INVESTMENT ENVIRONMENT

Yanbian Korean Autonomous Prefecture was founded on Sep. 3,1952. It is the largest region where ethnic Koreans live in compact communities and the only minority prefecture in northeast China. There are 6 cities (Yanji, Tumen, Dunhua, Longjing, Hunchun, Helong) and 2 counties (Autu and Wangqing) in the Prefecture. The total area is 42,700 square kilometers, which is about a quarter of the area of Jilin Province. The relief map shows the three land forms, a mountainous region, hilly land and basin,the physical features-high in the west, low in the east. The total population of Yanbia is about 2,185,500, of which 58.34% are Chinese, 38.76% Korean, 2.9% are other minorities. Since the foundation of the Prefecture, The Party and the State have been paying great attention to construction and development of Yanbian. Zhou Enlai, Zhu De, Deng Xiaoping, Jiang Zemin, Li Peng and other leaders of the Communist Party and the State have come to inspect Yanbian. They exhorted "build up Yanbian Korean Prefecture faster and better" (inscription by Deng Xiaoping); "build up Yanbian Korean Prefecture as a model prefecture", "develop Hunchun, develop Tumen River, develop the relationship between Yanbian and northeast Asian countries" (inscription by Jiang Zemin).

Special Physical Geography: Yanbian Korean Autonomous Prefecture has a common border with Russia and D.P.R. Korea. Yanbian Korean Autonomous Prefecture neighbors with Primorski Krai of Russia in the east (the border is 522.5 kilometers in length), and with Hamkyoung Buk Do and RyangKang Do of D.P.R. Korea across Tumen River (the border is 232.7 kilometers long), total 755.2 kilomters. Yanbian is an important crossroads which connects the northeast with other southern places. Being supported by the vast hinterland of Jilin, Heilongjiang and Liaoning Provinces, Yanbian is the intersection point of economy, population and geography of Northeast Asia, and plays a pivotal role linking Asia, Europe and America transportation systems. In the frontier area, it is served by convenient trans-port and communications networks. There is excellent sea, land and air transport network. Hunchun has good transport routes, i.e. to ROK's Pusan via DPRK's Lajin, toe Japan's Akita via Russia's Posyet, to ROK's Sokcho via Russia's Zarubino etc. Sino-Russia Hunchun-Kamyshovaya international railway is already in use. There is very convenient highway network. Yanbian Highway Passenger General Station is the largest in northeast China. Changechun Hunchun high class highway is already in use. Hunchun-Quanhe super highway is under construction. After the second stage transformation, Yanji Airport now can receive large and middle airliners. The airport meets the national 4C standards. At presents, a total of twenty domestic air routes, such as to Beijing, Changchun, Senyang, Dalian, Shanghai etc. are available. On August 11,2001, the international charter air route Yanji-Seoul-Yanji was opened. On August 4th, the Korean Air opened an-other international charter air route Seoul-Yanji-Seoul. Currently, there are ten frontier crossing ports in Yanbian (of these, eight Sino-North Korean frontier crossing ports, and two Sino-Russian frontier crossing ports). The service is more and more complete and satisfactory. Five milliontons of goods, and one million passengers pass through these ports every year.

Rich Natural Resourses: Located in Changbai Mountain Area, Yanbian has quite a large territory and is rich in natural resources. Out of the total area of agricultural land, forest land accounts for 87%, cultivate land 6%, and grassland 6%. Per capital land is 27.43 Mu, Per-capital cultivated land is 3.7 Mu, higher than the averages for the country and Jilin Province. There are about 487 rivers in Yanbian area, annual runoff is 9.715 billion cubic meters, underground water reserves are 2.74 billion cubic meters, recoverable reserves 1.325 billion; hydroenergy reserves about 1.4 million kilowatts, actual production is 47 thousand Kilowatts, the capacity under construction is 85 thousand Kilowatts. Yanbian is part of the national forestry base. The forest territory is 3.472 million hectares, forest coverage is 78.2%, the total reserves are 332 million cubic meters. There are over 1,800 kinds of wild economic plants, among which 875 kinds of wild economic plants, among which 875 kinds are medicinal plants. Also, there are over 500 kinds of wild animals. Ginseng, pilose antler and marten are called three treasures in of the Northeast; there is rice, tobacco, pearapple, cattle, etc. famous at home and abroad. There are over 50 kinds of metal deposits and 40 kinds of nonmetal deposits. The reserves and output of gold occupy important place in Jilin Province; the chalk reserves are 98 million tons, the first in Jilin Province; the coal reserves are 1,200 million tons, the annual output of coal is 4.14 million tons; 100 million tons of petrol reserves has been verified by magnetic air survey.

Well-developed Culture & Education: Yanbian Government attaches great importance to culture and education, Yanbian people have high educational degrees, so it is known as a land of education. Having been included into "the 211 Program" by our Central anthorities, Yanbian University is a comprehensive university with national minority features, where there are 7 colleges: agricultural, medical, science and engineering, etc. There are also 7 Higher educational institutions and Junior degree colleges. There are 304 people receiving higher education (over college-level) for every 10 thousand people, this standard is higher than that of our country and of Jilin Province. There are over 124 thousand science and technological professionals-567 people of science and technological staff for every 10 thousand people. Yanji is highly urbanized, so the workers' quality is higher than that of similar grade places.

Famous Scenic Spots: Yanbian has its own special natural and man-made landscape. Changbai Moun tain is well-known to the world for its splendid scenery and because of its special geographic position, Fangchuan, Hunchun is famous for the saying: The cock's crowing can be heard by three countries, and the dog's barking will disturb three countries. Dunhua Liudingshan Zhengjue Temple is a famous place of Buddist worship. Particularly interesting natural border scenery, unique Korean folk customs and varied, historic culture attract plenty of tourists from home and abroad every year. The tourism figures for last year are excellent, 15.0899 thousand foreign tourists (91% more than the corresponding period of previous year) and 140.9 million domestic tourists (8% up) have visited Yanbia. The China-D.P.R.K border sightseeing train has been brought into service, and the (China-D.P.R.K) Longking-Chilboshan, the Yanji-Pyongyang travel lines are already open to tourists. Over a thousand tourists from R.O.K. Cme to Yanbian by the new (ChinaRussia) travel line-Zarubino to Sokcho, shortly after is was opened.

Great Potential of Export-oriented Economy: Yanbian is a place where Korean minority citizens live in compact community. There are 847 thousand ethnic Koreans in Yanbian, which in 43% of the total number of Korean in China. According to census, there are about 5 million ethnic Koerans in the world outside "the Korean Peninsula". Over 2 million ethnic Koreans live in China. Other Koreans are scattered in Russia, Japan, U.S. Canada, Australia, Hongkong and Macao, etc. The Koreans who live in Yanbian maintain good relations with the friends and relatives in the above-mentioned countries and regions. These relationships bring special advantages and create the good conditions which help to bring in funds and talents, as well as develop export-oriented economy and international cooperation. Marking full use of the advantages of relationships and geography, adhering to its great economy-trade strategy, taking flexible measures, the foreign trade of Yanbian has realized great achievements. The barter trade between China and D.P.R.K., China and Russia are quite lively. The number of foreign projects and labour market service are increasing; the scale has expanded steadily. By the end of 1999, 600 foreign invested enterprises have been approved to be set up in the prefecture, and the actual utilized foreign funds amount to 680 million dollars.

Characteristic Economy is its Embryonic Form: Medicine, food, energy minerals, forestry produce, foreign oriented economy and trade, tourism etc. have become the pillar industries in Yanbian. The inner structure of agriculture has been adjusted, and the proportion of processing industries for livestock husbandry and farm products is increasing. The secondary industries (this being the dominant factor) are rapidly developing. There are over 10 major branches like wood processing, papermaking, medicine, tobacco, textile, energy, construction material, chemical, etc. and some famous enterprises, such as Yanji Tobacco Factory, Jilin Yasong Industry Inc Shixian Bailu Papermaking Co., Ltd., Jilin Aodong Medical Inc, Yanbian Aluminium Group Company, etc.

Preferential Policy: Yanbian is a border and minority nationality open area, so special consideration is given to Yanbian regarding its capital sources and favora ble preferential policies by our central government and Jilin Province. Yanji city is a national comprehensive full reform range experimental city, Chaoyangchuan Town is a national grade comprehensirve reform experimental town. That is to say, Yanbian is sharing in the preferential policy for the development of the Westerm Areas. At the same time, we actively make the most of the preferential policy, provide the best environment, the best service to give Yanbian a good investment environment.

Good Opportunity Brought by Current Situation: At present, the economic situation of the countries around Tumen River is getting better and better. Russia pays more attention to the development of the Far East, the situation on "the Korean Peninsula" is more relaxed, the relationship between Japan-D.P.R.K. Japan-Russia, Russia-R.O.K. is developing. Further, China has joined the WTO, this will help to accelerate the world economic integration and there will be a bright future in the international cooperation development of the Tumen River Area. The Chinese government attaches much importance to the opening and development of the Tumen River Area, and has formulated actual step by step policy. Several major items concerning the development of Tumen River Area, such as the item of opening the international port in Yanji Airport, the item of Jiangmifeng- Hunchun highway, the item of reconstruction of Hunchun Power Station, etc. will be brought into "the Tenth-five Year Plan" and "2015 Long-range Plan" of our country and Jilin Province. In 1999, our country and Jilin Province readjusted the development and coordination group for Tumen River Area, and held the first group plenary session. The second group plenary session was held in Yanji in 2000. A new boost to international cooperation and development of Tumen River Area has been provided by the granting of preferential policies for the Development of China's West-which brought more opportunities to the economic development of our prefecture. With the globalization of the world's economy, and the incorporation of the regional economy the international cooperation and development of Tumen River Area is entering a new development stage. The Yanbian Korean Autonomous Prefecture will be built as a newly developed area, where there is a prosperous economy, forward-looking society, preferential policy and good opportunity of trade.