Xinjiang Hualing Industry & Trade (Group) Co. Ltd

Xinjiang Hualing Industry & Trade (Group) Co. Ltd (hereinafter "Hualing Group") was founded in July 1988. It has now more than 20 subsidiaries. It is a private conglomerate group which diversifies into commercial service, real estate development, international trading, livestock husbandry, logistics, overseas investment, landscaping, heating power, financial industry, education,etc. Hualing Group owns commercial real estate with total areas of over 3.6 million square meters.

Since its foundation, Hualing Group has maintained a market-oriented development, targeted "big market and big circulation", adhered to the development principle of "basing on Xinjiang, serving the nation, and radiating through Asia and Europe", and insisted on the business culture of "people-oriented, honest and trustworthy". It is the core of the enterprise to "develop the economy vigorously, promote national unity, and actively return to society".Under the lead of Xi Jinping's thought of Socialism with Chinese characteristics in the New era,with the support of party committees and governments at all levels, Hualing Group continues to grow along with the reform and opening up and construction of socialism market economy.

So far, Hualing Group has five large comprehensive markets in operation in China, namely "Urumqi Hualing Comprehensive Wholesale Market", "Southern Xinjiang Hualing Wholesale Market" , "Hualing Second-hand Car Market ", "Hualing International Jewelry and Jade City", "Hualing Market Building Material Export Base" . With more than 28,000 business vendors, the markets have created more than 100,000 jobs, promoted regional economic growth and increased tax revenue.

Since 2007, the Hualing Group actively responded to the strategy of “go global”, and devoted into the construction of “ the belt, the road”.The Hualing Group has invested in several projects,for example, the forest harvest and timber processing project, stone mining and processing projects,Georgia Hualing Free Industrial Park,Hualing International Special Economic Zone, Basisbank, etc. After 10 years of development, Hualing Group is well-known in countries of central-western Asia and East Europe. Based on the five major domestic markets, relying on Georgia's special economic zones and industrial parks, the Hualing Group will gradually develop the markets of Central and Western Asia and Eastern Europe, and the positive interaction between“Hualing Market”both in domestic and foreign countries,and continuously expand the radiation of Hualing market.

1.      Hualing market with massive scale

(1)The Urumqi Hualing Comprehensive Wholesale Market

The Urumqi Hualing Comprehensive Wholesale Market is located in the center of the city covers a land of 1 million square meters. The market has over 1 million square meters commercial area, and it has become the largest comprehensive commodity market in Central Asia, with the customer flow over 100,000 people per day and the vehicle flow over 20,000 per day. About 10,000 business vendors are engaged in selling products. The market includes 3 large commercial buildings—"Hualing International Trade & Commercial Square", "Hualing Trade Center" and "Hualing Ceramic Sanitary Ware Market", as well as fur products section, non-staple food section,dried fruit section,general merchandises section, local speciality section, market for flowers, birds and fish,pet supplies area.The market has become the largest comprehensive commodity market in Central and Western Asia, which have formed a commercial circle independently.

 (2)The Southern Xinjiang Hualing Wholesale Market.

The Southern Xinjiang Hualing Wholesale Market is founded in July,1999. The martket is located on NO.16, Beishan Road, Korla City, which covers an area of about 1.3 milion square meters. The market has great advantages of strategic location and convenient transportation of goods, with 314 State Road lying in the north, Southern Xinjiang Railway Line lying in the south. And the North Korla Rail way station and Bazhou long-distance bus station is just around the market. It has developed into 5 operating section, including the furniture market based on the trade center, building material and decoration market, hardware market, steel market, stainless steel market.There are more than 3000 vendors with nearly ten thousand employees, who are trading more than 30,000 varieties of products of dozens of categories.It has a customer flow over 20,000 people per day and the vehicle flow over 15,000 per day. The market has become the largest market in southern xinjiang with full range of goods, convenient transportation, excellent facilities, and can radiate 5 prefectures of Southern Xinjiang as well as surrounding countries.The market has developed into the largest trade center in logistics industry of Southern Xinjiang.In October 2007, 30 million yuan was made for the construction of the central heating station in southern xinjiang, which solved the heating problem in the northern area of the railway. In 2014, Hualing Group has invested in the Hualing International Home Furnishings Plaze Plaze(Korla),which has a building area of 120,000 square meters. It has a strong sense of modernity and prominent geographical features. It was put into use in August 2017 and officially opened in June 2018.The market has been planned into the overall construction planning of Korla city by the government of Korla city and Bazhou county, as the first among nine important economic growth points.

 (3)"Hualing International Jewelry and Jade City"

Hualing International Jewelry and Jade City is located in NO.2, East Kunlun Road of the center of the Urumqi city. With large parking lot and convenient transportation,it covers an area of about 100 thousand square meters. East of it is North Nanhu Road, and the administrative office area of municipal government lies in its South.

The first floor: the largest market of complete categories of automotive decoration materials  in Xinjiang;

Basement 1: wholesale and retail of jade raw materials, silicified wood, crystal and others;

Second floor: high-end boutique jade, jade Taobao / e-commerce;

Third floor: jade , jewelry, jade, tourmaline and other jade categories;

Forth floor: stone, agate, Colored Gemstone, boutique jade (shop mode) and raw materials sales;

Fifth floor: seed material market, Xinjiang Hualing Hotan Jade trading center, cultural industry park, Jade Culture Gallery, Xinjiang Hotan Jade Chamber of Commerce, Hotan Jade Shopping Hall, the exhibition and sales hall for foreclosed Hotan Jade (these Hotan Jade, which are placed in this exhibition and sales hall, are foreclosed collaterals of Banks) and the Yuyuan Pavilion painting and calligraphy hall.

It is adjacent to BRT3, BRT7 and South Lake Road Station o f Metro Line 1, there are many bus lines in all directions and more than 1,000 outdoor parking spaces to meet the parking needs of all operators and consumers.

Since the beginning of operation in 2010, with more than 5000 vendors, it has become a raw materials, jade article of Hetian Jade and jewelry distribution center of Xinjiang and even the Northwest region, which means the largest size, most vendors and complete categories. In June 2013, with an area of over 5,000 square meters area, the "Hetian jade trading center" is put into operation, it is located on the fifth floor of "Hualing International Jewelry and Jade City". In 2014, the "Xinjiang Hetian jade Chamber of Commerce "has been set up. It is based on the vendors of "Hualing International Jewelry and Jade City" as the main body and has absorbed other well-known dealers in Xinjiang, which has added a beautiful landscape for the "Hualing International Jewelry and Jade City". Hualing International Jewelry and Jade City, rated by Xinjiang Tourism Bureau as a Grade 3A tourist cultural scenic spot, has become one of the most important attractions for tourists to Xinjiang.

   (4)Hualing Market Building Materials Export-import Base

Hualing Market Building Materials Export-import Base is located at the forefront of Urumqi city－Midong District, with Hetan Road in the west and Midong Avenue in the east, which occupies a total area of more than 2.2 million square meters. The market is divided by Northern Urumqi’s main road into two operating sections in the north and south. More than 11,000 shops, which occupy 100 million square meters, have been put into operation. Among them, the Hualing Logistics Park and Second Class National Port Zone cover an area of 667 thousand square meters. As the largest leading industrial zone, which also owns the most concentrated logistics service enterprises of road transport and the most complete facilities, it covers more than 85% road transportation volume of Xinjiang Autonomous Region. It is not only the distributing center of supplies which sends goods of Xinjiang to prefectures, cities and Regimental Farms, but also the distributing center of goods which sends to surrounding countries from Hualing National Second Class Port. It is committed to creating the best one-stop shopping chain market of high-middle quality of household appliances—Xinjiang Hualing International Household Square, not only in the northwest region, but also the Central and Western regions. Xinjiang Hualing International Household Square is located in the south of the market,with a building area of 100 thousand square meters,which is officially opened in September 2017.

(5) Georgia Tbilisi Sea Commercial Square is located in Georgia Hualing International Special Economic Zone, including a 5-floor main building of 120,000 square meters, a building materials market of total 20,000 square meters, a tariff-free zone of 10,000 square meters and turnover area of 90,000 square meters, which is the main business projects of the Hualing International Special Economic Zone. It has already attracted lots of merchants from China, the United Arab Emirates, Kyrgyzstan, Kazakhstan, Ukraine, Turkey, Georgia and other countries to sell goods covering: clothing, daily necessities, all kinds of basic building materials, decorative building materials, electronic products, office supplies, advertising supplies, all kinds of furniture. It is expected to directly create over 3500 jobs in Georgia, indirectly driven nearly hundreds of thousands of employments. In the future, Hualing Group plans to build the largest modern commercial and trade metropolis with the highest scale in the region of Transcaucasia and Black Sea Rim, which includes market, hotel, tourism, trade, restaurant, recreation.

(6)Hualing Second-hand Car Market.

Hualing Second-hand Car Market, located in the T road of Wangjialiang, No.278 North Nanhu Road, Shuimogou District, Urumqi, is the earliest second-hand car market in Urumqi. It covers an area of 120,000 square meters and nearly 200 merchants.The market has completed a second-hand car trading industry chain,including second-hand car and vehicle trading, training for driving license, mortgage loans, assessment, identification, maintenance, decoration, cleaning and work place. The Hualing Second-hand Car Market has learned advanced management and operation mode, improved ancillary services and facilities, elevated service quality, which won the trust and praise of customers. And finally it enjoys a good reputation in the second-car industry in Urumqi, as well in Xinjiang. In order to make the second-hand car services to be more professional and more influential, and to make a fair trade platform between consumers and suppliers, a vehicle inspection agency named Urumqi Yanding Motor Assessment Fair Trade Supervision Complaints Department has been set up to protect the rights and interests of consumers effectively.

 (7) Hualing Modern Livestock Husbandry Industry.

Hualing Group has decided to invest in "livestock husbandry" project, which has focused on the construction of breeding base cattle and sheep, modern meat processing, cold chain logistics, and construction of wholesale meat market. This project has 1 automated cattle slaughter line, 1 automated sheep slaughter line, 3 semi-automated cattle slaughter line and 1 semi-automated sheep slaughter line. So far, Hualing Livestock Husbandry Industry Development Co., Ltd has already became the largest company to supply beef and mutton in Urumqi, and has become the supplier of government meat reserves. Hualing Livestock Husbandry Industry Development Co., Ltd, which is responsible for the above-mentioned project, has been identified as "the leading enterprise of agricultural industrialization in Xinjiang Autonomous Region", and the "Hualing Livestock Wholesale Market", which is built to support this project, has been identified as the designated market by the National Ministry of Agriculture.

In 2017, Hualing Group invested in the “ Hualing high-quality educational real estate – “Hualing Ancient Beauty Town”, and joined hands with Huabing Experimental High School in Urumqi to create an international modern private school. The Huabing Experimental High School will be the largest private school in the area of teaching building, size of the school and investment. The school has been completed and officially opened for new students on September 1, 2018.

Hualing Ancient Beauty Town is located at No. 1388, North Hetan Road, Midong District, Urumqi. It covers an area of 76667square meters. And the exhibition center is just located in its west.The campus has a total construction area of nearly 160,000 square meters, including two 6-story teaching buildings, a comprehensive sports trial building, a 27-story apartment buildings for student and teachers, a kindergarten building, a sports field and a swimming pool. The school can provide education for children from 0-18 years old, including baby education, preschool education, primary education, junior high school education, high school education and international preparatory class education.

After 30 years of development, Hualing market now provide various services, including industry and commerce, taxation, quality supervision, finance, telecom, second class port, information, logistics, catering, accommodation, etc. Hualing Group has formed a complete industry chain centered on the construction, cultivation, management, and services of the Hualing market, including the import and export company, the port trade company, the asset management company,the logistics company, the property management company ,the heating power company, the real estate company,the 5-star Hualing Grand Mercure Hotel, the advertising company, the pawn company, the bank,and the transport company, etc.

2. Hualing Group and the Silk Road

Before 2007, Hualing Group had been concentrated on building big market and boosting big circulation. With the support of party committees and governments at all levels, government functional departments, chamber of commerce, and industrial association, and relying on Hualing market, Hualing Group successfully held "the Western China (Xinjiang • Hualing) International Construction Material Fair" for 10 consecutive years, which contributed to the communication and exchange of people and various products with the neighboring countries along the Silk Road. Thus, Hualing Group has established a good relation with relevant enterprises in the neighboring countries, chambers of commerce, government departments, etc. Hualing Group and Hualing market has enjoyed wide popularities and good reputations in the neighboring countries, especially in countries and regions of Russia, Central Asia, Western Asia, Eastern Europe, which also laid a sound foundation for the Group's layout of development along the Silk Road.

In order to have a new profit growth point, and to realize sustainable development, Hualing Group has formulated a medium and long term plan for development. The group will consolidate its origin by continuously improving the existing market, livestock husbandry and other projects, on the other hand, make full use of the geographical advantages of Xinjiang and the influences of Hualing market among the neighboring countries, actively implement "go global" strategy, take part in the competition on the international market, and strive to achieve sound and rapid development.

In 2007, Hualing Group purchased a forest harvest license with timber right for 88,000 cubic meters per year for 20 years in Georgia, and started to pay its attention to Georgia gradually. With its beautiful natural environment, good social order, clean government, high efficiency, and good business environment, Georgia has left a deep impression on the Group.Therefore, since 2009, Hualing Group successively built two timber processing factories in Georgia, and obtained the exploration and exploitation rights of polymetallic ore, stone mine, limestone mine, and other resource projects. The Group also purchased the land with the area of over 667 thousand square meters to build the free industry zone, and started its implement of new market construction along the Silk Road.

3. Investments in Georgia

The investments of Hualing Group in Georgia not only obtained good economical and social benefits, but also received high attention and substantial support from Chinese and Georgia governments and other relevant departments. With the support and encouragement from these two governments, the following projects have been carried out:

（1）The forest harvest and timber processing project in Georgia

From 2007 to 2008, Hualing Group purchased a beech harvest license with timber right for 88,000 cubic meters per year for 20 years in Georgia through auction, the total area is 84,284 hectares. At present, Hualing Group has a complete management team and operating team in Georgia. The project has formed a logging capacity of 60,000 square meters, timber processing capacity of 40,000 square meters, realizing annual output value of 10 million US dollars. Products can be sold to countries in Central Asia, the Middle East, the European Unio, while promoting local employment of 1,000 people, which also promoted the local economic development.

（2）Georgia stone mining and processing projects

In 2011, Hualing Group purchased four stone mine ownership, total reserves of 2.15 million cubic meters in Georgia through auction. Each year the project can provide 300 thousand cubic meters stone products. The project promotes China's small and medium enterprises "going abroad" to achieve diversification of origin, ease trade friction, export technology and management experience, and gradually change the mode of foreign trade development. The project not only provides lots of jobs, but also become a new economic growth point, effectively promote the local economic development, promote the development of related industries.

(3) Basisbank

In September, 2012, Hualing Group acquired 90% shares of BasisBank in Georgia. This acquisition was named as one of the ten China’s best overseas investments at the second China Overseas Investment Summit (2012), which is held in Hong Kong. It is known as "an important milestone not only to Hualing Group, but also to other Chinese private enterprises and even all non-financial enterprises". Since Hualing Group performed as a 100% shareholder of Basisbank in end of 2014, the business scope of the bank was expanded, the business outlets was increased to 19, the net assets had a 2.2 fold increase, and the profitability had a 2 fold increase, and its ranking has risen from 11^th before the acquisition to 6^th in the Georgian banking industry as of 2017.

 (4)Georgia Hualing Free Industrial Park, located in Georgia's second largest city - Kutaisi City, close to the Black Sea famous Port of Batumi, Port of Poti, covers an area of 66.67square meters and a total investment of 150 million US dollars. The tax-free industrial zone can be classified into the new customs office area, the customs supervision area and the industrial processing area according to different functions. The business scope of the zone includes wood processing, furniture manufacturing, stone processing,steel, ferroalloy manufacturing, plastic production, building materials trade, logistics and so on.And there are relative supporting services provided for the duty free industrial zone,including newly renovated office buildings, staff dormitories and residential apartments, commodity exhibition centers, hotels, commercial centers, etc. Complied with "Free Industry Zone Act" of Georgia, Hualing Group invested in the Hualing Free Industry Zone, investors of the zone enjoy tax-free incentives of Georgia tariff, value added tax and property tax.Products of the zone enjoy advantage of zero-tariffs if imported to European countries and if sold to Georgia,only charge only charge 4% of the customs service fee. Therefore enterprises can reasonably avoid the trade barriers lifted by European countries and  reduce the operating costs.

(5)In July 2012, "Hualing International Special Economic Zone" of over 4.66 million square meters held foundation laying ceremony in Georgia. The initial investment of this project is USD 300 million.Healing ISEZ, a project issued by Presidential Decree, is approved by the Parliament of Georgia. The overall layout of this project is “One Axis, Two Wings, and Three Blocksc: “One Axis” refers to as the central landscape axis; “Two Wings” refers to as the market area and living area, the layout which looks like wings of a butterfly; “Three Blocks” refers to as market and commercial supporting block, residential and living supporting block, and waterfront recreation and tourist resort block. For the purpose of promoting the formation and development of the "Black Sea International Commercial and Trade Rim", Hualing Group built the largest modern commercial and trade metropolis with the highest scale in the region of Transcaucasia and Black Sea Rim, which includes market area, processing area, tourism, trade and display area, restaurants, five-star hotels, and entertainment area. Now, part of the market area has been put into trial operation, which includes the main operating building of the market area, hotels, residential buildings, fitness center, warehouse area, trade and display area, etc. In September 2017, a five-storey main market building with a total length of 500 meters and a building area of 120,000 square meters was officially opened.

The Georgian government has granted a number of favorable conditions for the Hualing Special Economic Zone to ensure the investment rights and interests of the "Special Economic Zones" project. For example, preferential policies of exempting all construction parties within 10 years can be given to the construction party; free trade zones can be set up in the Hualing International Special Economic Zones, processing equipment, machinery, supplies and materials required by enterprises in the bonded areas can be exempted from import duties and added-value tax. At the same time, a tax-free industrial zone can be set up in Hualing International Special Economic Zone to enjoy the preferential policies of the current Georgian tax-free industrial zone law. Taxpayers who enter the special economic zones can be given a low value-added tax rate of 3% -5% only.

In order to promote the economic and trade exchanges between China and Georgia, and to increase investments in Georgia, from 2012, the Foreign Trade Development Bureau of the Ministry of Commerce, Department of Commerce of Xinjiang Province and Urumqi Municipal Government successfully hosted the "Georgia China Xinjiang Export Commodity Exhibition Fair" for 5 consecutive years in Hualing International Special Economic Zone in Tbilisi. And the fair's organizers and co-organizers were several government departments of Georgia and China. A number of Chinese enterprises have invested in Georgia. Over 100 enterprises had been invested in the Hualing International Special Economic Zone in Tbilisi and the tax-free Hualing Free Industry Zone in Kutaisi. Nearly 300 enterprises have found their agents and partners here.

Hualing Group’s main goal is to base on the geographical hub of Asia, which is the market of Xinjiang，face Asia and Europe, which regards Georgia Hualing International Special Economic Zone as the frontier, develop along with the "Economic Belt of the Silk Road", gradually expand the market of Western Asia and Eastern Europe, increase the radiation power of Hualing market, and progressively make Hualing market a bridge between Asia and Europe.

The national “One Belt, One Road” strategy initiates that “On land, the Initiative will focus on jointly building a new Eurasian Land Bridge and developing China-Mongolia-Russia, China-Central Asia-West Asia and China-Indochina Peninsula economic corridors by taking advantage of international transport routes, relying on core cities along the Belt and Road and using key economic industrial parks as cooperation platforms” and also promotes that“We should explore a new mode of investment cooperation, working together to build all forms of industrial parks such as overseas economic and trade cooperation zones and cross-border economic cooperation zones, and promote industrial cluster development.”Hualing Group's investment projects in Georgia is totally in accordance with the strategy. The investment project has received great attention and strong support from the governments of China and Georgia. Hualing Group has become the most well-known and representative Chinese-funded enterprise in Georgia and has been highly appraised. To this end, Mr. Mi Enhua, Chairman of the Group was awarded by the Prime Minister of Georgia as the "Best Foreign Entrepreneur ".