 East China's Zhejiang Province has issued a five-year plan for its service industry development. The objective of the move is to promote economic development, transformation and upgrading in the province. Liu Yan has more.
The new five-year-plan reduces the registration fee for service enterprises to a minimum 30,000 yuan, or 4,400 US dollars. The provincial finance will have a credit cut of 16 billion yuan or 2.3 billion US dollars over the next five years. And service enterprises will enjoy free tax benefits for those invest in the introduction of new talents.
Zhao Hongzhu is Party Chief of Zhejiang Province.
"We must accelerate the development of service industry to catch up with that in the world. We have a new slogan that is to turn 'Made in Zhejiang' to 'Create in Zhejiang.'"
Zhao Hongzhu explains that in 2006, the revenue of service trade world wide accounted for 70 percent of the global GDP. The world has entered into an era of service economy. However Zhejiang is lagging behind in this sector with its service trade revenue accounting for just 40 percent of its GDP. This has made extensive economic growth hard to maintain.
Zhejiang Governor Lu Zushan suggests measures to solve the problem.
"We must not rely too much on industry and export, especially those industries that consume excess quantities of resources, highly polluting and with low benefit. We must take measures to change the status quo and promote the common development of industry and service trade."
The governor says in Zhejiang and China as a whole, the service sector is largely controlled by the government and private enterprises can hardly find access to the market. Governor Lu Zushan says breakthroughs should be made in institutional restructuring in the province.
"In order to truly solve the problem, it is imperative to open the service industry to the public without government monopoly. Many government departments still have control of the sector because of economic interests. The provincial departments will take the lead this year in institutional reform and make new breakthroughs in this regard."
The five-year plan stipulates that all service enterprises are open to domestic investment according to law. This allows private enterprises to get involved in quality control, inspection and quarantine, export permission, and environment evaluation sectors, all of which are of government monopoly.
The provincial government will also implement a risk compensatory mechanism for small and medium sized enterprises of service trade. Preferential policies will be given to water and electricity consumption of the service enterprises. The local government also encourages these enterprises to develop talent by providing subsidy for the accommodation and research project of professional personnel and special talents who are willing to work in these enterprises.
Governor Lu Zushan says these preferential policies will greatly enhance the enthusiasm of service enterprises.
"Starting this year, the provincial finance will not charge turn over tax of the service enterprises, Instead, these enterprises will enjoy a tax refund of 10.8 billion yuan in the next five years. Meanwhile another 6 billion yuan tax will be refund to attract large financial institutions to the service trade in the next five years".
The governor has also promised to reward those enterprises that have contributed to bring state-level or international financial institutions to expand their businesses in Zhejiang. In addition, the provincial development fund for the service trade will be increased to as much as 50 million yuan, or about 7 million US dollars.
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