Island city of Sansha in South China Sea claims big feat

Deputy mayor says Sansha has attracted 16 of the world's top firms

Posters adorn lamp posts in Tanmen fishing village, urging locals to "love Sansha city, embrace China's blue-water territory".
Posters adorn lamp posts in Tanmen fishing village, urging locals to "love Sansha city, embrace China's blue-water territory". PHOTO: ST FILE

An island city that China established in 2012 to govern disputed island chains in the South China Sea has drawn 16 of the world's 500 largest companies, Chinese media said, citing the city's deputy mayor.

The pronouncement comes as China moves to entrench its presence in the vital waterway, such as reclaiming islands in archipelagoes also claimed by other governments and running holiday cruises to these island chains.

Mr Feng Wenhai, deputy mayor of Sansha city, said the 16 firms have registered themselves in the city amid its drive to position itself as an offshore registration jurisdiction, reported China News Service and Xinhua news agency. The reports did not name the companies.

A total of 157 firms with a combined capital of over three billion yuan (S$623 million) have registered on Sansha and paid over 1.53 billion yuan in taxes, Mr Feng was quoted as saying at a meeting of the local people's congress on Tuesday.

The companies operate in a range of sectors, including agriculture, tourism, aviation, transport and culture, the reports said.

Major Chinese banks, such as the Industrial and Commercial Bank of China and the Bank of China, have also opened branches on the island, the reports said.

Sansha city was established in 2012 on the 2.1 sq km Woody Island in the Paracels. Through Sansha, China administers the Xisha (Paracels), Zhongsha (Macclesfield Bank and Scarborough Shoal) and Nansha (Spratly) island chains, parts of which are occupied or claimed by Vietnam, the Philippines, Taiwan, Malaysia and Brunei.

China lays claim to almost all of the South China Sea and rejects the findings of an international tribunal in July that invalidated those claims. Since 2012, China has built roads, a hospital, a school, water treatment plants and other facilities on the islands.

It has also built two airfields - on Woody Island and Yongshu or Fiery Cross Reef - as well as a network of artificial islands capable of supporting military operations. US officials say the Woody airfield hosts surface-to-air missiles.

China has also promoted tourism and fishing in the resource- rich waters it controls. Up to eight ships will offer cruises to the South China Sea over the next five years, state media has reported. Civilian flights are also being planned.

This week, Sansha said it plans to offer subsidies to fishermen who live in the Paracels for up to 180 days in a year. Mr Feng said Sansha aims to woo more companies in the next five years through favourable fiscal and tax policies and simplified registration.

A version of this article appeared in the print edition of The Straits Times on November 25, 2016, with the headline 'Island city in South China Sea claims big feat'. Subscribe