SHENZHEN: The municipal government of Shenzhen will soon issue incentive policies to boost the development of "headquarters economy", said the vice mayor of the city.

This new type of economic development mode becomes increasingly popular among mainland cities. It means to attract headquarters or research and development centers of transnational and leading domestic companies to fuel economic growth.

"Shenzhen has established a modern industrial system mainly composed of hi-tech, financial, logistic and cultural industries and a group of companies have settled their headquarters here. We now have a sound base to develop a headquarters economy," said Liu Yingli, executive vice mayor of the city.

The administration issued the No 1 government document of 2008 Wednesday on accelerating the development of headquarters economy.

"Headquarters economy has been a significant symbol for the city's competitiveness and modernization. We have observed that nearly all developed cities in the world have had such a transition experience from 'manufacturing base' to 'headquarters base' ," Liu told the media.

Chen Biao, director of Shenzhen Development & Reform Administration, admitted that the headquarters economy was still weak in the city without elaborating its current contribution to the entire economy.

The government set a goal to increase contribution from corporation headquarters to the gross domestic product (GDP) of the city to 9 percent by 2010. Meanwhile, direct contribution to tax income is expected to hit 18 percent.

To achieve the goal, the government is mulling over the launch of a series of incentive polices, said the vice mayor.

"We will improve the policy system, set up a special fund to support the headquarters economy, widen financial channels for corporations, implement more positive land policies and help headquarters recruit quality talents," Liu said.

The special fund will be partly used for the establishment of headquarters and their offices, according to Liu.

Meanwhile, for those who set up headquarters in Shenzhen, the government will give priority to their demands for land and supply them with the land by means of public bidding, he added.

Government figures showed that more than 1,200 Shenzhen-based companies have expanded their businesses to other mainland cities or foreign countries and at least 300 overseas investment companies, from 80 countries and regions, have settled in Shenzhen.

Some 146 of the world's top 500 companies have made investment in Shenzhen, of which 10 set up their regional headquarters in Shenzhen and nearly 30 transnational corporations set up their research and development centers here.

The latest statistics showed that Shenzhen has been the first city on the mainland whose per capital GDP has surpassed $10,000.

(HK Edition 02/02/2008 page2)