Lin-gang Special Area 

Goals

The State Council, China's Cabinet, issued an overall plan for the Lin-gang area of the China (Shanghai) Pilot Free Trade Zone on August 6, 2019. According to the plan, by 2025, Lin-gang Special Area is to have established a comparatively mature investment and trade liberalization and facilitation institutional system, and have built several highly open functional platforms. By 2035, the area is to have strong international market influence and competitiveness to help China further integrate with the global economy.

Scope of implementation

Lin-gang, with a start-up area of 119.5 square kilometers, is set up south of the Dazhi River, east of Jinhui Port, and south of Xiaoyangshan Island and Pudong International Airport in Shanghai. According to the principle of "overall planning and step-by-step implementation", a section that includes Nanhui New Town, Lin-gang Industrial Area, Xiaoyangshan Island and south of Pudong International Airport, will be launched first.

Advantages

Fair competition: The new area will implement a foreign investment security review system, increase openness in key areas such as telecommunications, insurance, securities, scientific research and technical services, education and health, and loosen restrictions on registered capital and investment methods.

Talent management: The special area will loosen restrictions on the employment of high-end talents in the modern services industry and implement more open and convenient policies on entry and exit and permanent residence of foreign talents. Talents who have resided in Shanghai for five years (three years for top talents) can apply for permanent residence permits.

The new area will establish a work permit system and talent visa system for foreigners, to include granting high-level overseas talents such as research and innovation leaders and teams work permits, or a "green channel" for permanent or long-term residence procedures.

Tax policies: Companies specializing in key areas including integrated circuits, artificial intelligence, biomedicine and civil aviation will be granted a preferential 15 percent business income tax for five years after registering in the area. The current business income tax rate is typically 25 percent. Policies on the tax differential subsidy of individual income tax for overseas talents will be studied and implemented.

Industries

Having developed for 15 years, Lin-gang special area is now home to over 500 projects in the areas of new energy equipment, marine engineering, intelligent manufacturing, biomedicine, artificial intelligence, and industrial internet.

The new area will establish frontier industrial clusters with key core technology as the breakthrough point. It will construct an integrated circuit industry base, an artificial intelligence innovation and application demonstration area and a civil aviation industry agglomeration area.

It will also develop new international trade, build an Asia-Pacific supply chain management center to attract the gathering of headquarters-based organizations, develop cross-border digital trade and support the establishment of cross-border e-commerce overseas warehouses.

It will build an international medical service cluster, support cooperation with overseas institutions in the development of cross-border medical insurance products and pilot international medical insurance settlement projects. Qualified solely foreign-owned enterprises will be allowed to exhibit, auction and trade cultural and artistic works globally.

Enterprises

Lin-gang, which is in the farthest southeastern part of east Shanghai's Pudong New Area, has provided many manufacturing industry success stories since the municipal government started to build an industrial cluster in 2003.

Tesla's gigafactory in Shanghai, which attracted over 50 billion yuan of investment, is also in the Lin-gang Special Area. Artificial intelligence giants such as Cambricon and SenseTime have set up operations in Lin-gang. Semiconductor maker Shanghai ZingSEMI was founded in Lin-gang in June 2014 with a total investment of 6.8 billion yuan.