Khorgos is the Next Shenzhen for Entrepreneurs
Shao Haipeng
/SOURCE : Yicai
Khorgos is the Next Shenzhen for Entrepreneurs

(Yicai Global) May 31 -- China's reform and opening-up program started more than 30 years ago has enabled Shenzhen to transform from a small fishing village to an innovative metropolis.

For Khorgos in the Xinjiang Uygur Autonomous Region, a port city in China near its border with Kazakhstan, the Silk Road Economic Belt and the 21st-Century Maritime Silk Road Initiative (the Belt and Road Initiative) has offered a great opportunity for it to realize a magnificent turnaround a la Shenzhen.

Khorgos has already witnessed tremendous changes after the Belt and Road Initiative was proposed, going from desolation three years ago to a city where construction sites now sprout everywhere and high-rise buildings rise abruptly out of the ground throughout its economic development zone.

Yu Chengzhong, a fruit seller who came from Henan Province to Khorgos 20 years ago, recalled and told Yicai Global how Khorgos was formerly a small frontier town whose east-west extent was only 500 meters. It has now developed into an internationalized emerging city attracting the attention of global investors.

Many years ago, Yu Chengzhong found that the people of Central Asian countries like Chinese vegetables and fruits very much, especially the tropical fruits of South China. Therefore, he has changed his business from a traditional frontier trade and gradually become an important fruit trader in the locality.

In 2010, he established Khorgos Jinyi International Trade Co., exporting 26,400 tons of fruit in that very year. After the Belt and Road Initiative was proposed in 2013, the company has seen its exports grow by 38 percent annually in the last three years, and exported 60,000 tons of vegetables and fruit last year.

The company's business is growing rapidly owing to the Belt and Road Initiative, which brings unprecedented interconnection for trade between Central Asian, European countries and China, Yu told Yicai Global. The China-Europe Express Train is the best example of this.

As local administrative efficiency greatly improves, more enterprises and businessmen are coming to and investing in Khorgos. An enterprise from Shenzhen constructing plants here said Khorgos is like Shenzhen over 30 years ago.  

Khorgos Boshihao Electronic Technology Co. (Boshihao) is a 'star company' that the Khorgos municipal government attracted from Shenzhen. It has come to Khorgos to develop intelligent robots.

When the company's head office had just made the decision to construct a plant in Xinjiang, almost everyone rejected the idea, recalls Min Jianbo, Boshihao's general manager. "Xinjiang is too far and too strange for any senior manager to go voluntarily," he said.

The company was able to finally make this decision because of the company's confidence in Khorgos' unique regional advantages and policy advantages, Wang Haixia, the firm's chief managing director, told Yical Global.

Boshihao's business mainly relies on overseas orders. By building a production line in Khorgos, the firm can save time costs and economic costs.

Boshihao's products can arrive in Europe directly from Khorgos by China-Europe express train in 30 days. In contrast, products transported to Europe via ship take at least 90 days. For foreign trade enterprises, the time saved can accelerate the payment collection cycle and ease funding pressure.

Moreover, the Khorgos Government offers attractive policies such as corporate income tax exempted for five years and halved after that. More importantly, enterprises can expand into the central Asia and even the entire market along the Belt and Road.

Since intelligent manufacturing needs support of technology, upstream and downstream enterprises, the settlement of Boshihao means arrival of its partners in upstream and downstream industrial chain later, in the view of the Khorgos government, which wishes to drive local development of high and new technology via this opportunity and promote industrial structural transformation and upgrading.

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Keywords: BELT AND ROAD , Khorgos , CR Express , Central Asia, Fruit, Trade, Robot, High-Tech