MARKET PROFILE - CHINA

OVERVIEW

Population (2018): 1.2 billion
GDP (2017): RMB 90 trillion
World Bank “Ease of Doing Business” Rank (2019): 46
Bilateral Trade with the World: $359 billion
Trading Partner Rank: 1
2018  ECONOMICS  STATISTICS
GDP Growth Year-on-Year
6.6%
GDP per Capita (RMB)
64,850
Trade (Billion RMB)
3,000 (+9.7%)
Actual FDI Flow (Billion USD)
142 (3.0%)

 


WHY CHINA

1.).  ASIA’S LARGEST ECONOMY & 2ND LARGEST ECONOMY IN THE WORLD

With a population approaching 1.4 billion and a booming upper middle class, China is Asia’s largest economy and the world’s second largest economy, bringing abundant opportunities for everyone. Singapore companies can capture these opportunities by having a unique value proposition and a clear market entry strategy in China’s highly competitive market.

1 https://www.businesstimes.com.sg/hub/business-china-special/spore-is-chinas-largest-investor

2.).  SUSTAINED ECONOMIC GROWTH PLANS AND LIBERALISATION
China is entering a phase of medium-high growth with significant business opportunities in consumerism, digital economy, infrastructure and innovation. The Chinese government set a 7% annual growth target in its 12th Five-Year Plan (2011 – 2015) and a 6.5% growth target in its 13th Five-Year Plan (2016 – 2020). These targets reflect China’s efforts to rebalance its economy, focus on the quality of growth and maintain the objective of achieving a “moderately prosperous society” by 2020 (doubling GDP for 2010 – 2020)2.

At the 2018 Boao Forum for Asia, Chinese President Xi Jinping highlighted China’s commitment to open up markets, grow regional economic integration and strengthen intellectual property protections3. He noted China as a defender of globalisation and multilateralism, citing the Belt and Road Initiative as a key project that embodies these values. President Xi also pledged to explore opening more free trade ports and continue with economic and trade liberalisation.

With greater economic liberalisation as a strategic development plan, China will adopt major reforms to broaden market access in the services sector and ease restrictions on the financial sector. President Xi’s promise to improve the country’s cooperation with foreign markets is also an opportunity for Singapore to continue strengthening its bilateral economic ties with China.

2 http://www.worldbank.org/en/country/china/overview
3 https://www.scmp.com/news/china/article/2140920/live-chinas-president-xi-jinping-reveals-economic-plans-boao-forum-amid

3.).   A GROWING LEADER IN SCIENCE AND TECHNOLOGY
Technology and innovation are key drivers of China’s economy. In 2017, China’s digital economy was worth RMB27.2 trillion (S$5.4 trillion) and accounted for 32.9% of its Gross Domestic Product (GDP)4.

The country’s expenditure on research and development totalled RMB1.75 trillion5 (S$347 billion) in the same year, and was responsible for the world’s second largest number of scientific research articles written6. In 2016, as part of its 13th Five-Year Plan, the State Council issued a national strategy that aims to build China into an innovative country and a scientific and technological power7.

These plans will focus on uplifting medium- and high-end industries, developing new growth drivers, expanding development spaces and improving development quality and efficiency. As part of these plans, China is looking to collaborate with international innovators to open the Chinese market up even more. Singapore companies should ride on these developments to collaborate with Chinese companies on innovative solutions.

4 http://www.chinadaily.com.cn/a/201809/27/WS5bac2ebea310eff30327fb53.html
5 http://english.cas.ac.cn/newsroom/china_research/201802/t20180214_190182.shtml
6 http://english.cas.ac.cn/newsroom/china_research/201801/t20180110_188902.shtml
7 http://english.gov.cn/policies/latest_releases/2016/08/08/content_281475412096102.htm

KEY OPPORTUNITIES

4.). BELT AND ROAD INITIATIVE

The Belt and Road Initiative (BRI) or 一带一路倡议 is a global development strategy proposed by China to build ties along the overland Silk Road Economic Belt and the naval trading route known as the 21st Century Maritime Silk Road. It was proposed by President Xi in 2013.

Through infrastructure development, it aims to promote the flow of people, goods, capital and ideas between Asia, Africa and Europe, connecting an estimated 4.4 billion people across more than 60 countries. From 2014 to 2017, China invested more than US$60 billion (S$82.6 billion) into countries along the Belt and Road.

Singapore was an early supporter of the Belt and Road Initiative. Today, one-third of all Chinese outward investments to Belt and Road countries flows through Singapore.

The realisation of the BRI requires physical infrastructure – roads, rail, ports and aviation – undergirded by a strong financing framework. As an international financial and business centre, Singapore-based companies are well-placed to support these infrastructure developments. Singapore companies can offer expertise in urban planning, mixed-use parks, and smart city systems. In addition, Singapore’s ecosystem of professional services offers expertise in fields such as infrastructure project financing, corporate structuring, financial and legal risk management, mediation and arbitration, to ensure that projects are sustainable, bankable, and beneficial for all parties.

CHINA-AFRICA TRADE

Liaoning is commonly viewed as the gateway to Northeast China, and is the only province in the region which has a coastal border. The Dalian Port is one of the top 20 ports globally by container turnover, while the airports in Shenyang and Dalian are among the busiest international airports in the region. Located close to Korea and Japan, Liaoning is a key node in the Sino-Mongolia-Russia Economic Corridor. Given this geographical location, gateway cities such as Dalian and Shenyang have the potential to become regional connectivity hubs and business centres in Northeast China, at the same time connecting Japan and Korea.

While traditionally focused on heavy industries, Liaoning has shifted its emphasis in recent years to its services sector. However, the province is still in its nascent stages of its economic transformation. This means that there is less competition in its cities compared to first-tier cities such as Shanghai and Beijing. This makes Liaoning an ideal location for SMEs looking to venture to China.

PSA’s first overseas project was in Dalian where it formed a joint venture with Dalian Port Authority to develop the Dalian Container Port. Ascendas-Singbridge has a joint venture with Dalian Software Park to form Dalian Ascendas IT Park. The project consists of office buildings and a central hub with extensive lifestyle amenities, convenience stores and convention facilities. Other Singapore companies in Liaoning include Armstrong’s manufacturing plant and CapitaLand Township in Shenyang, Etonhouse’s International school in Dalian and Q&M’s dental centres.

KEY STATISTICS (2018)LiaoningShenyangDalian     
AREA (SQ KM)148,000 12,92413,237     
 PERMANENT POPULATION (MILLION)43.59 8.326.9     
 POPULATION DENSITY (PER SQ KM)294  643521  
 GDP (RMB BILLION)2,531.5629.2 766.85  
 GDP GROWTH YEAR-ON-YEAR+5.7+5.4  +6.5%  
 GDP PER CAPITA (RMB)50,00875,766109,738  
 TRADE (RMB BILLION)754.59 98.437.05  
ACTUAL FDI FLOW (USD BILLION)4.911.43  2.68    
Sources: Liaoning Bureau of Statistics, Shenyang Bureau of Statistics, Dalian Bureau of Statistics
 
 
 
 
SHANDONG
 

Shandong is the second most populous province in China. It has 17 prefecture-level cities and 139 counties. In 2018, Shandong had the third largest GDP amongst provinces in China, after Guangdong and Jiangsu. Shandong is also one of the largest consumer markets in China.

While Jinan is the provincial capital, Qingdao, the coastal city, remains the province’s leading industrial centre. Together with Dalian, Ningbo, Xiamen and Shenzhen, Qingdao belongs to a special category of sub-provincial level cities (计划单列市), where a proportion of the city’s fiscal revenue is submitted directly to the Central Government, instead of the provincial government.

The key demand drivers are rapid urbanisation and industrialisation. We see urban solutions, infrastructure (BRI) and tertiary services as key sectors for Singapore companies. Apart from Qingdao, we also see growth opportunities in Jinan and Yantai.

KEY STATISTICS (2018)ShangdongJinanQingdaoYintai    
AREA (SQ KM)158,0008,117 11,292 13,746    
 PERMANENT POPULATION (MILLION)100.47 7.54  9.4 7.12    
 POPULATION DENSITY (PER SQ KM)635 912832517 
 GDP (RMB BILLION)7,647.0 785.7  1,200.2 783.3 
 GDP GROWTH YEAR-ON-YEAR+6.4%+7.4%  +7.4%+6.4% 
 GDP PER CAPITA (RMB)76,267106,302128,459  110,231 
 TRADE (RMB BILLION)1,930.25 82.50532.13 305.37 
ACTUAL FDI FLOW (USD BILLION)12.39 17.82  5.82.62 

Sources: Shandong Bureau of Statistics, Jinan Bureau of Statistics, Qingdao Bureau of Statistics, Yantai Bureau of Statistics.

The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) project is a national strategy by the Chinese government to link nine cities in the Guangdong Pearl River Delta Economic Zone (PRD) with Hong Kong and Macao. The GBA aims to be a/an:

  1. vibrant world-class city cluster, which will lead China’s efforts in deepening reforms and opening up;
  2. International Technology Innovation Centre, which aims to be at the forefront of global technology advancement;
  3. strong pillar in supporting China’s Belt & Road Initiative (BRI);
  4. demonstrative zone for deepening cooperation between Mainland China and the Special Administrative Regions (SARs); and; region for quality living.

Innovation will form the foundation of GBA’s economy and development model. To develop the GBA into an International Technology Innovation Centre, there are plans to build a Guangzhou-Shenzhen-Hong Kong-Macao Technology Innovation Corridor, which will explore policy initiatives on cross border movement of talents, capital, information and technologies.

Hong Kong, Macao, Guangzhou and Shenzhen have been designated the core cities of the GBA. Specifically, Hong Kong will be the international finance, navigation and trade centre, as well as a transport hub for the GBA; Macao will be an international tourism city and a platform for enhanced trade and investments with Portuguese-speaking countries; Guangzhou will take on a leading role as the regional administrative centre; while Shenzhen will spearhead innovation development and leverage its unique status as a Special Economic Zone to experiment with new reforms.

Of the remaining PRD cities, Zhuhai, Foshan, Zhongshan and Dongguan are in the second tier, identified to develop strengths in high-tech sectors such as advanced manufacturing, as these four cities bordering the first tier cities have traditional strengths in the manufacturing industries. In addition, Guangzhou and Foshan; Macao and Zhuhai; and Hong Kong and Shenzhen, have been paired as regional sub-clusters to accelerate integration and development of the GBA.

 

 

 

GUANGDONG PROVINCE

KEY STATISTICS (2018)GuangdongGuangzhouShenzhenFoshanDonguanZhuhai Zhongshan
AREA (SQ KM) 179,8007,434.41.991.6 3,848.5 2,4651,701.0  1, 784.0
 PERMANENT POPULATION (MILLION) 113.5 14.9 13.0 7.9 8.4 1.8  3.3
 POPULATION DENSITY (PER SQ KM)  631.32,004.2 6,527.42,063.0 3,408.01,058.0 1,850.0
 GDP (RMB BILLION)  9,727.8 2,285.9 2,422.2 993.6827.9 296.6  363.3
 GDP GROWTH YEAR-ON-YEAR +6.8%+6.2%+7.6%+6.3%+7.4% +8.0% +5.9%
 GDP PER CAPITA (RMB) 47,529141,103162,388160,706 105,903165,100  110,091
 TRADE (RMB BILLION) 85,707  15,346186,323125,772 98,560  324.6  234.2
ACTUAL FDI FLOW (USD BILLION) 145.1 6.6 8.21.6  1.2  2.4    0.5

Source: Guangdong Statistical Bureau

 

 

 

 

HONG KONG AND MACAO

KEY STATISTICS (2018)Hong KongMacao      
AREA (SQ KM)1,106.6632.9      
 PERMANENT POPULATION (MILLION) 1,482.5 0.667      
 POPULATION DENSITY (PER SQ KM)  6,761.3 20,285.7
 GDP (RMB BILLION) 364.8 54.49
 GDP GROWTH YEAR-ON-YEAR 3.0% 4.7%
 GDP PER CAPITA (RMB)48,958 82.536
 TRADE (RMB BILLION)1,138.4 12.66
ACTUAL FDI FLOW (USD BILLION)110.7328.1

Source: Census and Statistics Department, HKSAR and Yearbook of Statistics of Macao 2018

 

FUJIAN PROVINCE

Fujian’s economic hub is made up of the four cities of Fuzhou (provincial capital), Xiamen, Quanzhou, and Zhangzhou. Collectively, they account for nearly 70% of the province’s GDP. Fujian enjoyed relatively strong economic growth in the last five years, and was China’s 10th largest provincial economy in 2018.

To drive further economic growth, Fujian aims to promote industrial restructuring and upgrading through adopting innovation and entrepreneurship, promoting the clustering of high-end industries, and developing modern services. Emphasis will also be placed on the integration of urban and rural development to develop Fujian as a sustainable and liveable place through environmental protection and digitisation of information. Fujian will also leverage the Belt & Road Initiative (BRI) to strengthen its cooperation with Guangdong, Zhejiang and other neighbouring provinces, as well as external markets such as Taiwan. This is to strengthen its positioning in the 21st Century Maritime Silk Road.

Fujian’s Free Trade Zone (FTZ), established in 2015, will see a concentration of some of these developments. The Fujian FTZ comprises the following areas, each with its own focus areas:

  • Pingtan (43 sq km) – International Tourism Island and pilot zone for cross-straits interaction
  • Xiamen (43.78 sq km) – emerging industries and modern services, international transportation and financial trading hub
  • Fuzhou (31.26 sq km) – advanced manufacturing, international cooperation platform for the 21st Century Maritime Silk Road and pilot zone for cross-strait financial and services innovation.
  • KEY STATISTICS (2018)FujianFuzhouXiamen Quanzhou    
    AREA (SQ KM)124,000 13,0661,865  11,000    
     PERMANENT POPULATION (MILLION)39.4  7.744.11  8.65    
     POPULATION DENSITY (PER SQ KM)311.7  592.42,283.7 768.4 
     GDP (RMB BILLION)158,000 3580.4479.1 845.8 
     GDP GROWTH YEAR-ON-YEAR+8.2%+ 8.5% +7.7% +8.9% 
     GDP PER CAPITA (RMB)91,805100,129116.569 97,780 
     TRADE (RMB BILLION)1234.5 251.5600.2 185.4 
    ACTUAL FDI FLOW (USD BILLION) 4.630.81  1.63   0.63
  • Source: Fujian Statistical Bureau

     

     

     

    HAINAN PROVINCE

Hainan, a tropical island off China’s south coast, was designated as a province and Special Economic Zone (SEZ) in 1988. Today, the services industry is the most significant contributor to Hainan’s GDP, accounting for more than half of the economy’s output. Agriculture and tourism are its key sectors.

Hainan is set to transform into an island-wide pilot FTZ and subsequently, a Free Trade Port (FTP). As China’s first and only FTP, Hainan will be a pilot zone for further opening up, with reforms relating to the free movement of goods, capital and people expected. Its services sectors, in particular, are set to receive a boost from the reforms.

KEY STATISTICS (2018)HainanHaikouSanya     
AREA (SQ KM)34,400 3,1191,921     
 PERMANENT POPULATION (MILLION)9.34 2.30.615     
 POPULATION DENSITY (PER SQ KM)263.8  737.4320.1  
 GDP (RMB BILLION)483.21 151.11 59.6  
 GDP GROWTH YEAR-ON-YEAR 5.5%7.6%  7.2%  
 GDP PER CAPITA (RMB)51,95566,04230,487  
 TRADE (RMB BILLION)12.83 34.120.29  
ACTUAL FDI FLOW (USD BILLION)0.7330.25   0.78 

Source: Hainan Government Official Website

 

SICHUAN Sichuan is West China’s largest economy, and home to over 80 million residents. The province serves as a transportation and commercial hub for much of China’s western region. Apart from the capital city Chengdu, up-and-coming cities such as Mianyang, Deyang and Luzhou also present many untapped opportunities. Its comparatively low labour and land costs, as well as enhanced connectivity, have attracted investors seeking cheaper production bases in inland China. In 2018, Sichuan’s GDP grew 8%, higher than China’s national average of 6.6%. Sichuan’s foreign trade and actual foreign direct investment (FDI) continued to grow in 2018 after rebounding from a two-year decline to reach USD $88.5 billion and USD 11.22 billion respectively. Sichuan is developing its advanced manufacturing capabilities in areas such as aviation, electric vehicles, biomedicine, medical equipment, oil & gas drilling, digitally controlled machine tools and robots and new materials. Sichuan is also growing its services industry, particularly in the fields of finance, logistics, e-commerce, eldercare, healthcare outsourcing and science & technology.
KEY STATISTICS (2018)
Sichuan
AREA (SQ KM)
485,000
PERMANENT POPULATION (MILLION)
83.41
 POPULATION DENSITY (PER SQ KM)
172
 GDP (RMB BILLION)
4067.8
 GDP GROWTH YEAR-ON-YEAR
+8.0%
 GDP PER CAPITA (RMB)
48,768
 TRADE (RMB BILLION)
88.5
 ACTUAL FDI FLOW (USD BILLION)
11.2
Source(s): Sichuan Statistics Bureau and Sichuan Department of Commerce SHAANXI Shaanxi is the largest economy in northwest China, and also serves as the gateway to Central Asian and European countries under the Belt & Road Initiative (BRI). As Shaanxi continues on its stellar growth trajectory (its GDP grew by 8.3% in 2018), the provincial administration is employing a “Three Economies” strategy to help chart its next stage of development. Significant efforts to grow Shaanxi’s hub, gateway and mobile economies are already underway, with the province attracting USD 6.8 billion in FDI in 2018. Xi’an, the capital city of Shaanxi, is the province’s most developed and vibrant city. It accounts for over one-third of Shaanxi’s GDP and over 90% of its FDI. In 2018, Xi’an’s GDP grew by 8.2%, with its disposable income per capita hitting RMB 38,729. The city’s key sectors include consumerism, the digital economy, technology & innovation and urban solutions and the built environment. Xi’an’s rapid growth has fuelled consumer demand for products and services. Its new household policy attracted over one million young and well-educated residents in the short space of 18 months. This in turn has boosted demand for food, education and healthcare services; demand that Singapore companies such as Bee Cheng Hiang, Breadtalk, Crestar and Global Doctor are meeting. With comparatively lower overheads and a huge pool of talent, Xi’an is an attractive destination city for both startups and established high-tech enterprises. The capital city is home to over 1.2 million college students and 3,000 research & development institutions, ensuring firms have an abundance of talent and partners to work with. This strong ecosystem has persuaded global firms such as Micron and Samsung to set up semiconductor manufacturing facilities in the city. For Singapore firms contemplating venturing to Shaanxi, Ascendas-Singbridge’s Innovation Towers serves as a suitable launchpad for high-tech and software development companies. Xi’an is one of China’s most attractive tourist destinations, and this has bolstered demand for infrastructure development and tourism-related projects. Singapore companies such as CapitaLand, Banyan Tree, Surbana Jurong, Mapletree Logistics and Ascott are present in Xi’an, while Straco has been operating a cable car service at Lishan since the 1990s. More recently, the latter is investing in a new project to redevelop relic sites in Lishan.
KEY STATISTICS (2018) Shaanxi
AREA (SQ KM) 205,800
PERMANENT POPULATION (MILLION) 38.64
 POPULATION DENSITY (PER SQ KM) 185
 GDP (RMB BILLION) 2443.83
 GDP GROWTH YEAR-ON-YEAR +8.3%
 GDP PER CAPITA (RMB) 63,477
 TRADE (RMB BILLION) 53.1
 ACTUAL FDI FLOW (USD BILLION) 6.8
Source(s): Shaanxi Statistics Bureau and Shaanxi Department of Commerce     CHONGQING Chongqing is the only inland municipality in China and the operating HQ of Singapore’s and China’s third government-to-government project named the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity (CCI). It is the only major inland province in Western China that is connected by four modes of transportation – river, air, rail and land. In 2018, the municipality’s GDP grew by 6% to reach RMB 2.05 trillion. Chongqing is currently developing its advanced manufacturing capabilities in fields such as aviation, electric vehicles, biomedicine, medical equipment and new materials. In the services sector, finance, logistics, e-commerce, eldercare and healthcare have emerged as key growth areas.
KEY STATISTICS (2018) Chongqing
AREA (SQ KM) 82,400
PERMANENT POPULATION (MILLION) 30.7
 POPULATION DENSITY (PER SQ KM) 373.2
 GDP (RMB BILLION) 2,050.0
 GDP GROWTH YEAR-ON-YEAR +6.0%
 GDP PER CAPITA (RMB) 20,363
 TRADE (RMB BILLION) 75.6
 ACTUAL FDI FLOW (USD BILLION) 3.2

Hubei’s provincial capital city, Wuhan, is a modern metropolis and part of the cluster of mega cities situated along the middle reaches of the Yangtze River.

Wuhan is amongst China’s New First Tier cities (新一线城市), and is expected to continue spearheading the development of Central China. It has a land area of 8,494 sq km and comprises three major townships – Wuchang, Hankou and Hanyang – making it one of the largest provincial capitals in China.

Wuhan has historically been a city of strategic and economic importance, especially in contemporary Chinese history. It was home to China’s first iron and steel factory back in the Qing dynasty. Today, Wuhan Iron and Steel Corp (WISCO)2 is one of the top iron and steel producers of the world.

Wuhan is also widely recognised as the birthplace of the 1911 Revolution, a milestone event that transformed the country into modern China as we know it today.

The city is also known as a key railway, logistics and transportation hub. With a strong industrial base and port facilities that stretch back to the 1900s, Wuhan is an important inland transshipment port along the middle stretches of the Yangtze River.

Its unique position at the crossroads of China’s railways, highways and waterway makes it the centrepiece of the central government’s “Rise of Central China Strategy”.

Beyond its geographical advantages, Wuhan is also brimming with human capital. The city is home to over a million tertiary students. It is this large talent pool that will provide the foundation for Wuhan’s next stage of development.

The city has identified priority sectors of focus – modern services, high-tech industries such as precision engineering, advanced manufacturing, optoelectronics3, biomedical, new energy and green solutions.

The Optics Valley of China (“中国光谷”) is testament to Wuhan’s ambitions, with the high-tech zone housing numerous advanced manufacturing facilities, including those dedicated to the research & development (R&D) and production of optical fibre cables and other optoelectronic components.

With Wuhan gearing up to be Central China’s R&D hub, Singapore companies are exploring opportunities in areas such as research collaboration and intellectual property creation. McKinsey predicts Wuhan’s GDP to rank 11th globally by 20254.

KEY STATISTICS (2018) Hubei Wuhan
AREA (SQ KM)  185,900  8,494
 PERMANENT POPULATION (MILLION)  59.0  10.9
 POPULATION DENSITY (PER SQ KM) 749  1,283
 GDP (RMB BILLION)  3,936.7  1,484.7
 GDP GROWTH YEAR-ON-YEAR +7.8%  +12.69
 GDP PER CAPITA (RMB)  66,724  136,211
 TRADE (RMB BILLION) 65.2   28.60
ACTUAL FDI FLOW (USD BILLION)  11.0  9.6
 
1 The 6 provinces included in the Rise of Central China strategy includes Hubei, Hunan, Jiangxi, Henan, Anhui and Shanxi.
2 WISCO has been merged with Baoshan Iron and Steel Group (Baosteel) in September 2016 to form BaoWu Iron and Steel Group (Baowu). Baowu is currently the biggest steel maker in China.
3 Optoelectronics is the study and application of electronic devices that source, detect and control light, including LEDs, integrated optical circuits and solar cells.
4 Global cities of the future, Mckinsey (2012)
5 Hubei Bureau of Statistics
6 HKTDC

The Yangtze River Delta (YRD) region  accounts for 3.7% of China’s land area with a population of 220 million and a GDP of RMB 19.5 trillion (approximately a quarter of China’s GDP). 

To better promote regional cooperation and integration, the Yangtze River Delta Regional Cooperation Office was launched in January 2018. 

The three provinces and Shanghai will ramp up coordination in terms of industrial planning and leverage each area’s strengths to work towards the creation of a unified market. 

Plans are underway to enhance infrastructural connectivity within the region to facilitate intermodal transport and trade. 

With integration of the region deemed a national-level strategy by the government, the area is well on course to become the “Pearl of the Asia-Pacific”.

 

SHANGHAI

Shanghai is one of only four municipalities in the country, and is widely regarded as China’s economic centre. It is China’s largest city in terms of GDP, with 2018 figures hitting RMB 3.2 trillion. In 2017, it became the first city to cross the much-vaunted RMB 3 trillion mark. 

Within Shanghai, the Pudong New Area – China’s first national-level New Area – accounts for a third of the city’s business activities by value.

Shanghai is also home to the largest number of MNC regional headquarters in China, and a population that has the strongest spending power among all the Chinese cities.

Notably, Shanghai was selected to host the inaugural China International Import Expo (CIIE) from 5 – 10 November 2018, and will be hosting the second CIIE in November 2019.

Shanghai was Singapore’s second largest investment destination in China in 2018, while Singapore was Shanghai’s third largest foreign investor after Hong Kong and Germany1.

Growing demand for mid to high-end goods and services makes Shanghai a very attractive investment destination for foreign firms, many of which focus on real estate, financial and insurance services, manufacturing, retail and wholesale trade.

1 Shanghai Bureau of Statistics

KEY
STATISTICS
(2018)
Shanghai
AREA
(SQ KM)
6,340
PERMANENT
POPULATION
(MILLION)
24.18
POPULATION
DENSITY
(PER SQ KM)
 3,814
GDP
(RMB BILLION)
3,267.99
GDP GROWTH
YEAR-ON-YEAR
6.6%
GDP PER
CAPITA
(RMB)
135,000
TRADE
(RMB BILLION)
506.53
ACTUAL
FDI FLOW (USD BILLION)
17.3
Source: Shanghai Bureau of Statistics
 
 
 
JIANGSU    PROVINCE
  
The province has traditionally been an export-oriented economy with strong manufacturing capabilities; electronics, telecommunications, textiles, petrochemicals, metallurgy and machinery account for over 80% of Jiangsu’s GDP.
 
Since 2015, Jiangsu has been diversifying into the services sector in areas such as communications, e-commerce, logistics, financial leasing and smart manufacturing, and is also accelerating its plans to focus on technology and innovation to drive its economy.
  
KEY
STATISTICS
(2018)
Jiang
su
Nan
jing
Su
zhou
Wu
xi
Nan
tong
     
AREA
(SQ KM)
 102,600
 6,596
 8,488
 4,628
  8,544
     
PERMANENT
POPULATION 
(MILLION)
80.29
 8.33
 10.68
 6.55
 7.31
     
POPULATION
DENSITY 
(PER SQ KM)
749
1,265
 1,234
 1,416
 692
 GDP
(RMB BILLION)
  23,532
 1,771.5
 1,731.9
 1,051.9
773.4
 GDP GROWTH
YEAR-ON-YEAR
7.2%
8.1%
 7.1%
 7.4%
7.8%
GDP PER
CAPITA (RMB)
47,529
141,103
162,388
 160,706
 105,903
TRADE
(RMB BILLION)
5911.39
  611.89
3,160.79
 812.53
 348.20
ACTUAL
FDI FLOW 
(USD BILLION)
 55.4
 1.87
 9.27
1.20
 1.36
 
 
 
 
 
 
 Source: Jiangsu Bureau of Statistics
 
 
 
ZHEJIANG       PROVINCE

Located on China’s eastern seaboard, Zhejiang is one of China’s most affluent provinces and is widely known as the cradle of  China’s e-commerce revolution. Home to global e-commerce behemoth Alibaba, Zhejiang houses the China (Hangzhou) Cross-Border E-Commerce Pilot Zone, the nation’s first comprehensive pilot zone for cross-border e-commerce.

Officials in the pilot zone will helm innovative policies to supervise e-commerce transactions, customs clearances and tax refunds. With a robust ecosystem of suppliers, distributors, technology, capital and end-users, Zhejiang’s capital of Hangzhou is an attractive destination for Singapore technology firms.

Beyond e-commerce, Zhejiang also presents numerous opportunities in other areas. The Zhejiang (Zhoushan) Free Trade Zone will spur commodity trade liberalisation, while facilities such as the Ascendas Singapore – Hangzhou Science & Technology Park (SHSTP) provide attractive landing pads for firms looking to develop new technologies. The province is also a magnet for consumer firms as it has a relatively high GDP per capita. 

KEY
STATISTICS
(2018)

Zhejiang Hangzhou Jiaxing Ningbo        
AREA
(SQ KM)
101,800  16,596  9,223   9,816        
PERMANENT
POPULATION
(MILLION)
49.58  7.54 3.58 5.97        
POPULATION
DENSITY
(PER SQ KM)
560  590  1,100  780  
GDP
(RMB BILLION)
5,176.8  1260.3   438.1  984.2  
GDP
GROWTH
YEAR-ON-YEAR
7.8% 11.4%   13.4% 13.3%  
GDP PER
CAPITA (RMB)
92,057 135,113 941.510   123,955  
TRADE
(RMB BILLION)
3779.00  690.13 354.58  1121.97  
ACTUAL
FDI FLOW
(USD BILLION)
17.9  6.61   2.99 4.03
Source: Zhejiang Bureau of Statistics

The Jing-Jin-Ji region, also known as Beijing-Tianjin-Hebei, is the national capital region of China. In 2018, the Jing-Jin-Ji region accounted for approximately 9% of China’s total GDP.

The region is also a significant growth cluster for the electronics, tech, logistics, real estate, and healthcare sectors. The central government aims to spur the development and integration of the region by leveraging each area’s unique strengths:

(a) Beijing’s modern services industry, (b) Tianjin’s logistics, connectivity and advanced manufacturing industries and (c) Hebei’s natural resources and heavy industries.

KEY
STATISTICS
(2018)
BeijingTianjinHebei     
AREA
(SQ KM)
16,411 11,917151,693     
PERMANENT
POPULATION
(MILLION)
21.54 15.6075.58     
POPULATION
DENSITY (PER SQ KM)
1,313  1,309 402  
 GDP
(RMB BILLION)
1,881.0 1,881.0  3,601.0  
 GDP GROWTH
YEAR-ON-YEAR
+6.6+3.6  +6.6%  
GDP PER
CAPITA (RMB)
140,00039,50647,772  
 TRADE
(RMB BILLION)
2,718.25 807.70355.16  
ACTUAL FDI
FLOW (USD BILLION)
17.314.85  9.7  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Reported as disposable income per capita (RMB)

Sources: Beijing Bureau of Statistics, Tianjin Bureau of Statistics, Hebei Bureau of Statistics

 

 

BEIJING

Beijing, the national capital, is a key political, cultural and financial centre of China. In 2018, Beijing’s GDP grew 6.6% year-on-year to reach RMB 3.0 trillion. It is driven mainly by its services sector, which accounted for about 80% of its GDP. 

The economic powerhouse presents opportunities in consumerism, technology and e-commerce sectors. At E’Or SOLUTIONS, Inc.™ (ESi), we work closely with China’s National Development and Reform Commission (NDRC) to identify sectors and opportunities for the Belt & Road Initiative (BRI).

 

 

HEBEI

Bordering both municipalities is Hebei province, a region fast gaining attention from investors. The province boasted a GDP of RMB 3.6 trillion in 2018, a 6.6% growth year-on-year. While it has traditionally played a supporting role to Beijing and Tianjin due to its emphasis on natural resources and heavy industries, the Beijing government has recently began directing advanced industries to the province. 

The establishment of Xiong’an New Area – a state-level economic zone – has also boosted the province’s profile. Cities in Hebei such as Shijiazhuang, Langfang and Baoding are set to benefit from the development of the Xiong’an New Area, with opportunities for investors in sectors ranging from real estate to finance set to grow.

 

TIANJIN

Tianjin is home to the second Singapore-China government-to-government platform project – Tianjin Eco-City. The municipality houses one of China’s top ten ports, and posted a GDP of over RMB 1.8 trillion in 2018. Its pillar industries include manufacturing, electronics, and petrochemicals. 

Tianjin is often designated as a pilot area for financial innovation as well as policy experiments, making it a region to watch for businesses.

Liaoning is commonly viewed as the gateway to Northeast China, and is the only province in the region which has a coastal border. The Dalian Port is one of the top 20 ports globally by container turnover, while the airports in Shenyang and Dalian are among the busiest international airports in the region.

Located close to Korea and Japan, Liaoning is a key node in the Sino-Mongolia-Russia Economic Corridor. Given this geographical location, gateway cities such as Dalian and Shenyang have the potential to become regional connectivity hubs and business centres in Northeast China, at the same time connecting Japan and Korea.

While traditionally focused on heavy industries, Liaoning has shifted its emphasis in recent years to its services sector. However, the province is still in its nascent stages of its economic transformation.

This means that there is less competition in its cities compared to first-tier cities such as Shanghai and Beijing. This makes Liaoning an ideal location for SMEs looking to venture to China.

PSA’s first overseas project was in Dalian where it formed a joint venture with Dalian Port Authority to develop the Dalian Container Port. Ascendas-Singbridge has a joint venture with Dalian Software Park to form Dalian Ascendas IT Park.

The project consists of office buildings and a central hub with extensive lifestyle amenities, convenience stores and convention facilities. Other Singapore companies in Liaoning include Armstrong’s manufacturing plant and CapitaLand Township in Shenyang, Etonhouse’s International school in Dalian and Q&M’s dental centres.

KEY
STATISTICS
(2018)
LiaoningShenyangDalian     
AREA
(SQ KM)
148,000 12,92413,237     
 PERMANENT
POPULATION
(MILLION)
43.59 8.326.9     
 POPULATION
DENSITY
(PER SQ KM)
294  643521  
 GDP
(RMB BILLION)
2,531.5629.2 766.85  
 GDP
GROWTH
YEAR-ON-YEAR
+5.7+5.4  +6.5%  
 GDP PER
CAPITA (RMB)
50,00875,766109,738  
 TRADE
(RMB BILLION)
754.59 98.437.05  
ACTUAL FDI
FLOW (USD BILLION)
4.911.43  2.68    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sources: Liaoning Bureau of Statistics, Shenyang Bureau of Statistics, Dalian Bureau of Statistics
 
 
 
 
 
 

 

 

SHANDONG
 
 

Shandong is the second most populous province in China. It has 17 prefecture-level cities and 139 counties. In 2018, Shandong had the third largest GDP amongst provinces in China, after Guangdong and Jiangsu. Shandong is also one of the largest consumer markets in China.

While Jinan is the provincial capital, Qingdao, the coastal city, remains the province’s leading industrial centre. Together with Dalian, Ningbo, Xiamen and Shenzhen, Qingdao belongs to a special category of sub-provincial level cities (计划单列市), where a proportion of the city’s fiscal revenue is submitted directly to the Central Government, instead of the provincial government.

The key demand drivers are rapid urbanisation and industrialisation. We see urban solutions, infrastructure (BRI) and tertiary services as key sectors for Singapore companies. Apart from Qingdao, we also see growth opportunities in Jinan and Yantai.

KEY
STATISTICS
(2018)
ShangdongJinanQingdaoYintai    
AREA
(SQ KM)
158,0008,117 11,292 13,746    
 PERMANENT
POPULATION
(MILLION)
100.47 7.54  9.4 7.12    
 POPULATION
DENSITY
(PER SQ KM)
635 912832517 
 GDP
(RMB BILLION)
7,647.0 785.7  1,200.2 783.3 
 GDP GROWTH
YEAR-ON-YEAR
+6.4%+7.4%  +7.4%+6.4% 
 GDP PER
CAPITA (RMB)
76,267106,302128,459  110,231 
 TRADE
(RMB BILLION)
1,930.25 82.50532.13 305.37 
ACTUAL FDI
FLOW (USD BILLION)
12.39 17.82  5.82.62 
 
 
 
 
 
 
 
Source: Shandong Bureau of Statistics, Jinan Bureau of Statistics, Yantai Bureau of Statistics
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