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  • ECONOMIC OVERVIEW OF JIANGSU PROVINCE

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  • ECONOMIC OVERVIEW OF JIANGSU PROVINCE ECONOMIC OVERVIEW OF JIANGSU PROVINCE

    ECONOMIC OVERVIEW OF JIANGSU PROVINCE

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    NanjingJIANGSU

  • ECONOMIC OVERVIEW OF JIANGSU PROVINCE ECONOMIC OVERVIEW OF JIANGSU PROVINCE

    CONTENTS

    This brochure will serve as a guide for companies from the Netherlands looking for a suitable location in Jiangsu Province to establish a legal entity. The brochure provides general infor-mation about the province of Jiangsu and in more detail about its 13 municipalities. Per city practical information is provided, to assess the city in terms of its suitability for investment.

    Introduction

    I. Overview of Jiangsu Province

    II. Jiangsus Main Industries

    III. Development Zones in Jiangsu

    IV. Cities of Jiangsu Province South bank of the Yangtze River Changzhou - Nanjing - Suzhou - Wuxi - Zhenjiang - Middle Jiangsu Nantong - Taizhou - Yangzhou - North bank of the Yangtze River Huaian - Lianyungang - Suqian - Xuzhou - Yancheng -

    V. References

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    2013

    NETHERLANDS BUSINESS SUPPORT OFFICE NANJINGMr. Roeland Schuurman (Chief Representative)Mr. Richard He (Deputy Representative)

    This report has been produced in a joint effort by the Netherlands Business Support Office Nanjing and the Consulate-General of the Netherlands in Shanghai.

    This report is part of a series of economic overviews of important regions in China, initiated and developed by the Netherlands Economic Network in China. For more information about these reports, visit www.zakendoeninchina.org or contact the Netherlands Embassy in Beijing at pek-ea@minbuza.nl.

    Unauthorized use, disclosure or copying without permission of the publisher is strictly prohib-ited. The information contained herein, including any expression of opinion, analyses, chart-ing or tables, and statistics has been obtained from or is based upon sources believed to be reliable but is not guaranteed as to accuracy or completeness.

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  • ECONOMIC OVERVIEW OF JIANGSU PROVINCE ECONOMIC OVERVIEW OF JIANGSU PROVINCE

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    INTRODUCTION OVERVIEW OF JIANGSU PROVINCEILocated just northwest of Shanghai, Jiangsu Province is economically the most advanced and dynamic province in China. This brochure provides Dutch enterprises background information when exploring the business opportunities in this province.

    Three levels to choose fromThe so-called first tier cities in China (Beijing, Shanghai, Guangzhou, Shenzhen) attract the most foreign companies by far. Since the beginning of the 1990s, the government has strongly stimulated these cities along the east coast of China in terms of economic development and infrastructure. Although by no means saturated, these markets have become very competitive and increasingly hard to penetrate, particularly for SMEs. In recent years, this policy focused on developing the eastern part of the country has been revised and focus is now on a more equal spread of development throughout the country.

    According to the Chinese city tier system, the second tier cities in Jiangsu are Nanjing, Su-zhou, Wuxi, Changzhou and Nantong, all located along the Yangtze River. The other eight major cities in Jiangsu are third tier cities, mainly in northern Jiangsu. Besides general information about the province as a whole, this brochure provides practical information about each of these 13 cities.

    Jiangsu has a lot to offer to foreign corporations in terms of business opportunities. The cities have experienced rapid economic growth (around 12% since 2000), offer a sound business climate and are investing greatly in the transformation into high-tech and innovation-focused economies.

    Second and third tier cities in an eastern province such as Jiangsu may prove to be very in-teresting and cost-effective for companies that are considering settlement in the vicinity of the Shanghai logistics hub and urban facilities. As a result of the high rate of economic development, the main Jiangsu cities have developed into serious and ambitious partners for international business. Generally, each city has determined certain focus industries or sectors it wants to attract, and shows increasing interest in sustainable and green solutions and companies.

    Challenges and opportunitiesThere are challenges that come with doing business outside of the first tier cities. In these cities the business climate is, compared with Shanghai, generally less adapted to foreign business, English less spoken and the available pool of Chinese employees with experience in Western companies smaller. However, although these challenges exist, the potential for business in these cities is vast. With far less foreign companies in these cities than in a city as Shanghai, the municipal governments generally offer better conditions to potential investors. Besides lower costs (e.g. rent, wages, energy), these cities also offer opportunities in terms of projects (architectural, innovation, etc.). In order to attract foreign investors, local governments have become more acces-sible and often provide favourable tailor-made deals.

    Geography and demographyJiangsu Province is located in the middle of the east coast of China. It borders Shanghai and Zhejiang to the south, Anhui to the west and Shandong to the north. Jiangsu has a coastline of over 1,000 kilometers along the Yellow Sea. The Yangtze River, the long-est river of China, passes through the province in the south. The Beijing-Hangzhou Grand Canal cuts through Jiangsu from north to south, traversing all the east-west river systems. Jiangsu is relatively flat, with most of the province not more than 50 meters above sea level.

    Jiangsus total surface is 102.600 km2, about 2,75 times the Netherlands. The total population is 78,5 million, making Jiangsu the most densely populated province in China with an average of 771 persons per km2. Jiangsu has 13 prefecture-level cities, which are one by one introduced further in this report. Of these cities, Nanjing is the provincial capital.

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    Jiangsus economy at a glanceSince the start of Chinas economic reforms in the 1990s, Jiangsu has been a hot spot for economic development, and is now one of the wealthiest provinces in China with a GDP comparable to that of Switzerland. The main reason for this success is its location in the Yangtze River Delta, an advanced industrial region that generates around one-third of the national GDP. Shanghai operates as the core of the Delta region and has played a crucial role in the development of Jiangsu Province.

    In 2012, Jiangsus GDP was 5.406 billion RMB (USD 860 billion, 10,4% of Chinas total), ranking second of all Chinese provinces, only after Guangdong. Of all provinces, Jiangsu has the highest GDP per capita, which was 10.990 USD in 2012. Notwithstanding Chinas political economy (50% of all companies is state-owned), Jiangsu Province has a very strong private sector. By the end of 2011 there were around 1.2 million private enter-prises in the province, the largest number of private enterprises in all of China.

    Despite the fast economic development of the province as a whole, the southern and northern parts have experienced a remarkably unequal economic growth, resulting in a large wealth gap between these parts. The cities Suzhou, Wuxi, Changzhou, Nanjing and Zhenjiang in southern Jiangsu form the economic hub of the province, made pos-sible by their strategic location in the Yangtze River Delta. As a result, these cities have a GDP per capita of around twice the provincial average. To reduce this gap, the provincial government is currently investing a lot of resources in northern Jiangsu and strongly promotes establishment of foreign companies.

    Importance of foreign trade and FDIExternal trade and foreign direct investment (FDI) play a major role in the economy of Jiangsu. This causes the province to be highly exposed to the global economic un-certainty of the past years. In 2011 Jiangsu accounted for almost 15% of Chinas total external trade and around 18% of the used FDI, making the province Chinas largest recipient of FDI. More than 400 companies listed in the Fortune 500 have already in-vested in Jiangsu.

    The major export markets are the US, Japan, Hong Kong and the European Union. In terms of its manufacturing base, the main imports are electronic and mechanical products, high technology products, and integrated circuit and liquid crystal display panels. The major sources for these imports were South Korea, Taiwan and Japan.

    In 2011, there were around 4500 foreign-funded projects being validated in Jiangsu. The investments are mainly related to telecommunication, computers, machinery & equipment manufacturing, chemicals, wholesale and retail, textiles and commercial

    Jiangsu Province accounts for 1% of the total area in China, 6% of the popula-tion and 10% of the GDP

    services. Jiangsu is home to many of the worlds leading multinationals in the field of electronic equipment, chemicals and textiles. In 2011, foreign-invested companies contributed to 71% of the total import and export volume of Jiangsu Province.

    Jiangsu has 11 class I ports, such as the ports of Lianyungan

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