Investment environment
Competing with China’s coastal areas, Xi’an has its unique advantages, including low costs and abundant human resources, according to Samsung.
The chip project needs a large amount of water and power resources, which are about 20 percent cheaper in Xi’an than in eastern areas.
And the company can also save 40 percent on the cost of labor.
Moreover, the city is one of the birthplaces of the Chinese electronic information industry.
Since the 1970s, Xi’an has been a major research base in the field, with China’s first mobile phone, the first indigenous GPS chipset and TD-SCDMA communication technology standards coming out in the city.
Now, it has more than 50 related research institutes and 2,600 companies.
In addition, a comprehensive bonded area is also under construction in the Xi’an high-tech zone where Samsung’s project is located.
The zone’s administrative committee planned the low-tax area especially for the chip plant as well as its related companies.
But other companies in the zone can also enjoy the services.
The customs clearance service center in the bonded area will open in October.
Samsung and other companies already enjoy preferential treatment.
According to Samsung, the company needs to import 10,000 containers of equipment before the bonded area is open.
And it could enjoy the services beforehand, allowing it to save nearly 6.2 million yuan ($1 million) in transportation fees and customs charges.
The project is prompting more Fortune Global 500 companies in the industry to follow suit.
Today, an increasing number of international technology firms are flocking to Xi’an.
At an investment and trade forum between eastern and western China held in April, the high-tech zone administrative committee signed four contracts worth 2.7 billion yuan.
Two of them are related to the Samsung project. The two investors are both South Korean chemical companies and also important partners of Samsung.
Many other Chinese and foreign companies engaged in the production of chemicals and electronic products also have or will set up production bases in the zone.
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