Introduction
Zhejiang is a coastal province in eastern China. Zhejiang borders Jiangsu and Shanghai to the north. Together, they form the Yangtze River Delta Region, the most developed area in China. With the 11th largest population and 1.1% of China’s total land area, Zhejiang’s GDP ranked 4th in China in 2006. Apart from a bustling economy, Zhejiang is also known for its natural attractions, cultural and historical relics, and a highly pro-business atmosphere.
 
South Zhejiang was traditionally poor and underdeveloped due to its mountainous geography which is ill-suited for farming. The economic reforms in the late 1970s have brought huge changes to that region. However, the private sector has seen a rapid growth, especially in the cities of Wenzhou, Ningbo and Shaoxing. The region, together with the more developed north Zhejiang, has helped the province to leapfrog over other regions and become one of the richest provinces in China.   
 
Economic Overview
After over 20 years of development since the reforms and opening-up of China, Zhejiang is now a province with a strong economy, with industry as its leading sector. In 2006, the province’s GDP reached RMB 1,564.9billion (US$199.4 billion), and was ranked the 4th largest economy in China. 
   
It can be seen from the pie chart that the industry sector contributes to more than half of the GDP. The service sector in Zhejiang is also rather strong, with a 40.2% contribution to the GDP. Agriculture is taking a backseat in this economy, making up only 5.9% of the province’s GDP.   
  

 













Zhejiang has the most vibrant private sector in China. In 2006, the value-added industrial output of the province amounted to RMB 565.5 billion. Among them, non-state owned or held companies contributed RMB 462.7 billion or 82% of the total, and small and medium-sized enterprises (SMEs) were the cornerstone of Zhejiang’s economy.  
 
Zhejiang has developed its own economic growth model, dubbed the “Zhejiang Model”. The province encourages and gives autonomy to township enterprises. Although being the majority shareholder of many township enterprises, the local government normally refrains from intervening in the investment and operation decisions of township enterprises. As these enterprises are completely independent in operations, they are essentially the same as private enterprises.
In 2006, fixed asset investment saw a steady growth of 13.8% to RMB 759.3 billion. Most of the funds were diverted to the industry and service sectors, which amount to RMB 320.6 billion and RMB 370.9 billion respectively. Specifically, real estate, highway transportation, public facilities, electrical and heat production and supply, and textile were the top five industries in terms of fixed asset investment.
  

 








Zhejiang is the fourth largest consumer market in China. In 2006, the retail sales of consumer goods amounted to RMB 532.5 billion, accounting for 7% of China’s total. By the end of 2006, the province had 4064 commodity markets, 125 of which have an annual trading volume of above RMB 1 billion and 13 of which possess a volume above RMB 100 million. The total trading volume in 2006 reached RMB 824.7 billion, up 15% year-on-year.

Industry
In the past, light industry played a major role in the provincial economy. However, fuelled by the development of the economy and foreign investment, the industrial structure has changed since 2003. In 2006, heavy industry contributed RMB 318.8 billion, accounting for 56.4% of the total value-added industrial output in Zhejiang.  
 
The four industries with industrial output above RMB 200 billion in 2006 were textile (RMB 458 billion), electric equipment and machinery (RMB 233.3 billion), power (RMB 200.6 billion), and general purpose equipment manufacturing (RMB 200.1 billion). In terms of priority industries, automobiles, electronics and IT, and chemical industries have been strongly encouraged.  














 
Textile
In 2006, the textile industry had a value-added industrial output of RMB 68.8 billion, contributing 4.4% to the province’s GDP. Zhejiang has always been the leading textile and garment production base in China. It is the second largest producer in the country with about 20% market share, while its rival, Guangdong province, took 26% of the market share in 2006. By the end of 2006, there were 7,212 textile enterprises and 2,585 garment enterprises in Zhejiang, accounting for 25% and 20% of China’s total.  
 
In addition, Zhejiang is a major export market for textiles and garments. In the first three quarters of 2007, Zhejiang exported US$12.26 billion worth of textile and garment products, up 18.6% year-on-year, ranking second after Guangdong in China.

Compared to Guangdong, Zhejiang has an advantage in terms of labor costs as they are equipped to draw upon the low-cost labor from neighboring provinces such as Anhui and Jiangxi. Additionally, Zhejiang has a more convenient and cheaper transportation system than Guangdong. The province also has five ports in Ningbo, Zhoushan, Zhapu, Haimen and Wenzhou. Famous garment producers include Younger, Meters Bonwe, Shan Shan, Langsha and Peacebird, which are all well-known brands in China. Most of the textile and garment enterprises are located in Ningbo, Wenzhou, Shaoxing and Hangzhou.
 
Electronics  
The electronic industry is a fast growing sector in Zhejiang. In 2006, the total industrial output of above designated-size enterprises amounted to RMB 158.4 billion while the value-added industrial output reached RMB 22.8 billion, accounting for 5.4% and 3.8% of Zhejiang’s total respectively.  
 
Currently, Zhejiang has set up a relatively strong industrial base in the electronics sector. Hangzhou, Ningbo, Jiaxing, Shaoxing are major production bases of electronic products.  
 
Automobile
Geely Group is a major contributor to Zhejiang’s auto industry. It is a private enterprise, located in Hangzhou, the capital city, with four manufacturing bases in Linhai, Ningbo, Taizhou and Shanghai, specializing in the production of auto parts. The company was among the first batch of automakers that launched self-developed brands.  
 
Geely is one of the fastest growing automakers in China. While it started out as a refrigerator manufacturer in 1986, the company moved to motorcycle manufacturing in 1994 and commenced auto production in 1998. In 2006, Geely produced 207,149 automobiles, which is more than 1,000 times that of the 200 automobiles produced in 1998.  
 
Tourism
Tourism is a pillar of Zhejiang’s service industry. The province has many national scenic spots, such as West Lake, Fuchun River, Xinan River and the Thousand Islands Lake. Every year, Zhejiang attracts a large number of domestic and overseas tourists. In 2006, income from the tourism industry reached RMB 169 billion, up 22.6%.
 
Finance
According to the statistical yearbook of Zhejiang, the total revenue of financial institutions in Zhejiang amounted to RMB 8.1 trillion in 2006, accounting for 11.5% of China’s total. Banks in Zhejiang are one of the best performers in China as the Zhejiang Model has been applied to the banking industry. These banks began lending to the private sector long before those of provinces in the rest of the country. Zhejiang has set up a relatively healthy banking system that invests wisely and provides quality services. 
 
Software
Zhejiang has more than 1,000 software enterprises with over 50,000 employees. In 2006, the industry had a total revenue of RMB 30.7 billion, ranking fifth in China. Famous software enterprises include Insigma Technology, Alibaba.com Corporation, Huansun Technology and SUPCON Group.  
 
In November 2007, the Hangzhou-based e-business provider, Alibaba, was listed on the Hong Kong Stock Exchange, raising a sum of US$1.7 billion. This is a record high for an internet company from Mainland China. Besides Alibaba, industries dealing with software, IT service outsourcing and on-line games provided by Zhejiang enterprises have also expanded quickly.   

Foreign Trade and Foreign Investment
Zhejiang has four major ports in Ningbo, Zhoushan, Zhapu, Haimen and Wenzhou. Among them, Ningbo Zhoushan Port are the largest iron ore and oil transshipment bases in China respectively. Together with Shanghai Port, these ports in Zhejiang have become the gateway to the world for China. 
 
Zhejiang is also a major player in China’s foreign trade. In 2006, the total exports and imports of the province reached US$139.2 billion, up 29.6% from 2005. Exports amounted to US$100.9 billion, of which machinery and electronic products accounted for 42%. Private companies and foreign invested enterprises (FIEs) are the major exporters in this province. In 2006, private enterprises exported US$34.6 billion while FIEs exported US$38 billion, accounting for 34% and 38% of total exports respectively. The major export destinations include the EU, U.S., and Japan, while the main import sources are Japan, Korea and Taiwan.   
   
At the same time, a lot of foreign investment has rushed into Zhejiang. Most of the investments were injected into the developed regions of the province such as Hangzhou, Ningbo, Shaoxing, Jiaxing, Huzhou and Zhoushan. In 2006, the total utilized FDI reached US$8.9 billion. Among the various sectors, the manufacturing sector (specifically, the textile, chemicals, mechanical and electronics industries) has attracted the most foreign investment. The service sector has also attracted US$2 billion worth of utilized FDI, accounting for 33.6% of the province’s total. 
   
Major Development Zones
By the end of 2006, Zhejiang had 13 state-level and 57 provincial-level development zones. In 2006, the total GDP of the 70 development zones amounted to RMB 172.7 billion, accounting for 11% of Zhejiang’s total GDP. Among them, high-tech industries contributed about 40% of the total value. In 2006, these development zones have attracted utilized FDI of US$4.5 billion, accounting for 50% of the province’s total. Major developments zones are clustered in the city of Hangzhou, Ningbo and Shaoxing.  







  

 
Hangzhou Economic and Technological Development Zone (HZEDTZ)  
(including the Hangzhou Export Processing Zone)
Located in the east of Hangzhou, the zone is 20km from the downtown area. HZEDTZ was established in 1993, with the aim of encouraging research and manufacturing in fields such as IT and electronics, machinery, pharmaceuticals and textiles. To further boost the export-oriented manufacturing industry, Hangzhou Export Processing Zone was established in 2000, with a planned area of 2.92 km2. This is the first state-level export processing zone in Zhejiang. 
 
By the end of 2006, HZEDTZ attracted 404 foreign enterprises from 32 countries to set up business in the zone. Thirty-one Fortune 500 enterprises invested in 50 projects in HZEDTZ. In 2006, the total industrial output of HZEDTZ reached RMB 111.3 billion (high-tech industries such as electronics and IT contributed 61% of the total). In addition, the total exports of the zone amounted to US$7.1 billion.
 
In terms of overall competitiveness, HZEDTZ ranked 12th among all state-level development zones in 2006. Major investors include Motorola, Toshiba, Siemens, Terumo, and LG.
 
Hangzhou Hi-tech Park
The park was established in 1990 and approved as a state-level high-tech park in 1991. Ever since, the park has attracted more than 5000 high-tech enterprises to set up business there, accounting for more than 70% of the city’s total (or 25% of the province’s total).  
 
By the end of 2006, 475 foreign enterprises from 32 counties had invested in the park with a total investment of US$3.5 billion. US, UK, Japan and Korea were the major investment sources.
 
In 2006, the GDP of the park amounted to 17.1 billion, and exports reached US$3 billion, up 13.2% and 44% respectively. Among all 53 state-level high-tech parks, Hangzhou High-tech Park was ranked 11th in the same year. Major investors included Bosch, Nokia, Huawei and Utstarcom. 

Education
Zhejiang began carrying out reforms in scientific research institutes relatively early. It explored ways to combine the essential factors of production, such as technology and management, with income distribution.  
 
It also set up the first online technology market in China, featuring the exchange of scientific research and services. In 2006, the R&D expenditure of the province amounted to RMB 21 billion, accounting for 1.3% of the province’s total GDP.
 
By the end of 2006, there were 77 regular higher education institutions (including universities and advanced vocational schools) and more than 720,000 students studying in these institutions. These students will easily fulfill the manpower needs of investors.  
 
Zhejiang University. Located in the city of Hangzhou, Zhejiang University is one of the leading research universities in China. In 1998, the new Zhejiang University was established as a combination of four major universities, namely, Zhejiang Univerisity, Hangzhou University, Zhejiang Agricultural University and Zhejiang Medical University. The move will further aid Zhejiang University in establishing itself as a first-class university in the world. 

Major Cities in Zhejiang
Northern Zhejiang, which includes six cities, has a combined land area of 45,390 sq km, accounting for 44.6% of the province’s total. However, the total GDP of Northern Zhejiang amounted to RMB 1043.6 billion, contributing 67% to the province’s total. The two cities that have the highest GDP are Hangzhou and Ningbo. 
 















 
The next subsections provide a brief overview of the two cities of Hangzhou and Ningbo. 
 
Hangzhou - Key Information

















 
Introduction
Hangzhou is a beautiful city. It is famous for its clean air and blue skies, nice buildings and well-protected environment. The city has been a major destination for tourists and West Lake, among the best tourist attractions in China, is located here. The Thousand Islands Lake is another nationally-acclaimed scenic destination in the region.  
   
Investment Climate  
Hangzhou is one the most important cities in the Yangtze River Delta. The city’s economy is growing rapidly, primarily boosted by its manufacturing and service sectors. In 2006, the city’s GDP reached RMB 344.1 billion – a figure that led to the city ranking 8th among all Chinese cities. The pillar industries of the city’s industry sector include electronics and IT, pharmaceuticals, chemicals, machinery, textiles, food and beverage.   
 
Recently, the city has also been actively developing high-tech industries such as biomedicine, new materials and new energy. In 2006, the total industrial output of high-tech enterprises amounted to RMB 116.5 billion, up 45.6% from 2005. It accounted for 20% of the city’s total.
 
The service sector is also a key contributor to the city’s robust economic growth. Tourism and commerce are the pillars of the city. In 2006, about 1.8 million foreign tourists and 36.8 million domestic travelers visited the city.  
 
The total revenue generated by tourism amounted to RMB 54.4 billion, rising 16.9% from 2005. In recent years, the city has also been promoting modern services such as exhibitions, financial services, logistics and service outsourcing.  
 
Foreign Investment
In 2006, the total foreign trade of Hangzhou amounted to US$38.9 billion, up 30.3% from 2005, accounting for 28% of the province’s total. The total export value amounted to US$26.2 billion (up 32.4%), while the export value of high-tech products reached US$6.8 billion (an increment of 84.6% year-on-year). Major export destinations included U.S., EU and ASEAN countries.  
 
During the year 2006, 747 investment projects were approved with a total investment of US$5.4 billion, up 34.3% from 2005. The utilized FDI amounted to US$2.3 billion, rising 31.7%.  
 
The service sector experienced a fast growth with US$2.6 billion worth of foreign investment being channeled into the sector, while utilized FDI reached US$1 billion. By the end of 2006, 53 Fortune 500 enterprises had set up 87 companies within the city.
 
Four of the state-level development zones, namely Hangzhou Economic and Technological Development Zone, Hangzhou High-tech Park, Xiaoshan Economic and Technological Development Zone and Hangzhou Zhijiang National Tourist Holiday Resort, have attracted the most foreign investments.  
 
Total utilized FDI reached US$1 billion, accounting for almost 45% of the city’s total. In addition, export of the four zones amounted to US$14.6 billion, accounting for more than half the total.  
 
Important Travel Information
Time taken to travel from Xiaoshan International Airport to:
- Beijing
- Guangzhou
- Chengdu
- Shenzhen
- Hong Kong
- Macau  2 hours
1 hours 45 mins
2 hours 40 mins
1 hour 50 mins
2 hours 10 mins
2 hours 5 mins  
 
Ningbo

 


















Introduction
Ningbo is a harbor city located in the northeastern part of Zhejiang and south of the Yangtze River Delta. It was amongst the first batches of coastal cities that were opened to the world. Ningbo was once famed for traditional Chinese furniture production.  
 
Since the mid-1990s, the city has witnessed speedy growth in its economy. To a large extent, the rapid development of the city was due to the Beilun Port, which is the second largest cargo port in China and the fifth largest in the world.
 
Investment Climate
In 2006, Ningbo’s GDP reached RMB 286.4 billion, ranking the city 12th amongst all the Chinese cities in terms of GDP. Its GDP accounted for 18.3% of the Zhejiang province’s total, while the land area accounted for only 9% of the province’s total land area. The city is ranked 4th among the 15 sub-provincial cities in China in terms of total value-added industrial output, with an output of RMB 597.4 billion.  
 
The private sector is the major driving force behind the city’s economic growth. In 2006, the value-added industrial output of non-state owned or held companies amounted to 452.5 billion, accounting for 76% of the city’s total.  
 
Currently, Ningbo has three categories of pillar industries - port-related industry, equipment manufacturing and high-tech industries. Chemicals, energy, iron and steel, paper manufacturing, electronics, textiles, garments and home appliance manufacturing are the key industries of the city.
 
In 2006, high-tech industries had an industrial output of RMB 197 billion, accounting for 32.9% of the city’s total. In addition, equipment manufacturing and port-related industries had industrial outputs of RMB 126.5 billion and RMB 154.8 billion, accounting for 21.2% and 25.9% of the city’s total respectively. 
 
Foreign Investment
The total foreign trade of Ningbo reached US$42.2 billion in 2006, representing an increase of 26% and accounting for 30% of the province’s total. The export value amounted to US$28.8 billion, up 29.4%.  
 
During the same year, total foreign investments amounted to US$4.4 billion and utilized FDI reached US$2.4 billion, accounting for 27% of the province’s total.  
 
The manufacturing sector is still the sector that has received the largest FDI, attracting a utilized FDI of US$2.02 billion which accounts for 83.2% of the city’s total. Machinery, telecommunications, and chemical industries are favored by foreign investors.  
 
The service sector has also seen a rapid development. In 2006, 201 projects with a total of US$1.1 billion in foreign investment was put into this sector, representing an increase of 60% from the previous year.  
 
Utilized FDI was US$410 million, a rise of 30%. In this sector, the transportation, distribution and storage, and software industries attracted the most investments.
 
Important Travel Information
Time taken to travel from Ningbo Lishe International Airport to:
- Beijing
- Guangzhou
- Shenzhen
- Dalian  2 hours 10 mins
2 hours
1 hour 50 mins
1 hour 40 mins