I. Overview

Jazan city is the capital of Jazan province, Saudi Arabia, and is located in the southeast corner of the Arabian Peninsula, boarded to the south by Yemen, and faces Red Sea on the west. It is one of the important freight and trade stations along the Red Sea coast.

In order to accelerate the development of Saudi Arabia's non-oil economy, the Saudi government established Jazan Economic City in Jazan city in 2005, which is managed by the Royal Commission of Jubail Yanbu. Jazan Economic City is 81 kilometers from the urban area of Jazan, and covers an area of 106 square kilometers. The infrastructure construction of the park is invested by Saudi Aramco, with a total investment expected to exceed $30 billion.

To implement the Belt and Road Initiative and "Vision 2030" major strategic cooperation, with the joint efforts of the two governments, since 2016, Jazan Economic City designed the Jazan Industrial Cluster especially for Chinese enterprises, which includes a 30-square-kilometer industrial zone and a 2-square-kilometer living area, a total of 32 square kilometers. Chinese enterprises registered within this location enjoy special preferential policies, and can freely choose undeveloped areas within Jazan Economic City in which to establish factories. The living area was planned and constructed by the Chinese side to provide living supporting services for Chinese enterprises. The Jazan Industrial Cluster has been listed as one of 20 international production capacity cooperation demonstration parks promoted by the National Development and Reform Commission in 2016, and one of 16 overseas economic and trade cooperation parks supported by the Ministry of Commerce from 2016 to 2017, receiving high attention from all parties.

In January 2019, Yinchuan Yucheng Investment Co., Ltd., Guangzhou Development Zone Industrial Development Group, Saudi Aramco, the Royal Commission of Jubail and Yanbu jointly established Saudi Arabia Silk Road Industrial Services Co., Ltd., as the main implementing entity for the Jazan Industrial Cluster project. The Saudi Silk Road Company mainly provides investment services for Chinese investors in the Jazan Industrial Cluster, aims to improve the local business environment, and actively strives for various preferential policies from the Saudi government.

Jazan Special Economic Zone Overall Planning

II. Planning and Industry Positioning

The Jazan Industrial Cluster is divided into four industrial areas, from south to north: heavy industrial zone, light industrial zone, buffer zone, and living area. In terms of heavy industry, the focus is on developing mineral processing, manufacturing, energy stations, seawater purification stations, fuel storage plants, and power stations. In terms of light industry, the focus is on the development of food industry, logistics service industry, and industrial component manufacturing.

In the Jazan Industrial Cluster, there is the 400,000 barrels per day oil refinery project and the 3850MW gas turbine combined cycle power plant project invested by Saudi Aramco. The SOLB's annual output of its 1 million-ton steelmaking plant has reached production capacity. The ports invested by Hutchison Whampoa and China Harbour have been completed and put into use. In addition, the annual production of the million-ton alumina project invested by Hangzhou Jinjiang Group and the annual production of one million tons of electrolytic aluminum project invested by CMOC are steadily advancing. 

III. Infrastructure

The infrastructure development of The Jazan Industrial Cluster was led by Saudi Aramco in the early stages, 60% of the total investment was invested in capital expenditure (approximately $18 billion). It has now been transferred to the Jazan Royal Commission for management. In The Jazan Industrial Cluster, 90 kilometers of roads have been completed. Meanwhile, urban infrastructure and utilities such as drinking water and the fire water network, waste water network, rainstorm network, irrigation network, power generation and power supply network have all been completed. The Port of Jazan is also fully operational. Transportation is convenient, and the railway line will be extended to Jeddah, Riyadh, and the Eastern Province. In the near future, industrial zones, commercial centers, fishing grounds, agricultural industry centers, and residential areas, and various infrastructure constructions are all being promoted.

In terms of government support, the Saudi Ministry of Investment (MISA) provides one-stop assistance in project documentation, approval, construction permits, business registration, industrial licenses and environmental compliance for invested projects in the economic city.

IV.Preferential Policies

In terms of financial support, the Saudi Industrial Development Fund (SIDF) provides industrial projects with subsidized loan quotas of 50% to 75% of the total project investment with a term of 15 to 20 years. Under the preferential policies, foreign owned enterprises can receive a loan with a maximum amount of 400 million Riyals (about $107 million), and joint ventures can receive up to 1.2 billion Riyals (about $321 million).

In terms of import tariff preferences, enterprises entering the Jazan Industrial Cluster are exempt from low value-added tax and import raw materials tariffs. Professional production equipment is exempt from import tax, and their machinery, equipment, and spare parts used in production are exempt from import tax of 5-12%. Enterprises also enjoy a Zakat reduction and preferential income tax policies especially designed for the Jizan region.

In terms of support for human resources, the Saudi Fund of Development for Human Resources subsidizes enterprises for training Saudi Arabian labor. The subsidies mainly include: A monthly subsidy of 500 Riyals, and a monthly subsidy of 75% of the salary for each student (up to 1,500 Riyals), as well as a subsidy of 50% of the monthly salary upon the start of work after the completion of training (up to 2,000 Riyals for 12 months).

V. Supporting Services

Saudi Arabia Silk Road Industry Services Co., Ltd., a JV established by China and Saudi Arabia, is the main party who’s working on attracting foreign investment and providing services for Jazan Economic City and the Jazan Industrial Cluster. It assists Chinese enterprises preparing to settle in the early stages of material sorting, data approval, construction permits, commercial registration, handling commercial and industrial licenses and environmental compliance. The Silk Road strives for preferential policies and financial support from Saudi Arabia for settled enterprises. Meanwhile, the Silk Road also concentrates on improving industrial supporting facilities, and providing customized living service areas that are compatible with the industry to meet the living needs of employees.

VI.Contacts

Li Zhe, Board Member & General Manager of Saudi Silk Road Industrial Services Co., Ltd

Email: lizhe@saudi-silkroad.com

Kong Lingru, Board Member & Deputy General Manager of Saudi Silk Road Industrial Services Co., Ltd

Email: lingru.kong@saudi-silkroad.com