NNOVATION AS VANTAGE POINT

Innovation is the most valuable asset of Anhui ingrained in its DNA and a strong momentum for development

in its blood.

Anhui merchants, active during the Ming and Qing dynasties, created then advanced business models with their

bold, innovative and pioneering spirit and represented one of China’s most influential merchants groups. In the

1970s, Xiaogang Village in Fengyang County, Anhui, unveiled the big curtain of Chinese rural reform.

With its resource advantage and sustained tradition of bold pioneering and innovation, Anhui is getting better

at building itself into an innovator and striving to transform itself from a latecomer to an equal rival and even a forerunner.

Anhui boasts rich science and education resources. Anhui is home to 109 institutions of higher learning

including the University of Science and Technology of China (USTC), 23 national key projects/ laboratories, 34

national projects/ technology research centers, more than 4,800 R&D institutions, and more than three million

professionals and technicians, with the growth rate of invention patents granted ranking at the 1st place nationwide for two consecutive years.

Specifically, Anhui houses a group of new R&D institutes, including the Institute of Advanced Technology, USTC,

Intelligent Manufacturing Institute, Hefei University of Technology (HFUT) and Hefei Institute of Technological

Innovation, CAS. Anhui is also home to 70 national S&T innovation bases and 209 academician workstations. The

first 10 provincial labs and 10 provincial centers of technological innovation are under construction.

Anhui has a constellation of innovation platforms. Hefei is one of the three comprehensive national science

centers (alongside Beijing and Shanghai) being established upon state approval. Anhui is stepping up its pace to

construct the Hefei Comprehensive National Science Center, Hefei Lakeside Science City, and He-Wu-Beng National

Independent Innovation Pilot Zone, and systematically pushing ahead the establishment of four main innovation

platforms under the “four ones” policy (i.e., one promotion conference, one guideline, one implementation plan and one working mechanism) to establish the province as an experimenter for all-round innovation and reform.

Hefei, the provincial capital, boasts the densest pool of national large-scale scientific facilities second

only to Beijing, including the completed Hefei Synchrotron Radiation Facility (HSRF), Experimental Advanced

Superconducting Tokamak (EAST), and Steady High Magnetic Field Facility (SHMFF). In addition, Hefei is building a

range of innovation platforms including the Institute for Quantum Information and Quantum Technology Innovation,

United Microelectronics Center, Ion Medical Center, Decentralized Intelligent Energy Integration and Innovation

Center, and Megagene Center.

Anhui is seeing accelerated innovation and reform. Anhui, in order to carry further the S&T management

system reform, is leading “staffing turnover pool” pilots in province-run universities and accelerating the reform of management system for “three rights” (rights to use, disposal and proceeds, respectively) of technological results.In terms of strengthening the cultivation and introduction of top talent, Anhui has seen an addition of 143 talents under the National Thousand Talents Program and cultivated and introduced 115 top-notch talent teams over recent years.

Anhui is creating a swell of innovations. Mozi, the world’s first quantum science satellite, was successfully

launched here. Beijing-Shanghai Backbone, the world's first ever thousand-mile quantum secure communication

network, has been fully opened for traffic. Anhui is a world leader in quantum communication.

Benefitting from its strong sci-tech strength, Anhui has seen fruitful results in information display, intelligent

voice and other fields. iFLYTEK has been a champion of the Blizzard Challenge, a synthetic voice contest, for

12 consecutive years. Anhui’s innovation capability ranks firmly among the top array nationwide, with sci-tech

progress contributing to 56% of economic growth.

Innovation has emerged as the strongest engine powering Anhui’s economic growth and the most distinct

feature of the era. At present, Anhui is a weighty player in the big chessboard of nationwide innovation, positioning itself as a major force that represents China in global technological competition and cooperation. Going forward,Anhui will continue to establish itself as an important carrier and cradle of Chinese basic research and original innovation, in a view to adding dynamism to an innovative China and presenting more opportunities for innovation cooperation for businesses and talent at home and abroad.

MANUFACTURING AS MAINSTAY

Manufacturing is the muscles and bones of a nation, while Anhui is a hard core of Chinese manufacturing,

traditionally playing a key role in the development of this sector. Masonry drill unearthed at Lingjiatan Ruins,

Hanshan County, Anhui, embodies the wisdom of ancient Chinese and is an epitome of tool-making in the Neolithic

Age. Anhui is the birthplace of the world’s first VCD, China’s first home-made air conditioner, and first home-made microcomputer.

To date, Anhui is an emerging manufacturing powerhouse of China.

Anhui houses China's biggest home appliance production base, producing about one fourth of refrigerators,

clothes washers, air conditioners, and color TV sets made in China. It also houses the global R&D center and China Headquarters of the U.S.-based Whirlpool Corporation.

Anhui is the hometown of JAC Motors and Chery, representatives of China’s proprietary brand automakers, with

Chery’s passenger vehicle exports ranking at the 1st place nationwide for 15 consecutive years.

Anhui is also home to Conch Group, the biggest cement manufacturer in Asia, Tongling Nonferrous Metals

Group (TNMG), with its electrolytic copper output ranking at No. 1 nationwide, and Ma Steel, a Chinese mega-size

steel and iron conglomerate.

Meanwhile, Anhui is following closely the new round of industrial revolution and taking solid steps towards

building itself into a manufacturing powerhouse.

Anhui is building an innovative, modern industrial system through three major initiatives, i.e., supporting major

bases, major projects and major special projects in modern emerging industries (“three major initiatives for one

innovative industrial system”). Anhui is committed to fostering an industrial cluster of advanced manufacturing

with global competitiveness to create a provincial “combined fleet” of modern manufacturing. This effort will

primarily target high-end, intelligent, green, choicest and service-embedded segments of manufacturing, seeking

breakthroughs in IC, new-type display, intelligent voice, industrial robotics, new energy-powered vehicles, and high-performance new materials, among other fields.

Today, Anhui is shaping a higher-quality supply system with accelerated pace. This system has seen the

commercial production of the world’s thinnest touch sensor, the completion and operation of the world’s highest

generation LCD production line, the highest outputs of new displays and 6-axis industrial robots in China, a one

eighth share in global laptops production, the inclusion of iFLYTEK intelligent voice technology in China’s four major AI open innovation platforms, and the ongoing cooperation between JAC Motors and Volkswagen aimed at creating new energy vehicle brands with international influence.

In 2017, Anhui’s industrial economy saw good momentum characterized by steady progress and improved

quality and efficiency. Rapid growth was seen in six aggregate indicators of manufacturing powerhouse: a 12.4%

growth in the primary operating revenue of industrial enterprises above designated size, a 19.7% growth in total

profit, enterprises above designated size numbered at 20,449, investment in technological revamp at RMB730

billion, general index of integrated development of informationization and industrialization at 87, and energy

consumption per unit industrial value added down 5.38%.

Particularly, strategic emerging industries have been going from strength to strength. In 2017, provincial

output of strategic emerging industries grew by 21.4%, taking up a 24.7% share in total industrial value added

of enterprises above designated size or a 31.4% contribution to industrial value-added growth of this segment;

the value added of hi-tech industry grew by 14.8%, contributing to 63.5% of industrial value-added growth

of enterprises above designated size; and the number of hi-tech firms totaled 4,310, ranking at the 8th place

nationwide.

FRONTIER FOR OPENING UP

“China's open door to the outside world will never close. It will only open wider!” President Xi Jinping, in his keynote speech at the Boao Forum for Asia Annual Conference 2018, announced China’s major moves for further

opening up in the new era.”

Anhui is a frontier for China’s opening up. During his visit to Anhui, President Xi Jinping noted that Anhui was

favorably located in central China with close distance to seas to the east and with big rivers running through its territory, and well placed as a key node along the “Belt and Road” and the Yangtze River Economic Belt. As a result,President Xi added, Anhui should actively align itself with China's three major strategies to facilitate the opening of big corridors, big platforms and big customs clearance, and ultimately establish itself as a new vantage point for opening up of inland areas.

As at the end of 2017, Anhui registered a total mileage of integrated transport network at 214,000 km.

Land transport: Anhui has built 203,300 km of highways and 1,430 km of operating high speed rails, accounting

for one third of provincial total rail mileage. A high speed rail network centered on Hefei and characterized by “one vertical rail, four horizontal ones and four connected links”, connecting Beijing, Shanghai (via Nanjing), Hangzhou,Fuzhou, Shenzhen (via Nanchang), Chengdu (via Wuhan) and Xi’an (via Zhengzhou). Hefei-Xinjiang-Europe freight train route, directly connecting Hefei, Anhui and Hamburg, Germany, has become an important logistic corridor bridging the Eurasian Continent.

Waterway transport: Anhui’s waterway transport network connects 81% of counties and cities across the

province. Navigable inland waterway mileage runs 6,271 km, including 1,433 km of high-grade waterway. Anhui

section of the Yangtze River Golden Waterway stretches for more than 400 km, with five national-level category-1

open ports (i.e., Wuhu, Ma’anshan, Tongling, Anqing and Chizhou) and the section down from Port Tongling

navigable for 10,000-ton class vessels. By the end of the 13th Five-Year Plan period, it is expected that the combined port throughput capacity in Anhui will reach 700 million tons, with the designed capacity of container terminals hitting 2.80 million TEU.

Air transport: Anhui boasts seven airports in Hefei, Huangshan, Chizhou, Fuyang, Anqing, Wuhu–Xuancheng

and Bengbu respectively. Hefei Xinqiao International Airport is a 4E-rated main hub airport with 51 domestic routes opened and 13 regional or international routes to Hong Kong, Macao, Taiwan, South Korea, Japan, Thailand and Germany, among other destinations. Its air routes network covers 63 medium- and large-sized cities at home and abroad.

A high-quality two-way opening up landscape

In light of its geographical and transport advantages, Anhui integrates deeply in the three major national

strategies for further development. Specifically, Anhui is committed to establishing itself as a major heartland

and hub under the “Belt and Road” Initiative, pushing ahead the construction of Yangtze River Economic Belt and

accelerated integration with the Yangtze River Delta, and proactively aligning with the Beijing–Tianjin–Hebei (BTH) collaborative development region. Such in-depth, open regional cooperation across the board is aimed at space expansion and capacity improvement, in a bid to shape a two-way, interactive and concerted opening up structure at an accelerated pace.

A high-level opening up platform

As a test ground for innovation, an innovation pool and a vanguard for opening up, development zone has

emerged as a major carrier for building an open Anhui economy. At present, Anhui boasts 22 national-level

development zones, including 12 national economic development zones (ranking the 1st in central China and 4th

nationwide), six national hi-tech zones, and four national special customs control zones. There are also 95 provincial development zones, four bonded logistics centers (type B) and 11 designated ports of entry.

Efficient institutions and mechanisms for opening up

Traditionally mercantile and pro-business, Anhui is also creating an optimal environment for opening up. With

trade liberation and investment facilitation in mind, Anhui will establish a “one-stop window” for international trade, replicate and scale up experience and lessons from free trade zone (FTZ) pilots in Shanghai and other cities,and strive to establish an Anhui FTZ, so as to create a rule-of-law-based, international and convenient business climate.

Over the past five years, Anhui has seen its accumulated imports and exports of trade in goods at USD240.6

billion, an annual growth of 6.4% on average, 5.4 percentage points higher than national average; accumulated trade in services at USD31.7 billion, an average annual growth of 23.3%; and accumulated FDI inflows at USD67.3 billion,an annual growth of 13% on average.

In 2017, Anhui recorded total imports and exports at USD53.64 billion, a 20.8% growth, FDI actually used at

USD15.89 billion, a 7.6% growth, and the number of overseas Global 500 companies with offices set up in Anhui

increased to 152.

WELCOME GUESTS FROM NEAR AND FAR  WILLKOMMEN BEI ANHUI

Today’s Anhui is an epitome of a beautiful China with its rich historical and cultural legacy and picturesque

natural landscape.

Today’s Anhui, in its effort to be a first mover in innovation, is fueling high-quality growth with innovative

impetus and presenting an innovative image on the world stage.

Today’s Anhui, holding high the banner of “manufacturing powerhouse”, is cultivating an array of advanced

manufacturing clusters with international competitiveness.

Today’s Anhui, in sync with national strategies, is receiving guests from all over the world with enthusiasm and

open arms.

●Attractive Business Environment with Favorable Policies:

To improve the development environment of real economy, Anhui has rolled out a succession of combined

policies that serve and support the real economy.

A “30-point” opinion document was issued to facilitate stable and healthy economic development.

A series of “10-point” policies were issued over time .

In 2017, on top of the Opinions on Implementing Cost Reduction to Lighten the Burden on Real Economy

Businesses, Anhui rolled out another “10-point policy on cost cut” which is expected to generate cost savings at about RMB100 billion per year for businesses across the province.

Anhui is actively engaged in the “four deliveries and one service” program which involves thousand government

functionaries and covers thousand businesses (“double-thousand program”), i.e., delivering development ideas,

delivering supporting policies, delivering innovative projects and delivering production factors, and serving the real economy.

●Service-oriented Government:

Anhui has carried further the “streamlining, regulation and service” reform, with List of Powers, List of

Responsibilities, and List of Business-related Charges, among other schemes, further improved and six tenths of

matters on the List of Powers of provincial government streamlined. Anhui was the first province in China to roll

out the List of Public Services and List of Administrative Power Intermediary Services, achieving the full coverage of government list-based administration system.

Anhui has furthered the commercial system reform by issuing an opinion document on creating a “four best”

business environment, i.e., with the least red tape, the highest efficiency, the best investment climate and the

greatest sense of fulfillment felt by market players and the wider public.

Anhui has also advanced “Internet plus governmental services”, including the launch of “one-stop e-governmental services” and “non-face-to-face approval procedures”. In 2017, the market saw the entry of an additional 704,000 players, a 17.1% growth.