Draft:Lin-gang Special Area
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The Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone (FTZ) is a key strategic project by the People's Republic of China. Created to deepen reform and boost openness, Lin-gang aims to be a leading economic and urban development hub. Its plan includes advanced industries, strong infrastructure, and an environment that supports talent and innovation.
Overview
[edit]The Lin-gang Special Area is strategically located in the southeast of Shanghai, serving as a key hub in Shanghai's coastal passage. It is bordered by Pudong International Airport to the north and Yangshan Port to the south..[1] The area is specifically situated south of the Dazhi River, east of Jinhui Port, and includes Xiaoyangshan Island and the southern part of Pudong International Airport.[2]
Covering an area of 873 square kilometers, its initial start-up zone extends over 119.5 square kilometers, including Nanhui New City and the Lingang Equipment Industrial Zone.[3] This large geographical scope highlights the scale of its ambition and the comprehensive nature of its development.
The Lin-gang Special Area includes 11 sections: Jinhui Residential Area, Green Village Area, Fengcheng Friendly Living Area, Green Land Area, Emerging Industrial Area, Integrated Industrial Area, Dishui Lake Core Area, Advanced Intelligence Manufacturing Area, Haiwan Special Functional Area, Xiaoyanshan Island Area, and the southern part of Shanghai Pudong International Airport.[4]
Strategic Purpose and Vision
[edit]The establishment of the Lin-gang Special Area is a key strategic project by the CPC Central Committee to advance China's opening-up policies.[5] This initiative shows China's strong dedication to comprehensive openness in the new era and its active role in guiding the healthy growth of economic globalization.[6] The area is designed to benchmark against the most competitive free trade zones worldwide, adopting open policies and systems that are competitive in the global market[7].
The designation of Lin-gang as a "Special Area" within the Shanghai Pilot Free Trade Zone, managed with reference to a special economic zone [8], signifies a unique status. This indicates a higher degree of autonomy and flexibility in policy implementation compared to standard free trade zones.
Lin-gang has set ambitious targets for its future development:
● Vision 2025: By 2025, the region aims to establish a strong institutional system characterized by the liberalization and facilitation of investment and trade. It plans to develop more open functional platforms and become a hub for world-class enterprises. Significant improvements in innovation, competitiveness, and economic strength are expected, with the goal of building 100-billion-yuan-level industrial clusters and quadrupling regional GDP compared to 2018.[9]
● Vision 2035: The long-term goal is to establish a special economic functional zone with significant global market influence and competitiveness. By 2035, Lingang aims to develop more mature institutions, create core functions for distributing high-end resources worldwide, and serve as a vital platform for China's deeper integration into economic globalization.[10] These goals include a resident population of about 2.5 million and a regional GDP surpassing 1 trillion yuan ($140 billion).[11]
Geographic Scope and Key Features
[edit]The development of the Lingang Special Area began with Nanhui New Town, the Lingang Equipment Industrial Zone, Xiaoyangshan Island, and the southern part of Shanghai Pudong International Airport.[12] The area is designed as a modern new town that emphasizes openness, innovation, intelligent ecology, integrated urban and industrial growth, and a welcoming environment for living and working environment[13]. This comprehensive urban planning, combined with ambitious population goals, shows a clear plan to build a complete urban ecosystem, rather than just an industrial zone.
Notable landmarks in the Lin-gang area include Dishui Lake, the Shanghai Planetarium, and the Shanghai Haichang Ocean Park[14]. These attractions add to the district's appeal as a lively and livable urban area.
History
[edit]Origins as Nanhui New City
[edit]The area now forming a core part of Lin-gang Special Area was initially called Lingang New City (临港新城) until it was renamed Nanhui New City in April 2012[15]. Construction of Nanhui New City started in 2003, with the German architecture firm Gerkan, Marg and Partners leading the project.[16] The initial estimated cost for this ambitious project was $4.5 billion.[17] Nanhui New City was originally planned to house between 450,000 and 800,000 residents and attract 10 million tourists annually[18].
A large part of the site was reclaimed from the sea. It is located at the tip of the peninsula between the Yangtze and Qiantang rivers, on Hangzhou Bay, about 60 kilometers southeast of downtown Shanghai.[19]
Establishment as a Special Area of the Pilot Free Trade Zone
[edit]The idea of a new area for the Shanghai Pilot FTZ was publicly announced at the opening of the first China International Import Fair in 2018.[20]. This high-level endorsement marked a key moment, raising the project from a local urban expansion to a national strategic economic and geopolitical effort. Then, the Lin-gang Special Area of China (Shanghai) Pilot FTZ was officially launched on August 20, 2019, after approval from the CPC Central Committee and the State Council.[21] In August 2019, it was also confirmed that the Nanhui New City area would be included in the Shanghai FTZ.[22] This move is seen as an important strategic step for further opening-up and demonstrates China's strong commitment to overall openness.[23]
Policies and Advantages
[edit]Lin-gang Special Area features an institutional system focused on free investment and free trade:
(1) fair competition for investments and simplified business procedures;
(2) high standards of trade liberalization;
(3) a cross-border financial management system to facilitate fund transfers;
(4) an open international transportation management;
(5) flexible and accessible personnel management;
(6) secure and efficient international Internet data flow across borders;
(7) an internationally competitive tax system and policies[24].
Lin-gang Special Area follows the "Five Freedoms + One Convenience" political framework: investment, trade, capital flow, transport, talent mobility freedom, and information connectivity convenience[25].
Surpassing other sections within the China (Shanghai) Pilot Free Trade Zone, Lin-gang Special Area emphasizes institutional openness and alignment with international rules. In addition to existing national strategies (e.g., the Belt and Road Initiative, the Yangtze River Delta Economic Belt), it explicitly prioritizes supporting the Yangtze River Delta integration strategy, focusing on collaborative innovation, and aims to “drive a new wave of reform and opening-up in the region. [26]"
Lin-gang Special Area target key sectors like integrated circuits, AI, biopharma, and civil aviation, supported by customized policies on investment, talent, and taxation. The Yangshan Free Trade Zone within the area leads with a new model featuring risk-based supervision and higher-level trade liberalization and facilitation[27].
Preferential Economic and Tax Policies
[edit]Since its inauguration, Lin-gang has adopted 18 industrial support policies.[28] A key incentive is a 15 percent corporate income tax rate for core enterprises in supported sectors[29]. This is further bolstered by coordinated support from major projects and specialized funding programs launched by the government.[30]
Industry-Specific Support Programs
[edit]The policies in Lin-gang are specifically designed to support four major industries: integrated circuits, artificial intelligence, biomedicine, and aerospace, all of which are explicitly promoted by the government.[31] Support also extends to a broader range of advanced manufacturing and strategic emerging industries, including new-generation information technology, high-end equipment manufacturing, intelligent vehicles, new materials, new energy, energy storage, and environmental protection.[32] This extensive and targeted support, which includes tax breaks, R&D funding, capital rewards, and operational subsidies, reflects a highly coordinated government strategy to develop and sustain strategic industries.
● Integrated Circuits: Companies conducting core technology R&D breakthroughs can receive funding covering up to 50 percent of their expenses. Subsidies are available for EDA design tools (up to 30 million yuan), Multi-Project Wafer (MPW) adoption (up to 3 million yuan), and first-time full mask tape-out (up to 20 million yuan). Enterprises that independently develop core equipment and materials can earn bonuses up to 10 million yuan, while manufacturers providing materials and IC packaging/testing services can receive electricity bill subsidies up to 5 million yuan annually.[33]
● Biomedicine: Funding is available for new medicine clinical trials, manufacturing, and marketing approvals, up to 3 million yuan per approval. Redeveloped drugs with new indications can receive up to 2 million yuan, with a maximum of 10 million yuan annually. Support is also provided for medical device and pharmaceutical production certificates, with funding up to 2 million yuan annually and a cap of 5 million yuan. Institutions that obtain international or domestic professional qualifications may receive one-time funding of up to 1 million yuan. Biopharmaceutical companies with marketing licenses registered in Lingang can earn a reward of 1 percent of their year-over-year sales revenue increase, with a maximum of 5 million yuan).[34].
● Artificial Intelligence: Projects that lead industrial development or make disruptive breakthroughs in core AI technologies can receive up to 20 million yuan in funding. AI companies registered in Lin-gang with significant paid-up capital are eligible for awards (up to 5 million yuan), and those with investment funds can obtain one-time settlement support (up to 5 million yuan). Awards are also available for demonstration projects, scenario investment providers (up to 3 million yuan), and technology/product/service providers (up to 2 million yuan).[35]
● Aerospace: Domestic and international aerospace leaders and SMEs with significant paid-up capital are awarded 3-5 percent of their capital, with a maximum of 10 million yuan. Manufacturing-focused enterprises that reach sales revenue milestones receive a four-tier bonus, up to 5 million yuan. Subsidies are available for mergers and acquisitions (5 percent of the cost, up to 5 million yuan) and for testing/verification (50 percent of the cost, up to 2 million yuan per year). Recognition for intelligent manufacturing also includes one-time subsidies of 2 million yuan at the national level and 1 million yuan at [36]the municipal level.
● Finance: Licensed financial institutions settling in Lin-gang can receive settlement bonuses of up to 60 million yuan. New financial institutions and equity investment companies are eligible for bonuses of up to 20 million yuan. Subsidies are available for purchasing office space—covering up to 12 percent of the cost, with a maximum of 60 million yuan—or for rent, which is fully subsidized for 3 years, for newly established financial and functional institutions.[37] A new policy promotes an equity investment cluster, offering rewards up to 30 million yuan based on fundraising scale, and an additional 2 million yuan for every 200 million yuan invested in non-listed enterprises.[38] Substantial incentives are provided for investments in seed- and early-stage sci-tech innovation enterprises—up to 10 percent of the investment, with a maximum of 1 million yuan per project, and 10 million yuan annually for each management institution).[39]. Support is also extended to QFLP and QDLP pilot programs, with rewards up to 40 million yuan.[40] The area makes use of a 20 billion yuan sci-tech innovation fund and actively supports angel investments, corporate venture capital (CVC), and industry events.[41]
Business Environment Optimization
[edit]Lin-gang implements a foreign investment security review system while also strengthening opening up in key sectors such as telecommunications, insurance, securities, scientific research, technical services, education, medical, and health care.[42] Existing restrictions on registered capital and investment methods are relaxed to promote fair competition.[43] To improve the business and judicial environment, a trial organization is established for international commercial disputes.[44]
A comprehensive set of 16 policy measures across five key areas further supports development [45]:
1. Enhancing the aggregation of global high-end and emerging resources: Four measures aim to strengthen the international competitiveness of the data industry, promote financial innovation, attract more domestic and international talent, and improve housing policies for talent.[46]
2. Developing a comprehensive technological innovation system: Three measures focus on gathering high-quality innovation resources, promoting the transformation and incubation of scientific achievements, and enhancing technological financial services.[47]
3. Positioning key industries to compete in international markets: Three measures focus on developing world-class frontier industry clusters, accelerating the innovative application of intelligent connected equipment, and fostering the concentrated growth of professional services.[48]
4. Expanding high-level opening-up: Two measures are designed to create new competitive advantages in developing the Yangshan Free Trade Zone and to enhance functional support for Lin-gang as a modern urban district.[49]
5. Improving support mechanisms: Four measures are tailored to strengthen financial support, optimize the business environment, reinforce legal support, and improve work mechanisms.[50]
Access for equity investment institutions is streamlined, with establishment processes completed within 7 working days and fund approval within 5 working days.[51] Support for S funds (fund unit transfers) and a comprehensive service platform for equity investment are also provided.[52] Additionally, Lin-gang offers a legal services center providing basic legal support, lectures, and consultations, along with free basic financial and accounting services. It assists businesses in connecting with investors for both debt and equity financing, and even has its own funds available for promising entrepreneurial projects.[53]
Talent Attraction and Management Policies
[edit]Lin-gang has implemented highly flexible and convenient personnel management policies.[54] Restrictions on hiring high-end talents in the modern service industry are eased, and more open policies are being introduced for foreign talents' entry/exit and permanent residence for foreign talents.[55]
Specific talent benefits include:
● Free support for early-stage talent: Young talents beginning their careers in Lin-gang receive free services, including 15 days of complimentary accommodation in designated units, a welcome package worth 500 yuan, and up to three years of zero-rent startup spaces[56].
● Subsidies for sustained development: Lin-gang offers 5,000 yuan per month for university students interning there; up to 5,000 yuan in rental subsidies; up to 5,000 yuan grants for those obtaining new vocational skill certifications; a one-time resettlement subsidy of 10,000 yuan for bachelors, 20,000 yuan for masters, and 80,000 yuan for PhDs; support for entrepreneurial events; and priority access to new housing resources for innovation and startup talents.[57]
● "Zero wait" service guarantees: Lin-gang guarantees at least 100 job fairs per year and offers policy services 24 hours a day, 7 days a week[58].
● Work permits for foreign student entrepreneurs: Foreign students intending to start businesses in the Lin-gang Entrepreneurial Park are granted work permits, with their start-up experience in the park recognized as work experience.[59]
● Long-term Residence Permits: Lin-gang with foreign nationality can directly apply for long-term Foreign Talent Residence Permits (Category B, up to 10 years) without a separate work permit. [60]Additionally, foreign technical experts in registered companies are eligible for long-term work permits, valid for at least two years[61].
● Comprehensive Talent Support: Qualified equity investment institutions receive talent-focused benefits such as household registration, housing, healthcare, and education[62]services for children. Seminars and visits are arranged to the International Talent Service Port and Migrant Affairs Service Center to inform international students about these talent policies.[63]
Yangshan Free Trade Zone
[edit]The Yangshan Free Trade Zone is a key part of Lin-gang's plan for high-level opening-up.[64] This zone provides highly liberalized trade and logistics benefits, making it a key hub for global technological exchange and industrial advancement.
Key features and advantages include:
● Streamlined Procedures: Goods not subject to inspection and quarantine or verification of regulatory credentials for import and export can directly leave the port upon submission of release requests.[65]
● Exemption from Manuals: Trade processing manuals are no longer required for companies within the bonded area, simplifying administrative processes.[66]
● Expanded Business Scope: Companies can conduct a wide range of businesses, including merchandise transfer, container consolidation, warehousing, processing, trade, exhibition, research and development, remanufacturing, and inspection/maintenance, without requiring customs approval.[67]
● License Exemption for R&D Imports: Except for prohibited items, goods imported by companies for R&D within the area are exempt from license submission.[68]
● Third-Party Services: Third-party inspection and testing institutions or certification bodies are encouraged to provide import/export inspection and certification services within the area.[69]
● Remanufacturing Allowance: Remanufacturing of aerospace and engineering equipment and CNC machines with advanced technology and high value added is permitted.[70]
● Bonded Warehousing: Bonded warehousing and exhibition of imported vehicles are allowed.[71]
Economic Development
[edit]Core Industries and Strategic Emerging Sectors
[edit]Lin-gang's economic strategy focuses on four key industries: integrated circuits, artificial intelligence, biomedicine, and aerospace.[72] The area also actively promotes advanced manufacturing and strategic emerging industries, including new-generation information technology, high-end equipment manufacturing, intelligent connected vehicles, new materials, new energy, energy conservation, and environmental protection.[73]
The area is evolving into a key hub for intelligent connected vehicles, drawing major players like Tesla and CATL, along with robotics and new materials.[74] In 2024, Lin-gang's industrial output hit 423 billion yuan ($58.7 billion), with over 70 percent of this total.[75] Industrial fixed asset investment, mainly in high-tech sectors, has surpassed 40 billion yuan ($5.55 billion) for three consecutive years, making up more than 20 percent of Shanghai's total.[76]
Table 1: Major Supported Industries and Notable Companies
Industry | Key Focus/Sub-sectors | Notable Companies/Projects |
Integrated Circuits | Core technology R&D, EDA tools, MPW, full mask tape out, equipment/materials manufacturing, 7nm/8nm process, MRAM, 3D NAND, CIS IDM, automotive-grade wafer fab | GTA Semiconductor, Huada, GalaxyCore, SMIC, Bestecnic, AMEC, ACM Research, Zing Semiconductor, SICC, Empyrean Technology, Kingsemi, EDRI, SMIT Group, Shanghai Lin-gang Power Electronics Research Institute, SITRI |
Artificial Intelligence | AI chips, core algorithms, operating systems, fundamental software, intelligent sensors | Shanghai Heji Data Technology Co Ltd, AgiBot, HOUMO.AI |
Biomedicine | New medicine approvals, redeveloped drugs, medical devices, pharmaceutical production, professional qualifications, neuro-interventional devices, monoclonal antibodies, vaccines, gene therapy, precision medicine, testing | Medtronic, Boston Scientific, HeartCare, TopAlliance Biosciences, CanSinoBIO, Eyougene, OBiO Technology, Maxvax Biology, WuXi Biologics, Cascade Pharmaceuticals |
Aerospace | Equipment manufacturing, M&A, testing/verification, remanufacturing | China Eastern Airlines Ltd, Boeing |
Intelligent Connected Vehicles | High-end equipment manufacturing, smart cockpits | Tesla, CATL, Yanfeng International Automobile Technology Co Ltd (SAIC unit) |
New Materials | Advanced materials | Jinchuan Group Co Ltd, Sigenergy |
Other Strategic Emerging Industries | New-generation information technology, new energy, energy conservation, environmental protection, robotics | RT-Thread (Operating Systems Software), QH Quartz (Industrial Supplies and Parts), TangFeng Energy (Electrical Equipment), Shenergy Property Casualty Insurance (Insurance Brokers) |
Economic Targets and Growth Trends
[edit]Lin-gang's economic growth plan is ambitious. By 2025, it aims for its regional GDP to quadruple compared to 2018, creating 100-billion-yuan industrial clusters.[77] The long-term goal for 2035 includes a regional GDP exceeding 1 trillion yuan ($140 billion) [78] Since its establishment in 2019, the area has experienced over five years of rapid growth, contributing to Shanghai's overall economy. [79]
Role of Shanghai Lin-gang Economic Development Group
[edit]The Shanghai Lingang Economic Development (Group) Co., Ltd., commonly known as Lingang Group, plays a central role in the area's economic growth. The group aims to serve as an innovative ecological integration service provider and general operator of industrial parks, with the goal of establishing high-tech park brands with global influence.[80] Its leadership, including Yuan Guohua as Party secretary and chairman, is responsible for finance, foreign investment, and foreign trade.[81] Wu Xiaohua, another deputy secretary, oversees industrial investment and investment services.[82] This centralized, integrated management structure is a key factor in the rapid and coordinated development seen, ensuring alignment between policy, infrastructure, and industrial growth.
Transportation and Infrastructure
[edit]As a crucial hub along Shanghai’s coastal corridor, Lin-gang Special Area, bordered by Shanghai Pudong International Airport to the north and Yangshan Port to the south, connects air, sea, railway, highway, and inland waterway networks.
Aviation
Pudong Airport handled 76.15M passengers and 3.63 million tons of cargo in 2019[83]. Located 30 km from the airport, the area connects via Lianggang Avenue and G1503 Expressway.
Port & Shipping
Yangshan Port’s 2020 container throughput surpassed 20 million TEUs, representing 46 percent of Shanghai’s total, with water-to-water transshipment reaching 51.8 percent[84].
Coastal terminals: 5 ports including 1 passenger terminal at Luchao Port and 4 cargo terminals.
Inland waterways: Dalu channels
Rail
Pudong Railway and Luchao Port Railway serve Situan Railway Station and Luchao Port Railway Center Station. The Luchao Port Railway Center also operates sea-rail intermodal routes, moving 230,000 TEUs in 2020[85].
Internal Transport Infrastructure
By the end of 2019, a preliminary road network spanning 916 km and a public transit system were in place, with ongoing upgrades enhancing efficiency.
Roads: 343 km urban roads; 573 km highways
Public Transit
Metro: Metro Line 16 (Dishui Lake Station; Lingang Avenue Station; Shuyuan Station); Metro Line 27 under construction.
Bus: 67 bus routes covering a total of 685 km, 563 stops including 88 intelligent bus stops, 6 hubs, and 40 terminals.
Digital-rail Rapid Transit:
Line 1: Runs between Dishui Lake station and Hongyin Plaza[86]
Line 2: Runs in a loop from Dishui Lake station, passing via Lin-gang Avenue station, Shengang Avenue, and Meirenjiao Road before returning to Dishui Lake.[87]
Line 3: Runs between Feidu Road station (along the route of Line 1) and Caoxuan Road in Fengxian district.[88]
Parking
123,000 parking spaces in the core area, including 37 public lots with 6,155 spaces and 55 on-street zones with 2,571 spaces[89]
Intelligent Transportation
Autonomous Vehicle Testing Zones: 4.2 km closed and 118.2 km open test roads.
Autonomous Trucks: As of 2020, 30 intelligent SAIC heavy trucks operate on the Yangshan Port-Donghai Bridge route, logging over 530,000 km[90].
Education and Research
[edit]Educational Institutions
[edit]By August 2023, Lin-gang Special Area has established a diverse education service system, including 57 educational institutions covering all levels of formal education. These comprise 19 kindergartens, 29 primary and secondary schools, 1 secondary vocational school, 5 regular higher education institutions, and 3 non-degree-granting institutions, namely Sino-French Institute of CAFA (Central Academy of Fine Arts), SJTU-UEA Joint Institute for Low Carbon Innovation (Shanghai Jiao Tong University), and Dishui Lake School of Advanced Finance (Shanghai University of Finance and Economics)[91], including:
Universities in Lin-gang Special Area[92]
Sino-French Institute of Art and Design Management of the China Central Academy of Fine Arts
China-UK Low Carbon College, Shanghai Jiao Tong University
Shanghai Maritime University
Shanghai Ocean University
Shanghai University of Electric Power
Shanghai Dianji University
Shanghai Jian Qiao University
Primary, middle, and high schools in Lin-gang Special Area[93]
Shanghai Pudong New Area Ming Zhu Lingang Primary School
Lin-gang Primary School Attached to Shanghai Normal University
Jianping Lingang Primary School
Lingang Foreign Language Primary School
Nicheng Primary School Yunhan Branch
Shanghai Qiuping School
Shanghai Lingang No 1 Middle School
Shanghai East High School
Shanghai Lingang Experimental Middle School
Lin-gang High School Attached to Shanghai Normal University
Foreign language school affiliated to WFL Education Group
Yew Wah International Education School (Shanghai Lingang)
Wusi School
Shanghai Xin'gang Middle School
Shuyuan Primary School
Shanghai Xingang Middle School
Xingang Primary School
Kindergartens in Lin-gang Special Area[94]
Shanghai Lin-gang New City Haiyin Kindergarten
Shanghai Yew Wah Lingang Campus
Shanghai Bing Chang Tian Di Shui Hu Kindergarten
Shanghai Chaohe Kindergarten
Shanghai Fangzhu Kindergarten
Shanghai Luchao Port Kindergarten
Fangzhu Kindergarten Hucheng Branch
Pudong New Area Xin Yuan Kindergarten
Bing Chang Tian Lingang Kindergarten
Yunrui Kindergarten
Pengzhen Kindergarten
Nicheng Kindergarten
Innovation Ecosystem and Research Initiatives
[edit]Lin-gang is actively integrating industry and education, aiming to be a pioneer in this field.[95] Policies and conferences are regularly held to promote this integration.[96]
● Research Centers and Parks:
○ Lin-gang Life Science & Tech Park is designed to be a leading domestic cluster for the life sciences industry, bringing together companies specializing in biological medicine, medical devices, biochemistry, and medical materials, along with research institutes.[97] It features R&D office buildings and production workshops, with environmental impact assessment (EIA) formalities completed for R&D, production, and pilot scale testing.[98] Notable companies such as Boston Scientific, OBiO Technology, Maxvax Biology, WuXi Biologics, HeartCare, and Cascade Pharmaceuticals have established a presence here.[99]
○ "Oriental Chip Port": Lin-gang aims to become a world-class IC innovation hub and build a high-level industrial ecosystem with global influence by 2035.[100] This initiative includes projects for 7nm and 8nm advanced process technology, MRAM, 3D NAND, and semi-floating gate memory.[101]
○ Specific Research Institutes: The area hosts key research entities such as the SMIT Group EDA R&D Center, the Shanghai Lin-gang Power Electronics Research Institute, and SITRI's Compound Semiconductor Research & Innovation Platform.[102]
● Collaborations: Lin-gang and Tongji University are working together to upgrade smart cities.[103] Shanghai is also launching a global science and technology partnership program, establishing new labs with countries involved in the Belt and Road Initiative.[104]
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