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Railways

The Lanzhou-Qinghai and Qinghai-Tibet railway trunks along with 59 special railway lines, all totaling 1,300
kilometers, run east and west through the province. At the end of 1999, the passenger-transport volume reached 2 million, and the cargo volume reached 5.85 million tons.

Regulations on encouraging foreign investment promulgated by the People??s Government of Qinghai Province issued in 1998:

Article 1 The provisions are formulated according to relevant stipulations on foreign investment of the state and situations of Qinghai.

Article 2 The provisions shall apply to the projects of Sino-foreign joint venture, Sino-foreign cooperative enterprises, and foreign-owned enterprises within Qinghai. They are also applicable to the investors from Hong Kong, Taiwan, and Macao.

Article 3 Foreign investors can choose the following forms of investment:

1. Sino-foreign joint ventures, Sino-foreign cooperative enterprises, and wholly foreign-owned enterprises;

2. Purchasing, leasing, holding share of, merging, and contacting state-owned and collective enterprises;

3. Compensation trade, material processing, processing supplied samples, assembling with supplied parts, and technology transfer;

4. BOT projects; and

5. Other forms allowed by laws and regulations.

Article 4 Foreign investment is encouraged in the fields of export, advanced technology, agriculture, forestry, animal husbandry, trade, tourism, energy, transportation and approved financial projects. Enterprises for the development and processing of local resources are encouraged.

Article 5 Foreign investment enterprises (FIEs) engaged in export, advanced technology, agriculture, forestry, animal husbandry, trade, tourism, energy, transportation and approved financial projects enjoy a refund of 50 percent of their local income tax from the local revenues. FIEs with an operation period over 10 years and an export volume of half of their output value and the FIEs in the field of advanced technology are exempt from income tax in the first two profit-making years. The FIEs can enjoy the exemption of local income tax, city housing and land tax, and car license tax for ten years. Beyond this period, the FIEs may get approval and continue to enjoy tax exemption and reduction.

Article 6 Ordinary FIEs whose income tax exceeds 24 percent of their income will get the exceeding amount from local financial departments. FIEs with an operation period of over 10 years and an investment of 5 million yuan enjoy the local income tax for three years and have the income tax refunded from the financial departments in the first profit-making year and half refunded in the second and third years.

Article 7 The overdue tax payment in the previous years of the state-owned enterprises, which are merged, share-held, and contracted by FIEs, can be treated in line with Article 6.

Article 8 When the FIEs with an operation period of five years invest their profit for the accumulation of the registration capital or the establishment of a new enterprise in Qinghai, they can have a refund of the business income tax and local income tax for the re-invested part.

Article 9 FIEs enjoy the following land-use policies:

1. FIEs are exempt from the land use fee in the fields of export, advanced technology, agriculture, forestry, animal husbandry, trade, tourism, energy, transportation and approved financial projects.

2. The ordinary FIEs pay half of the land use fee.

3. FIEs using the barren mountains, wilderness, and wasteland enjoy land transfer and use fee exemption.

Article 10 FIEs engaged in mineral exploitation enjoy 70 percent and 50 percent discounts of the mineral exploitation price during the investigation period and commercial exploitation period respectively. Governments at prefecture, county, and township levels are not allowed to push FIEs for cooperation, partnerships, and profit division.

Article 11 FIEs enjoy local administrative fee exemption upon approval.

Article 12 FIEs can settle their own cars in Qinghai. The sedans and motorcycles purchased by FIEs in China are exempt from the local surtax.

Article 13 FIEs are allowed to accelerate the fixed asset depreciation for special reasons with the approval of the concerned taxation bureau upon application from FIEs.

Article 14 FIEs have the decision-making power in operation and management. They can employ the needed managerial and technical personnel and workers in Qinghai and other places of China. As to the personnel from places rather than Qinghai, FIEs can get approval and settle them in Qinghai as needed. FIEs can legally set their product and service price.

Article 15 Relevant departments should give priority to the application of the establishment of FIEs. The examination and approval procedure should be completed within 10 days.

Article 16 No unit or individual is allowed to collect any unjustified fees and fines from FIEs. The administrative institutions can collect fees only with the approval of the price management departments. FIEs have the rights to turn down any fees if not given any relevant notice.

Article 17 Go-betweens of FIEs can be awarded with 0.5-3 percent of actual investment by the beneficiary units. Those who introduce large projects are also awarded by the provincial government.

Article 18 Organizations and relevant government departments solve the complaints of FIEs within seven days.

Article 19 The right of interpretation of these provisions belongs to the Qinghai Merchants Bureau.

Article 20 The provisions shall enter into effect on the date of promulgation. The Preferential Measures of Encouraging Foreign Investment in Qinghai issued on March 1, 1995 is repealed at the same time.

Note: In case of differences of interpretation, the text in the English Language should be considered as the text of reference.

	Elevation The average elevation is more than 3,000 meters above sea level, while 54 percent of the area is between 4,000 and 5,000 meters. The province is divided into the Qilian Mountains, the Qaidam Basin, and the Qingnan Plateau. Natural ResourcesMineralsA total of 123 kinds of mineral deposits have been verified. Of these, 50 are among the top ten in terms of reserves in the country and 11 including potassium chloride and magnesium salts have the largest deposits of their kinds in China. Many minerals are urgently needed resources in China and abroad. The famed Qaidam Basin is abundant in natural gas and oil. In addition, Qinghai has more than 30 salt lakes with proved reserves of 70 billion tons. Qinghai is also rich in nonferrous metals and non-metallic minerals. Hydraulic energy?er energy. The province has 178 hydropower stations with a total installed generation capacity of 21.66 million kw and an annual generation capacity of 77 billion kwh. Pastures???? ne of the five pasturelands in China, Qinghai has 36.46 hectares of pastureland, accounting for 50.54 percent of the province??s total area. Wild animals and plants The province is home to 411 species of vertebrates. Of the wild plants discovered, some 1,000 have economic value, and 680 are medicinal herbs. Of the wild animals, 21 kinds are under first-class state protection, 53 are under second-class state protection, 36 are under provincial protection, and 22 have been listed in the International Trade Convention on Endangered Wild Animals and Plants, Appendixes I and II. Tourism resources Qinghai features ethnic custom tours unique to the plateau. It has scenic spots including the Birds Islet, the Mengda Natural Reserves, Ta'er Monastery, snow-capped A??Nyemaqen Mountain, Sun-and-Moon Hill, and Longyang Gorge Reservoir, the largest artificial reservoir in China, and the Dulan International Game Land. Environment and current issues Soil erosion, water shortage, and deforestation. The conservation of the ecological balance is the basis of the development of west China. Qinghai is the original place of several rivers and is thus important to the ecological balance of the entire region. In the coming 15 years, the province will improve its conservation of the ecological balance, including the protection of the water and soil in six areas: the sources of the Yangtze and Yellow rivers, Qinghai Lake, the arid mountains in the east, the Longyang Gorge Reservoir, and the Qaidam Basin. It is necessary not only to strengthen the protection of natural forests, grasslands, and other sources of wild plants and animals but also to increase the restoration of deteriorated grasslands and the construction of shelter-forests. It is also necessary to increase water and soil conservation and keep the water sources clean. The target is to build a more beautiful Qinghai by the mid-21st century.
II. Population
	Total population: 5.03 million Population growth rate: 1.448% Life expectancy (average): Ethnicity Qinghai is a multi-ethnic province inhabited by 44 ethnic groups. Besides the Han, China??s majority, there are the Tibetan, Hui, Tu, Salar, and Mongol ethnic groups. Minority people account for 44 percent of the province??s total population. Literacy Primary-school graduates: 1.42 million (male: 820,000; female: 600,000) Junior-middle-school graduates: 810,000 (male: 505,000; female: 305,000) Senior-middle-school graduates: 335,000 (male: 175,000; female: 160,000) University and college graduates: 140,000 (male: 84,000; female: 56,000) Total population of age 15 and over who are illiterate or semi-illiterate: 1.55 million (male: 560,000; female: 990,000)
III. Economy
??	?? GDP: 22.016 billion yuan GDP growth rate: Average GDP per capita: 4,367 yuan???? GDP ratio (1^st, 2^nd, and tertiary industries): 18.9, 40.2 and 40.9 percent respectively.?? Poverty alleviation plan?? Inflation rateUnemployment rate ?? Revenues: 127 billion yuan?? Industrial output value and growth rate: 18.1 billion yuan Agricultural output value: 3.1 billion yuan Foreign trade In 1999 the province exported US$86.86 million worth of goods, bringing the total of the past 20 years to US$1.64 billion. Qinghai exports its products to 60 countries in East Asia, Southeast Asia, Europe, and the Americas. Foreign trade has provided work opportunities for the people and expanded the market for the province??s products, thus increasing revenues. Foreign trade has also promoted the development both of unique industries such as Tibetan carpets, bovine-wool sweaters, and other finely processed products and of metallurgical industries headed by the production of ferro-silicon and silicon carbide. The increasing imports have updated the production equipment and technological level of enterprises, enriched the consumer market, and improved the people??s living standards. Foreign investment By the end of 1999, the province had utilized US$275 million (not including US$235 million for state projects). The province had approved the establishment of 197 foreign-invested enterprises with a total foreign investment of US$547 million including contractual foreign investment of US$224 million and has implemented or was implementing 12 projects with loans totaling US$50.94 million from foreign governments. Foreign investments cover various fields and have come from various channels including foreign governments, the International Agricultural Development Fund and the World Bank. By the end of 1999, the province had received a total of US$63.26 million in international economic aid for 67 construction projects, of which 14 were under construction in 1999. These projects include the Haidong Agricultural Comprehensive Development Project, aided by the World Grain Program; the Qinghai Livestock Breeding and Potato Development Project, aided by the European Union; and the Qinghai Community Development Project, aided by Australia. These projects cover agriculture, livestock, fishery, science, technology, education, culture, public health, and women??s development. They have promoted the development of social causes in the province. Pillar industries Agriculture, hydropower, salt-chemical, non-ferrous metal, and oil and natural gas
IV. Telecommunications
	?? Telephones Post and telecommunications are comparatively advanced. Computer-controlled telephone lines link Xining, and most prefectures and counties in the province to other parts of the country and to more than 160 foreign countries. Wireless telecom services have also developed rapidly. The transmission system has utilized cables, microwaves, and satellites. The province is accessible via Internet. Radio and TV stations
V. Transportation
	Railways The Lanzhou-Qinghai and Qinghai-Tibet railway trunks along with 59 special railway lines, all totaling 1,300 kilometers, run east and west through the province. At the end of 1999, the passenger-transport volume reached 2 million, and the cargo volume reached 5.85 million tons. Highways The operational highways total 17,200 kilometers, and the highway transport network with Xining at the center radiates to all parts of the province. Airports The civil aviation air routes total 10,000 kilometers, and the province has flights from Xining to Beijing, Urumqi, Lanzhou, Xi??an, Guangzhou, Chengdu, Shanghai, and Lhasa.
VI. Projects wanting foreign investment
	Textiles, machinery, electronics, salt-chemicals, nonferrous metals, agriculture, communications, energy, and light industries.
VII Favorable policies for investment
	Regulations on encouraging foreign investment promulgated by the People??s Government of Qinghai Province issued in 1998: Article 1 The provisions are formulated according to relevant stipulations on foreign investment of the state and situations of Qinghai. Article 2 The provisions shall apply to the projects of Sino-foreign joint venture, Sino-foreign cooperative enterprises, and foreign-owned enterprises within Qinghai. They are also applicable to the investors from Hong Kong, Taiwan, and Macao. Article 3 Foreign investors can choose the following forms of investment: 1. Sino-foreign joint ventures, Sino-foreign cooperative enterprises, and wholly foreign-owned enterprises; 2. Purchasing, leasing, holding share of, merging, and contacting state-owned and collective enterprises; 3. Compensation trade, material processing, processing supplied samples, assembling with supplied parts, and technology transfer; 4. BOT projects; and 5. Other forms allowed by laws and regulations. Article 4 Foreign investment is encouraged in the fields of export, advanced technology, agriculture, forestry, animal husbandry, trade, tourism, energy, transportation and approved financial projects. Enterprises for the development and processing of local resources are encouraged. Article 5 Foreign investment enterprises (FIEs) engaged in export, advanced technology, agriculture, forestry, animal husbandry, trade, tourism, energy, transportation and approved financial projects enjoy a refund of 50 percent of their local income tax from the local revenues. FIEs with an operation period over 10 years and an export volume of half of their output value and the FIEs in the field of advanced technology are exempt from income tax in the first two profit-making years. The FIEs can enjoy the exemption of local income tax, city housing and land tax, and car license tax for ten years. Beyond this period, the FIEs may get approval and continue to enjoy tax exemption and reduction. Article 6 Ordinary FIEs whose income tax exceeds 24 percent of their income will get the exceeding amount from local financial departments. FIEs with an operation period of over 10 years and an investment of 5 million yuan enjoy the local income tax for three years and have the income tax refunded from the financial departments in the first profit-making year and half refunded in the second and third years. Article 7 The overdue tax payment in the previous years of the state-owned enterprises, which are merged, share-held, and contracted by FIEs, can be treated in line with Article 6. Article 8 When the FIEs with an operation period of five years invest their profit for the accumulation of the registration capital or the establishment of a new enterprise in Qinghai, they can have a refund of the business income tax and local income tax for the re-invested part. Article 9 FIEs enjoy the following land-use policies: 1. FIEs are exempt from the land use fee in the fields of export, advanced technology, agriculture, forestry, animal husbandry, trade, tourism, energy, transportation and approved financial projects. 2. The ordinary FIEs pay half of the land use fee. 3. FIEs using the barren mountains, wilderness, and wasteland enjoy land transfer and use fee exemption. Article 10 FIEs engaged in mineral exploitation enjoy 70 percent and 50 percent discounts of the mineral exploitation price during the investigation period and commercial exploitation period respectively. Governments at prefecture, county, and township levels are not allowed to push FIEs for cooperation, partnerships, and profit division. Article 11 FIEs enjoy local administrative fee exemption upon approval. Article 12 FIEs can settle their own cars in Qinghai. The sedans and motorcycles purchased by FIEs in China are exempt from the local surtax. Article 13 FIEs are allowed to accelerate the fixed asset depreciation for special reasons with the approval of the concerned taxation bureau upon application from FIEs. Article 14 FIEs have the decision-making power in operation and management. They can employ the needed managerial and technical personnel and workers in Qinghai and other places of China. As to the personnel from places rather than Qinghai, FIEs can get approval and settle them in Qinghai as needed. FIEs can legally set their product and service price. Article 15 Relevant departments should give priority to the application of the establishment of FIEs. The examination and approval procedure should be completed within 10 days. Article 16 No unit or individual is allowed to collect any unjustified fees and fines from FIEs. The administrative institutions can collect fees only with the approval of the price management departments. FIEs have the rights to turn down any fees if not given any relevant notice. Article 17 Go-betweens of FIEs can be awarded with 0.5-3 percent of actual investment by the beneficiary units. Those who introduce large projects are also awarded by the provincial government. Article 18 Organizations and relevant government departments solve the complaints of FIEs within seven days. Article 19 The right of interpretation of these provisions belongs to the Qinghai Merchants Bureau. Article 20 The provisions shall enter into effect on the date of promulgation. The Preferential Measures of Encouraging Foreign Investment in Qinghai issued on March 1, 1995 is repealed at the same time. Note: In case of differences of interpretation, the text in the English Language should be considered as the text of reference.

Ethnicity

Literacy

Foreign investment

Pillar industries

Agriculture, hydropower, salt-chemical, non-ferrous metal, and oil and natural gas

Railways

Highways

Airports