Editor’s note: In December 1st, 2005, The Application for Registration of Expo 2010 Shanghai was approved by the 138th General Assembly of Bureau International Expositions. After its approval, The Application for Registration has attracted extensive attention from all over the world. The Application for Registration is the legal document on the complete implementation program of Expo 2010 Shanghai China, and also serves as the fundamental guideline for the Expo preparation. Therefore, the whole preparation work of the Expo will be the active implementation  process on the basis of the Application.for Registration In order to make it more convenient for all sorts of people home and abroad to understand the Application for Registration comprehensively, we hereby publish the abstracts of the Application for Registration on the official website of Expo 2010. The following is the “Application for Registration of Expo 2010 Shanghai

 6. Financial Program

Expo.com: The Application for Registration of Expo 2010 Shanghai has attracted extensive attention from all over the world, after its approval on December 1st, 2005 by the 138th representative members’ convention of the Bureau of International Exhibitions. The Application is the legal document on the complete implementation program of Expo 2010 Shanghai China, and also serves as the fundamental outline for the Expo preparation. Therefore, the whole preparation procedure of the Expo will be the active process on the basis of the Application. We here publish the abstracts of the Application for Registration on the official website of Expo 2010, in order to make it more convenient for all sorts of people home and abroad to understand the Application comprehensively. The followings are the “Application for Registration of Expo 2010 Shanghai (Abstract 6)- Financial Program”.

6.1 Overview

The total investment of Expo 2010 is in three main parts: resident relocation, major construction projects and operation investment.

The resident relocation investment will be organized by other financial instruments of Shanghai Municipal Government. Major construction projects investment is expected to reach RMB 18 billion, and operation expenditure will reach RMB 10.68 billion, which   will be provided by the government and supplemented by other financial channels.

To ensure the success of Expo 2010, the Chinese Government has pledged to provide financial support and will serve as the final guarantor for Expo 2010. The preferential policies of Shanghai Municipal Government regarding Expo-related taxation and customs clearance have been submitted for state approval that will be formally granted by relevant state authorities.

6.2 Composition of Expenditure on Major Construction Projects and Funding Sources 6.2.1 Expenditure Composition for Major Construction Projects

The expenditure on major construction projects is estimated to reach RMB 18 billion, including the expenditure of the infrastructures, the building up of the Theme Pavilions, China Pavilion, Pavilions for International Organizations, Corporate Pavilions, and major support facilities such as Community Center, Performance Center, Expo Village, and parking lots. The expenditure of providing other service facilities is also included, which is related to entertainment and recreation, food and beverage, shopping and administration. 6.2.2 Funding Sources

Among the major financing sources for Expo 2010, the Chinese Government will appropriate a fund of RMB 7.15 billion as the direct investment, accounting for a ratio of 40%, issuing Expo 2010 bonds worth RMB 8 billion approved by China Central Government, accounting for about 44% of the total investment. The rest RMB 2.85 billion will be financed by other means such as participants self investments, bank loans and project legal person investment.

6.3 Composition of Operation Expenditures

The estimated operation expenditures will reach RMB 10.68 billion, covering site maintenance (property management, water supply, electricity), major events (opening and closing ceremonies, national days and conferences), domestic and international communication and promotion, marketing, protocol cost for VIP, security, administration, insurance and other special items.

6.4 Composition of Operation Revenues

The operation revenues of Expo 2010 are estimated at RMB 9.61 billion, including ticket sales, sponsorship, concessionary operation, rentals for both commercial site leasing and pavilion leasing, royalty of the turnover derived from the commercial activities of the Participants within their pavilions.

The Organizer will do its best to keep a balance between revenues and expenditures, the total operation revenues will be minus RMB1,070 million.

6.5 Assistance

To honor the commitments of the Chinese Government in the bid, special Expo financial and technical assistance of USD 100 million will be provided to encourage the participation of more developing countries. The special assistance for qualified countries will mainly or partially cover:

(1) Consultancy expenditure for the composition of the Exhibition Project;

(2) Expenses for the design, decoration and dismantling of the pavilion;

(3) Maintenance expenditures of pavilion operation (such as cleaning, security, electricity, water supply and renting costs of equipments);

(4) Allowance for customs clearance, exhibit transport, storage, and insurance;

(5) Costs for participation in Expo-related events, like national days and other activities during the Exposition;

(6) Cost for promotion, communication and public relationship in China;

(7) Participation cost for VIP and his/her spouse to events during the Expo;

(8) Participation cost for journalists to events during the Expo;

(9) Costs for training to the Participant’s staff;

(10) Personnel expenditure for the preparation and participation of the Expo (including the costs for the local staff).

6.6 Government Support

The Chinese government will follow relevant articles in the Convention and its Customs Annex and deliver its promises made during the bidding stage in term of offering special treatment to the Organizer, the BIE, official participants and foreign staff in the payment of tariff, commercial and industrial taxes and other types of taxes payable by foreigners visiting or staying in China.

Specific measures and favorable policies of the Chinese government concerning Customs and Taxation will be further stipulated in Special Regulation No.7 and relative Participation Guidelines.