Last November, the State Council issued the Work Plan of Beijing for Deepening Development of Integrated National Demonstration Zone for Opening up the Services Sector, marking the transition of Beijing’s “two zones” development to phase 2.0. What achievements have been made over the past year? Recently, the Beijing Municipal Commerce Bureau (Beijing “Two Zones” Leading Group Office), along with the Office of Financial Affairs Committee of the CPC Beijing Municipal Committee, Beijing Municipal Bureau of Justice, and Beijing Municipal Tax Service, jointly held a press conference to release the latest progress of the “two zones” initiative. As of now, nearly 130 of the 175 tasks (over 70%) outlined in the Work Plan have been implemented.
The number of newly-added foreign-funded enterprises in Beijing increased by 13.3% year-on-year in the first 10 months
Since the launch of the “two zones” initiative, nearly 30,000 projects have been included in the project pool, with nearly 20,000 already implemented, involving about 4 trillion yuan in total. According to Zhu Jing, Deputy Director of Statistics and Information Division of Beijing Municipal Commerce Bureau, from January to October this year, a total of 8,394 new projects were added to the reserve bank for investment attraction under the “two zones” initiative. Notably, 5,614 projects have been launched, with an estimated investment of 864.8 billion yuan.
A new batch of landmark and influential projects have been implemented this year. They include Mastercard Netsunion, a China-based legal entity of the world’s second-largest credit card issuer; China headquarters of Steinbeis, a world-renowned technology transfer company; Lilly China Medical Innovation Center; and China headquarters of DEWESoft, a world-renowned manufacturer of data acquisition systems.
From January to October this year, the number of newly established foreign-funded enterprises in the city (including those from Hong Kong SAR, Macao SAR, and Taiwan region) increased by 13.3% year-on-year, surpassing the national average by 1.5 percentage points. “It is noteworthy that the growth rate of newly established foreign-funded enterprises in the city has exceeded the national average for several consecutive months,” said Zhu.
In the first three quarters, the revenue of foreign-funded enterprises above the designated size in the city (in the industrial and tertiary sectors) achieved a 3.5% year-on-year increase, outperforming the city’s overall average growth rate by 1.5 percentage points. Although these enterprises account for less than 10% of all enterprises above the designated size in Beijing, they contributed more than a quarter to the total revenue, playing a vital role in supporting the city’s stable economic growth.
In addition, customs data shows that in the first 10 months, Beijing’s import and export volume reached 2.98 trillion yuan, with imports totaling 2.48 trillion yuan and exports amounting to 505.17 billion yuan, marking the second highest export value for the same period in history. The import and export values of Beijing Tianzhu Comprehensive Bonded Zone and Beijing Economic-Technological Development Area both exceeded 100 billion yuan, fully demonstrating the significant role of open platforms.
Beijing’s financial sector recorded a 6.6% year-on-year growth in the first three quarters
In the first three quarters, Beijing’s financial sector achieved an added value of 671.98 billion yuan, marking a year-on-year growth of 6.6%. This accounted for 20.1% of the city’s GDP, playing a crucial role in supporting stable economic growth. Zhao Yuan, Deputy Director of Coordination Division of the Office of Financial Affairs Committee of the CPC Beijing Municipal Committee, shared that in terms of financial market development, Beijing has supported the Beijing Stock Exchange in accelerating the implementation of 19 initiatives outlined in the Opinions on the High-Quality Development of the Beijing Stock Exchange to improve the listing and issuance systems. Significant progress has been made, with 258 companies listed on the Beijing Stock Exchange as of now, more than half of which are national high-tech “little giants”.
Beijing continued to strengthen the role of financial technology in driving efficient development, particularly by advancing the construction of a pilot financial reform zone for sci-tech innovation in Zhongguancun. The city established the Zhongguancun Sci-Tech Innovation Financial Service Center, introducing three pioneering services in the sector. Additionally, Beijing joined the equity investment pilot program for financial asset investment companies, launching the first equity investment fund and completing its inaugural investment transaction in the country. Furthermore, the city initiated the nation’s first stock option strategy fund, exploring a new model of fund operations featuring collaboration among stock option legal platforms, state-owned enterprises, and patient capital. Beijing has deepened the pilot program for the transfer of equity and venture capital shares. As of October 2024, a total of 62 fund share transfers have been completed, involving a total of 5.566 billion shares.
In March, Standard Chartered Securities, the first wholly foreign-owned securities firm in China, officially went into operation in Beijing. Additionally, Prudential Financial Insurance Asset Management Co., Ltd., the first insurance asset management company directly established by a foreign financial institution in China, was founded in Beijing. Other notable developments include the approval of a joint venture property and casualty insurer by BNP Paribas, Volkswagen Group, and Xiaomi Group. Since the beginning of this year, a total of 42 major financial institutions have been set up in Beijing.
Beijing ranked first nationwide with 1,128 tax refund stores
To support Beijing’s “two zones” development, two pilot policies were introduced with the approval of the State Council in 2020.
One of the policies, concerning the corporate income tax on technology transfer, specifies that enterprises registered in the Zhongguancun National Innovation Demonstration Zone can enjoy tax exemptions on eligible technology transfer income. Income up to 20 million yuan in a tax year is exempt from corporate income tax, while amounts exceeding 20 million yuan are taxed at half the normal rate. This policy raised the threshold from 5 million yuan in other areas to 20 million yuan and made breakthroughs in areas such as transfer scope and related parties. It has been recognized as one of the top 10 influential policies in “two zones” development.
The income tax pilot policy for corporate venture capital enterprises stipulates that if the income from the transfer of equities held for more than three or five years accounts for more than 50% of the total annual income from equity transfer, the corporate income tax of the year shall be reduced by half or be exempted according to the individual shareholder’s proportion of ownership at the end of the year. This policy is designed to promote long-term investment in sci-tech innovation and foster a favorable entrepreneurial environment.
Wang Shan, Director of Policy and Regulations Division of Beijing Municipal Tax Service, State Taxation Administration, said that to date, the two pilot policies have resulted in over 700 million yuan in corporate income tax reductions and exemptions.
Beijing continued to improve the services for tax and fee payments. This year, the national standardized online tax system was launched in the city, further reducing tax processing time. The system features intelligent pre-filling based on data aggregation and confirmation-based declaration with clear guidance, enabling most taxpayers to complete their filings with just one click or by filling in minimal information. In addition, the steady promotion of fully digitized electronic invoices further enhanced the convenience for taxpayers in using invoices.
E-CNY has also been applied in the field of tax and fee collection. This year, the Beijing Municipal Tax Service, State Taxation Administration actively expanded the use of e-CNY in tax and fee collection scenarios. Currently, eight operators, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, have completed the infrastructure development for e-CNY tax payments. All tax and fee collection services for both enterprises and individuals are covered, whether online or offline.
Moreover, the Beijing Municipal Tax Service, State Taxation Administration has optimized the departure tax refund scheme, with 16 merchants piloting the “immediate tax refund upon purchase” service, making it more convenient for overseas travelers to get cash refunds on-site. Currently, Beijing has 1,128 tax refund stores, ranking first in the country.
