A small city in the far northwest of China's Xinjiang Uyghur Autonomous Region has become a 'tax haven' for domestic cultural and film companies thanks to favorable policies the city has adopted to develop its culture and entertainment industries.
Horgos, located on the China-Kazakhstan border, has attracted 1,476 companies from the film and media sectors since it was designated as an economic development zone by the central government in 2011, Wang Gang, Party chief of Horgos, said during a recent forum hosted by the city.
The number of film and media companies registered in Horgos has been increasing by 50 percent each year on average, Wang told the forum on June 23, a forum which focused on cooperation in the film and media industries under the Belt and Road initiative (B&R). Horgos, once a mere stop for trade caravans on the ancient Silk Road, has become a crucial point for the B&R.
Wang said the dramatic increase in the number of film and media companies in Horgos was due mainly to various favorable polices created by the national and Xinjiang regional government as well as the city's uniqueness and industry advantages.
In a policy document regarding the establishment of the Horgos economic development zone published in 2011, the State Council, China's cabinet, stated that companies in "areas of importance" could be exempted from paying any business income tax in the first two years and half in the three years after that. Cultural and tourism sectors are among those areas eligible for tax exemption.
The flood of film and media companies into Horgos has attracted substantial domestic media attention. Some outlets even suggested that the companies only moved to Horgos to take advantage of the favorable policies and to therefore "avoid taxes."
But local officials later rejected this allegation and instead maintained that the city brings many benefits and offerings for film companies.
"These firms are here to take advantage of various opportunities in Horgos to improve their competitiveness", Wang told the forum, adding that the arrival of the companies could also improve the city's image and allow them to contribute to the local economy.
In addition to tax exemption, Horgos' unique natural scenes and convenient transport system also attract companies, Wang Changtian, president of Enlight Media, told the same forum.
Furthermore, cross-border yuan services in Horgos could help companies make investments in overseas projects, Lü Jianmin, chairman of Spring Era Films, added.
