Shenzhen has introduced measures to boost exports and encourage overseas expansion. Among the policies unveiled at the weekend is a 20 per cent interest deduction on export loans provided by the state and the special economic zone. Companies with plans to set up factories and distribution networks in emerging countries will be given special loans. Newly-registered foreign enterprises with most of their products sold overseas will get a 50 per cent exemption of land-use fees and other incentives. Emerging countries refers to developing countries such as those in Africa where China's consumer products are popular due to their relatively high quality and low price. Qu Jian at the Shenzhen Comprehensive Development Research Institute said setting up operations in those markets could circumvent the export barriers for such products. The domestic market for products such as electronics was largely saturated, Mr Qu said. Shenzhen's economic growth relies heavily on its exports. The export reliance ratio - or export value over gross domestic product - for the first quarter this year is 185 per cent for Shenzhen, while the average is less than 30 per cent for the country. The ratio - an indicator of how export-oriented the economy was - was the highest among all leading cities in China, Mr Qu said. Its export value was US$37.4 billion last year while it set a goal of US$39.1 billion for this year. Shenzhen has allocated 400 million yuan (about HK$374.88 million) from its budget this year as a special fund to encourage exporting companies. The special economic zone came under pressure to boost exports as growth slumped last year due to the global economic slowdown and the September 11 attacks in the United States. As a result, exports grew only 3 per cent over the year. The concern was alleviated due to a better than expected foreign trade turnaround in the first quarter this year, which registered a 15.2 per cent increase in exports. Other incentives include giving priority and more space to export-oriented companies at Guangzhou trade fairs, and government organised trade shows overseas. Mr Qu said Shenzhen had to adopt more indirect incentives to help exporters after accession to the World Trade Organisation.