. The Baoji-Zhongwei Railway, a new line, is now open to traffic. A dual route of the Lanzhou-Urumqi Railway was completed in May 1995. And the construction of a local railroad in Pingqing is now in full swing. By the end of 1997, the length of Gansu??s railroads in operation had totaled 1,982 kilometers, the volume of rail freight had become 42 billion tons, and the passenger volume had reached 5 billion people/km. The opening to traffic of the Eurasian Bridge has turned the vast hinterland of China, including Gansu Province, into an international thoroughfare. Highways There are 72 national and provincial highways linking roads in the counties and townships, with a total length of 35,000 kilometers. The Tianshui-Beidao and Lanzhou-Zhongchuan Airport expressways are open to traffic. The volume of goods transported on the highways reached 8.5 billion tons and the passenger volume, 500 million people/km. Waterways: Airports: Gansu has formed an air-transport system with Lanzhou as the center. There are more than 20 air routes with a total length of 35,700 kilometers leading to Beijing, Shanghai, Guangzhou, Urumqi, Hong Kong as well as cities within the province, such as Dunhuang, Jiuquan, Tianshui, and Qingyang. The volume of air cargo reached 4.3 million tons/kilometers and the passenger volume, 42.22 people/kilometers.
VI. Projects wanting foreign investment
	Water conservation, electrical power, energy, and transportation These include the Qilinsi Hydropower Station on the Bailong River, the development of the Tuomatan Coal Field in Mazong Mountain, the gas recovery from coke ovens in the Tianshui Coking Plant, the Jiudianxia Pivotal Water Conservation Work on the Taohe River, the Chaijiaxia Hydropower Station on the Yellow River in Lanzhou, the reconstruction and expansion of the Dunhuang Airport. Non-ferrous metals, petrochemicals, and building materials A production line with a capacity of 5,000 tons of electrolytic copper, the Dunhuang Vanadine Mining and Dressing Plant, the Luoba Lead-Zinc Mine in southern Gansu, and the Aksay County Processing Factory of Asbestos Products. Machinery, electronics, textiles, and light industry The expansion of the production capacity of speed-regulation electrical machinery, the production of automobile transmission shaft assembly and spare-parts for imported and home-made cars, the project with a designed annual capacity of producing 100,000 5HP-type slide compressors, and the development of fire quenching equipment, commercial concrete, crane trucks, and waste-water treatment equipment. Medicine, food, and agricultural by-products The second-phase of the project in Jinchang with an annual capacity of producing 2,000 tons of glycerine, the tapping of the natural mineral water with a high content of strontium, the artificial cultivation of Chinese caterpillar fungus, the production base for licorice root in Jiuquan, the development of fit-keeping and nourishing drinks, and the construction of urban and tourism facilities including the Liangzhou Tower, the Lanzhou Children??s Hospital, and the Gansu Commodity Trading Tower.
VII. Favorable policies for foreign investment
	In accordance with Document No. 60, 1996 of the Gansu Provincial People??s Government, foreign-funded enterprises shall be entitled to the following preferential policies: Preferential treatment in taxation Foreign-funded enterprises engaged in productive operations with an operational period more than ten years shall be exempt from the business income tax for the first two profit-making years, followed by a 50 percent reduction of the said tax from the third through the fifth profit-making year. Foreign-funded enterprises engaged in agriculture, forestry, and animal husbandry and those established in areas outside Lanzhou proper may continue to enjoy a 15-30 percent reduced tax rate for another ten years after expiration of the business income tax exemption and reduction period, subject to approval. Export-oriented enterprises whose output value of export products in a year amounts to 70 percent or more of the total output value of all products for the same year shall be entitled to a 50 percent reduction of the business income tax after expiration of tax exemption and reduction as stipulated by the state. Those enterprises which have been accorded the status of technologically advanced enterprises shall enjoy a 50 percent reduction of the business income tax for another three years upon expiration of the said tax exemption and reduction period. Foreign-funded enterprises established in the Ningwozhuang Hi-Tech Industrial Development Zone which have been identified according to state regulations as hi-tech Sino-foreign joint ventures with an operational period of more than ten years shall be exempt from the business income tax for the first two profit-making years upon approval of the application of these enterprises by the taxation authority. Proper considerations of tax reduction for a certain period may be given to those who have difficulties in paying tax after expiration of the said tax exemption period, subject to approval. Overseas investors who reinvest in China their share of profits derived from their enterprises for a period of no less than five years shall be entitled to, upon approval, a refund of 40 percent of the income tax already paid on their reinvested portion. In case that the reinvestment is made for the establishment and expansion of export-oriented enterprises or technologically advanced enterprises whose operational period is no less than five years, the investors shall be entitled to a 100 percent refund of the income tax already paid on their reinvested portion. Foreign investors shall be free to remit abroad the profits derived from their enterprises. No remittance tax shall be levied. Foreign enterprises established in Lanzhou proper and in the development zone to engage in productive operations and enterprises engaged in the production of industries particularly encouraged by Gansu Province shall be entitled to a 24 percent reduction of the business income tax. In case that the amount already paid is higher than 76 percent, they may receive a refund of the portion higher than 76 percent from the local institution of finance. Foreign-funded enterprises of knowledge-intensive category, foreign enterprises engaged in productive operations with an investment more than US$10 million, or those in the fields of transportation and energy sources may enjoy a 15 percent reduction of the business income tax. In case that the amount already paid is higher 85 percent, they shall get a refund of the portion higher than 85 percent from the local institution of finance at the corresponding level. Foreign-funded enterprises with investment more than US$500,000 and an operational period more than ten years, foreign-funded enterprises engaged in the fields Gansu particularly encourages, or enterprises in the field of the catering industry established in the urban areas and the development zone of Lanzhou shall be entitled to a refund of the 3 percent local income tax already paid from the local institution of finance. Foreign-funded enterprises shall pay tax for their motor vehicles and license plates and then are entitled to a full amount refund (exclusive motor vehicles for transport operations). Foreign-funded enterprises are free from food animal slaughter tax. Preferential treatment in the use of land Foreign-funded enterprises developing barren mountains, and wasteland into new development zones and mainly engaging in industrial operations shall be entitled to a 15 percent reduction of the fees for the transfer of the land-use right. Foreign-funded enterprises developing barren mountains, wasteland, and water surfaces into agricultural, forestry, and livestock breeding projects may enjoy a 50 percent reduction of the fees for the transfer of the land-use right. Sino-foreign cooperative enterprises engaged in project transformation with the Chinese side??s investment in the form of offering the land-use right at a fixed price may enjoy a 15 percent reduction of the fees for the transfer of the land-use right. Foreign-funded enterprises engaged in projects especially encouraged by Gansu Province or in productive operations in the development zones shall be entitled to a 20 percent reduction of the fees for the transfer for the land-use right or a cession of the land upon approval from the provincial government. Foreign-funded enterprises established on barren mountains and waste riverbanks unsuitable for farming shall be free from the fees for the transfer of the land-use right. Foreign-funded enterprises obtaining the land-use right in the form of land-use right transfer, those engaged in projects which are especially encouraged by Gansu Province, and those established in the development zone shall be free from fees for the right of land use. Foreign-funded enterprises shall be free from the land-use fees during the period of basic facility construction (two years). Those with a operational period of more than ten years and an investment between US$500,000-1 million may enjoy a five-year exemption of the land-use fee, those with an investment between US$1-3 million, a seven-year exemption of the land-use fees, those with an investment between US$3-5 million, a ten-year exemption, and those whose investment mounting to more than US$5 million, a 15-year exemption. Other preferential treatments and rewards Foreign-funded enterprises shall be entitled to an inland transport allowance of 0.05 yuan for every U.S dollar they earn in export of their products from the local institution of finance at the corresponding level. Foreign-funded enterprises belonging to the categories whose investment is encouraged according to state industrial policies may enjoy a one-year reduction of the fees for the electricity-consumption right. The ratio of reduction shall be equal to the ratio of the investment received. Foreign-funded enterprises shall be entitled to an accelerated depreciation of their fixed assets upon approval. Compatriots from Hong Kong, Macao, and Taiwan and overseas Chinese who make a lump-sum investment of more than US$100,000 in the province may choose one family of their relatives or friends in rural Gansu to apply for the change of their domicile to urban areas. Intermediary organizations and individuals who have introduced overseas businessmen to invest in Gansu shall be rewarded. The board, lodging, and medical costs of foreign personnel in foreign-funded enterprises traveling on official business in Gansu and their family dependents accompanying them shall be handled in the way same to Chinese staff. Foreign-funded enterprises shall be entitled to the right to decide the mode of management of their enterprises, recruit and dismiss their employees, and fix the price of their products.