Touring the Mainland Regions

This section gives you an overview of opportunities, strengths, and challenges of China’s various regions.

If you’re looking for a specific type of opportunity, you may want to consult the U.S. Commercial Service China Web site (www.buyusa.gov/china/en). The site provides comprehensive information on a number of Chinese cities as well as updated trade leads showing opportunities to participate in various projects or businesses. The Chinese government also provides some provincial and city information at www.fdi.gov.cn. Another way of finding specific opportunities is to go to any of the many, many industry and regional trade fairs that take place in China.

Northeastern China

Here we discuss four areas in northeastern China: Manchuria, Tianjin, Shandong, and Beijing.

Manchuria

Manchuria contains the northeastern-most three provinces in China: Liaoning, Jilin, and Heilongjiang. Parts of Manchuria are next to North Korea and Russia. The area has a little over 100 million people, and it’s the heartland of China’s heavy industry state-owned enterprises (SOEs).

This area is actually a top development priority for the government, and a lot of money’s floating around these three provinces for economic development projects. The governments of the area are emphasizing development of the information technology, telecommunications, environmental technology, automobile parts, and tourism industries.

Harbin, which is the capital of Heilongjiang, ranks among China’s top three cities in academic, scientific, and technological skill, which may make it a good place for research and development. Dalian, which is in Liaoning, has the largest deep-water port in northeast China and is one of the largest oil refinery bases in China. It has a good number of workers who speak Japanese or Russian.

Tianjin

Tianjin province is between Beijing and the Bohai Bay. It’s at the crossroads of two major railway lines: Beijing-Shanxi and Beijing-Shanghai. Tianjin’s port has the biggest container dock in China. Because of Tianjin’s location near Beijing, it’s a major logistics center. It also attracts a good deal of investment in manufacturing — particularly in electronic products and biochemicals. Motorola and Samsung Electronics are among the biggest investors in the area.

Shandong

Shandong is both a province and a peninsula in northeastern China. Shandong is China’s third-largest manufacturing base. It also has large mineral and oil deposits. Qingdao, which is on the southern part of the peninsula, is one of China’s five major ports and is also a major tourist attraction.

Beijing

Beijing is hosting the 2008 Olympics, and it’s made enormous investments in infrastructure to prepare for the event.

Beijing is one of four cities in China that enjoy provincial-level status. In addition to being China’s government capital and home to over 12 million people, it’s China’s academic capital. Beijing has 475 research centers and over 60 colleges and universities, including the country’s two most prestigious, Peking University and Tsinghua (pronounced ching-hwa) University. As a result, Beijing has a very well-educated workforce that provides it with a solid base for services.

The city also produces large amounts of chemicals, cars and car parts, textiles, garments, and appliances.

The Yangtze River Delta

The Yangtze River Delta includes the provinces of Zhejiang, Anhui, and Jiangsu. It also includes Shanghai, which is a provincial-level city. The Yangtze River Delta is one of China’s two most economically powerful regions.

Zhejiang and Jiangsu are much bigger economically than Anhui (although Anhui’s capital, Hefei, is developing nicely these days). The most important cities in Zhejiang and Jiangsu are Nanjing (in Jiangsu), Hangzhou, and Ningbo (both in Zhejiang). The region has a large heavy manufacturing base but also excels in high-tech and biotech products. Zhejiang and Jiangsu have excellent ports, airports, and roads.

Shanghai itself makes up 5 percent of China’s gross domestic product, even though it contains only 1 percent of the population (although it’s one of the world’s largest cities at about 18 million people). It’s China’s commercial center with numerous factories on its outskirts, a port that processes about 25 percent of China’s exports, and numerous Chinese and foreign banks.

Shanghai is easier to do business in and more transparent than most other parts of China. By the end of the decade, it hopes to become the high technology center of China.

Shanghai will also host the 2010 World Expo, and it’s investing billions of dollars in infrastructure to prepare.

The Pearl River Delta

The Pearl River Delta in Guangdong Province in the south of China is China’s most prosperous region. It was the first part of the country opened up to foreign investment, and it benefited greatly from money and technology from Hong Kong.

The major commercial cities are Guangzhou (the capital of the province) and Shenzhen. Zhuhai is a smaller city, but it’s important commercially because it was one of China’s original special economic zones (SEZs).

The region has several major ports and extensive road networks. However, the density of people and factories has created some bottlenecks moving people and goods. The government is working on building more infrastructure.

The Pearl River Delta is China’s technology manufacturing heartland (although as we mention in the preceding section, Shanghai hopes to wrest that title away). Unfortunately, the area has paid a high environmental price for its prosperity. Air pollution from Guangdong factories is even a hot-button issue in Hong Kong.

The wild, wild west

Some pockets of the west are developing well — in particular, the cities of Chongqing, Chengdu, and Kunming are booming. Xi’an is also attracting a lot of foreign technology investors. If you look at a map, these cities appear to be more central than western; however, given China’s heavy bias toward coastal development, almost every inland province can be considered western.

The central government is on a well-publicized drive to develop the west. With the exception of the few pockets of prosperity we just mentioned, it may be too early to say whether the west offers much opportunity. In general, costs should be extremely low, and you should see a lot of incentives.

The underdeveloped parts of the west have a tough time competing with many coastal areas in business environment transparency, the rule of law, and infrastructure. But smart people are trying hard to change this situation, so if you’re willing to take a bigger risk, you may be rewarded.