Guangdong Province and Chinese Manufacturer

Since China's "Opening and Reform" policy launched by Deng Xiaoping in 1979, businesses in Guangdong Province (??), literally "the Eastern Expanse", are at the forefront of foreign direct investments (FDI) in the People's Republic of China. Facing the South China Sea to the South, connected to the so-called Pearl River Delta, Guangdong is the country's richest province and contributes 12% to the Nation's GDP.

Guangdong is thus an environment very favourable to externalisation deals and therefore FDI. Outside of Guangzhou (formerly Canton), the provincial capital city, Guangdong comprises 3 Special Economic Zones (SEZ) and 7 major cities, the so-called "Tigers of the Pearl River Delta", i.e.:

Guangzhou (Provincial Capital City) (广州)

Ranked 3rd among the Chinese cities in terms of population and 2nd business city behind Shanghai, Guangdong’s « economic locomotive » and « China’s Southern Gate » is a major port and one of mainland China’s strongest commercial and manufacturing regions. Its various industrial fields of activity, strongly influenced by neighbouring Hong Kong, are some of the most dynamic economic poles. Twice a year, in April and October, Guangzhou hosts the “Canton Fair”, the world’s biggest Import and Export Fair.

• Geography: In the middle part of the Pearl River Delta, about 2 hours away by train from both the Special Administrative Regions (SARs) of Hong Kong and Macau
• Population: 11M
• Industries: Automobile, Information and Communication Technologies (ICT), Logistics, Pharmaceuticals, Tourism
• Port: 5th busiest seaport by cargo tonnage (2006)
• GDP: CNY 705B. Per Capita above USD 11000.

Shenzhen (SEZ) (??)

Declared a Special Economic Zone in 1984, « the window of China’s Economic Reform » and one-time fishing village has become a vibrant technological pole in less than 20 years. With a total export volume of 15%, Shenzhen, as southern China’s major financial and trade centre, is ranked 1st. It hosts China’s busiest container seaport behind Shanghai* and its population scores the highest income. Its current economic growth is estimated at 11.5%.

• Geography: Southwest of the Pearl River Delta, on the border with the Hong Kong SAR
• Population: 8.5M
• Industries: Electronics, Financial Services, ICT, Logistics, R&D
• GDP: CNY 676.5B. Per Capita above USD 11000.

*(Per TEU)

Zhuhai (SEZ) (??)

Elected a Special Economic Zone about the same year as Shenzhen, the border city of Zhuhai belongs to the very first Chinese cities to be developed to attract FDIs. This second window, located on a strategic position facing Macau, has become one the most innovating economic poles showing a steady yearly growth rate of over 10%. Its deep-water port is ranked 2nd behind Shenzhen*; Zhuhai has been hosting the China International Aviation & Aerospace Exhibition or Zhuhai Air Show every two years since 1996.

• Geography: Southwest of the Pearl River Delta, on the border with the Macau SAR
• Population: 1.4M
• Industries: Household Appliances, Petrochemicals, Tourism, Yachting
• GDP: CNY 88.7B.

*(per harbour entries)

Shantou (SEZ) (??)

A significant industrial centre since the 19th century, Shantou becomes the third original SEZ in 1984. This very new status allows Shantou to receive an influx of FDIs from Hongkong and Taiwan. As a Free Trade Zone and emerging city, Shantou’s main focus today is to concentrate on developing its light and heavy industry to attract further FDIs, while at the same time maintaining the status of its emblematic fishing industry.

• Geography: Far north-east of the Province, adjacent to Fujian, almost facing Taiwan
• Population: 4.97M
• Industries: Fishing, Food, Machinery, Petrochemicals, Plastics, R&D, Shoes, Textiles, Toys.
• GDP: CNY 85B.

Foshan (??)

The prefecture-level city of Foshan, which bears neither the title of SEZ nor coastal city, is Guangdong’s 3rd largest manufacturing base. Indeed, the latter revolves around specific Township and Village Enterprises (TVEs) forming the basis of a variety of pillar industries, such as the thousand-year old ceramic industry, which contributes 50% to the Nation’s total or the Household Appliance Industry which contributes itself to 20%. Other facts and figures speak for themselves: Part of the “Rich City List 2007”, 19% yearly growth, GDP over CNY 350M…

• Geography: West of Guangzhou and the Pearl River Delta
• Population: 3.4M
• Industries: Ceramics, Construction, Furniture, Household Appliances, ICT, Metallurgy, Plastics, Textiles, Tourism
• GDP: CNY 358.85B.

Dongguan (??)

Over the past 30 years, the prefecture-level city of Dongguan, considered as one of Guangdong’s very first industrialised and most progressive cities, has managed to maintain a steady and very fast growth averaging 15%. Dongguan mainly relies on manufacturing, a sector which has served as an engine to promote the city’s rapid expansion. Also, the city has always thrived in seeking FDIs and open up access to employment thanks to the establishment of industrial parks directed toward export.

• Geography: In the middle part of the Pearl River Delta, West of Guangzhou, about 1 hour away by train from both the Special Administrative Regions (SARs) of Hong Kong and Macau
• Population: 6.4M
• Industries: Cameras, Furniture, Shoes, Toys
• GDP: CNY 315.1B.

Zhongshan (??)

The originality of Zhongshan’s industrial landscape has been residing in its model of “sustainable economics” for more than 20 years. The city’s TVEs have seen along their axis of communication the development of various specialised manufacturing markets such as the Bulb Industry (60% of the Nation’s total), the Furniture Industry or Sport Clothing Industry. Since recently, Zhongshan has started considering other high added value industrial manufacturing, such as the ICT.

• Geography: South-South-West of the Pearl River Delta, north of Macau
• Population: 2.49M
• Industries: Electronics, Engineering, Fine Chemicals, Furniture, Healthcare (Test Fluids), Lighting, Machinery, Metallurgy (hydro-nickel batteries), Packing, Printing, Telecommunications, Textiles
• GDP: CNY 114.84B.

Huizhou (??)

Huizhou’s flagship petrochemical industry has made this prefecture-level city’s economy blossom exponentially since the 1980’s. The city plans to double the refining capacity within 2 years and earn an estimated CNY 100B. The digital industry, another key industrial sector, has made Huizhou the world’s largest hubs for the manufacturing of batteries. A striking example: the number of mobile phones exported in 2008 (15% of the Nation’s total) has jumped to 225% compared to one year earlier - the number of manufacturing sites itself has increased nearly 2-fold compared to 2007!

• Geography: East of the Pearl River Delta, East of Dongguan, North-East of Shenzhen
• Population: 3M
• Industries: Electronics, ICT, Petrochemicals
• GDP: CNY 108.5B (Estimates 2010: CNY 180B)

Jiangmen (??)

Although somewhat eclipsed by its neighbours, this immense “economic development area” possesses two major assets: a privileged geographical position (it covers ¼ of the surface of the Delta) and a rich and powerful network of overseas Chinese residents. Jiangmen is a typical example of a Chinese regional growth pole (cluster), a city symbolised by major representatives, such as the Made in China 2-wheel industry.

• Geography: South-West of the Pearl River Delta, South-West of Foshan
• Population: 3.96M
• Industries: Clothing, Food, Household Appliances, Electronics, Manufacturing, Office Technology, Textiles
• GDP: CNY 91.2B.

Zhanjiang (??)

Despite its far away location (about 400 km from Guangzhou), Zhanjiang is regarded as a key port* in South China, mainly for its imports of crude oil and exports of “made in China” products within the whole Asia Pacific Region, including neighbouring Vietnam. The average annual FDIs of about 22% from Singapore inflowing from such specific industrial sectors as finance, logistics and tourism are in constant progression. The Trade Fair dedicated to the Maritime and Coastal Economies is held in Zhanjiang once a year.

• Geography: South-West of the Province
• Population: 6.7M
• Industries: Household Appliances, Machinery, Offshore Crude Oil and Natural Gas Exploration, Papermaking, Petrochemicals, Shipyards
• GDP: CNY 77B.

*(In terms of container transport and as the Headquarters of the South Sea Fleet of the Chinese Navy)

Notes: Since China's joining the WTO in 2001, processes allowing you to establish your own company in China as a premier location for exports requires much less efforts. Nevertheless, issues related to Intellectual Property Rights and the shortage of qualified staff are still common. This is where the expertise of companies such as TTC can be of help in your business endeavours.

References: Chine Informations, Economist.com, French Consulate/Trade Delegation, Guangzhou Municipality, Swiss Consulate (Data 2006/2007/2008)