Spotlight on investment opportunities: Zhejiang Province’s seven strong points
Zhejiang Province is one of China’s economic powerhouses. Its cities Jiaxing, Taizhou and Shaoxing may not be known to most international entrepreneurs, but with the better-known Wenzhou, Ningbo and Hangzhou, they are the epicentre of one of China’s most active business and industry regions. What seven reasons make this province a favourable location to invest in?
Consultancy firm Dezan Shira in China made an assessment of the region’s strong characteristics and came to the conclusion that it is not surprising that many international enterprises chose this region in the past ten years to set up their China bridgehead in this region. “The logistics strength, location, and presence of economic development zones, free trade zones, and export processing zones makes Zhejiang an ideal location for foreign companies”, the firm points out in a recent regional assessment.
Zhejiang’s seven strong points are:
- Advantageously located, logistics strength, advanced infrastructure
The province is located on China’s east coast, south of Shanghai. It is easily accessible via the Hangzhou Bay Bridge, the world’s fourth longest transoceanic bridge. Both international and domestic transport links are strong here. In addition, Zhejiang has nine airports, three of which are international airports, as well as an international rail freight system. Zhejiang boasts of advanced infrastructure, with 2,600 kilometres of railway, almost 120,000 kilometres of highways, and one of the top five busiest ports in the world.
- Economic development zones
Much of the economic activity related to international enterprises is located in the local development zones. There are different types of development zones in Zhejiang, including free trade zones, bonded zones, and technical development zones. There are 21 national-level and 54 provincial-level development zones in Zhejiang. Zhejiang’s major development zones attracted about US$8.8 billion of FDI in 2018, more than 42 percent of the province’s total FDI received.
- Focus on services and manufacturing
There is a lot going on in Zhejiang. More than half of the GDP comes from the services sector. The service industries accounted for over US$12 billion (64.4 percent) of the FDI into Zhejiang in 2018. Specifically, wholesale and retail, real estate, financial services, and research and development are the main investment areas. 41.8 percent of the regional GDP is contributed by secondary industries, including manufacturing.
- You are not alone
By the end of 2018, 182 of the top 500 global enterprises had invested in Zhejiang. The report: “By 2017, Zhejiang had welcomed 61,080 foreign-invested enterprises with a total investment including foreign investors’ registered capital and loans of US$622.8 billion and the actual utilization of foreign capital of US$194.1 billion.”
- Hangzhou is here
Hangzhou the largest city and provincial capital, is home to a number of major e-commerce players in the Chinese market (for example, Alibaba and Net Ease) and is challenging Shenzhen and Beijing for the title of ‘China’s Silicon Valley’.
- A growing consumer market
There are 55 million people living here, with growing spending power.
- Zhejiang province wants your business
Earlier in 2019, the government of Zhejiang decided to ease market access by implementing the ‘negative list for foreign investment’ and improving the investment environment by protecting FIEs’ intellectual property rights. The Dezan Shira report: “The foreign investment access standards may be lowered for some prioritized industries, such as those catering to the digital economy, biomedicine, and high-end manufacturing.”