China Distribution & Trading Issue 50 January 2008

Transcription

1 LI & FUNG RESEARCH CENTRE China Distribution & Trading IN THIS ISSUE : 1. Central and Southern 1 Liaoning Overview of China s Regional Development Part 2 Seven Emerging City Clusters 2. Shandong Peninsula 4 3. Sichuan and Chongqing 6 region 4. Middle reach of Yangtze 9 5. Cross-Strait West Bank Central Plain region 13 As discussed in Section II, the development level of the three major city clusters are impressive; yet, challenges such as rising costs, and over-exploitation of resources are limiting their further development. Fierce competition in these three regions is making the profit margin low for investors. Therefore, they are seeking opportunities in other regions given that China has such a vast landmass and that it can in fact accommodate other emerging city clusters. Below are the seven emerging city clusters attracting attention of investors (see Map 1). Map 1 Emerging city clusters of China 7. Central Shaanxi 14 13/F, LiFung Centre 2 On Ping Street Shatin, Hong Kong Tel: (852) Fax: (852) lfdc@lf1937.com Source: National Development and Reform Commission 1

2 1. Central and Southern Liaoning (1) General background Liaoning province is situated in the northeastern China and the north of Bohai and Yellow Sea. In 2006, its GDP was billion yuan, up 15.5% yoy. (2) Industrial development Liaoning is regarded as an old industrial region as its industrial sector has a history of more than 100 years. Exhibit 1 shows the major indicators of the industrial sector of Liaoning province in Exhibit 1 Major indicators of industrial sector of Liaoning province, 2006 Value-added (above GDP designated Total GDP Composition - size) yoy Exports yoy (0.1 Primary: GDP (0.1 growth (0.1 growth billion Secondary: per capita billion yuan) (%) billion USD) (%) yuan) Tertiary (yuan) Liaoning 4, , : 51.1 : ,788 Shenyang , : 45.2 : ,940 Dalian , : 47.8 : ,579 Sources: China Statistical Yearbook 2006 & 2007, Liaoning Statistical Yearbook 2006 & 2007, Shenyang Statistical Yearbook 2006 & 2007 and Dalian Statistical Yearbook 2006 & 2007 In 2006, the secondary industry accounted for 51.1% of the province s GDP, reaching billion yuan. The gross industrial output value of enterprises above designated size amounted to 1,416.8 billion yuan, recording a yoy increase of 31.0%. And the total value-added of industry of enterprises above designated size was billion, up 33.2% yoy. Major industries include general purpose equipment manufacturing, processing of agricultural products, non-metallic mineral products manufacturing and oil and energy processing. Ocean economy is also a focus of the province s economy. Since Liaoning is a coastal province and has rich natural resources, it is natural for it to develop related industries such as ocean fishing, ocean transport, ocean oil and gas, shipbuilding, salt and ocean tourism. Major products include ocean medicine, ocean functional food and other related new products. Major development plan: the Five Areas and One Belt To boost the coastal economy of the province and attract more investment, the province announced a major development plan: the Five Areas and One Belt. The plan covers the development of five major areas as well as cities along the coastal line. The five areas refer to Dalian Changxing Island Industrial Area, Yingkou Coastal Industrial Base, Jinzhou Bay coastal economic zone, Dandong Industrial Park and Zhuanghe Huayuankou Industrial Park while the belt refers to the coastal line from Suizhong County ( ) in Huludao City ( ) to Donggang ( ) in Dandong City ( ). Exhibit 2 summarizes the major industries in the five areas. 2

3 Exhibit 2The major industries in the Five Areas Area Industries Dalian Changxing Island Industrial Area Major industries include equipment manufacturing, shipbuilding; ( ) supported by natural gas and coal industries. Warehousing, logistics and export processing are also included. Yingkou Coastal Industrial Base Major industries include new materials, electronics, plastic and textile ( ) and modern service industry. Jinzhou Bay coastal economic zone Major industries include petrochemical, auto parts, pharmaceuticals, ( ) cargo production and logistics; a base of heavy industry: Dandong Industrial Park Various industries including paper, wood processing, mining, etc. ( ) Zhuanghe Huayuankou Industrial Park Hi-tech industries, new energy, agricultural products processing, new ( ) materials, etc. Sources: Report on Development of Provinces in China (2007) (2007 ) and the Development Report of China s Regional Economy ( ) ( ) (3) Consumer market and retail sector Liaoning province is one of the emerging consumer markets in northeastern China. Its total retail sales of consumer goods rose from billion yuan in 2005 to billion yuan, up 14.5% yoy. The annual per capita disposable income of urban residents rose from 9,108 yuan in 2005 to 10,370 yuan in 2006, with a yoy increase of 13.9%. Major consumer centers are located in Dalian and Shenyang. Exhibit 3 shows the key indicators of the consumer market of the province. Exhibit 3 Major indicators of the consumer market of Liaoning province, 2006 Urban Total retail household Rural GDP yoy sales yoy disposable yoy household yoy (0.1 GDP per growth (0.1 growth income growth net income growth billion yuan) capita (%) billion yuan) (%) (yuan) (%) (yuan) (%) Liaoning 9, , , , Shenyang 2, , , , , Dalian 2, , , , Sources: China Statistical Yearbook 2006 & 2007, Liaoning Statistical Yearbook 2006 & 2007, Shenyang Statistical Yearbook 2006 & 2007 and Dalian Statistical Yearbook 2006 & 2007 Major department stores and shopping centers in Liaoning include Tianhe Parkson Shopping Center ( ), Dashang Fushun Group ( ), Jinzhou Zhongbai Group ( ), Zhongxing-Shenyang Commercial Building ( ), Zhongxing-Dalian Commercial Building ( ) etc. 3

4 Prime retail areas in Dalian are located in Qingniwa ( ), Renmin Road ( ) and Xi an Road ( ). Qingniwa is one of the traditional retail areas in Dalian. Most of the high-end brand stores are located in Renmin Road area. Xi an road area emerged as a new retail area in recent years, mainly targeting local residents. 2. Shandong Peninsula (1) General background Shandong peninsula refers to the cities in Shandong province which have close vicinity to South Korea and Japan. The peninsula is the prime area where the Korean and Japanese companies are relocating their industries. Qingdao is the core city, while Ji nan and Yantai are two emerging cities in this region. (2) Industrial development In 2006, the GDP of Shandong province was 2,207.7 billion yuan and the yoy growth rate was 14.7%. Exhibit 4 shows the major indicators of the industrial sector of the province in Exhibit 4 Major indicators of industrial sector of Shandong province, 2006 Gross Industrial Value- Output Value added (above (above Total GDP Contracted designated designated Exports GDP Composition - FDI FDI size) yoy size) yoy (0.1 yoy (0.1 Primary: (0.1 Utilised GDP per (0.1 growth (0.1 growth billion growth billion Secondary: Heavy : billion (0.1 billion capita billion yuan) (%) billion yuan) (%) USD) (%) yuan) Tertiary Light USD) USD) (yuan) Shandong 38, , , :57.8: : ,794 Ji nan 2, , :45.9: : ,394 Qingdao 5, , , :52.3: : ,892 Sources: China Statistical Yearbook 2006 & 2007, Shandong Statistical Yearbook 2006 & 2007, Ji nan Statistical Yearbook 2006 & 2007 and Qingdao Statistical Yearbook 2006 & 2007 In 2006, the secondary industry accounted for 57.8% of the province s GDP, which amounted to billion yuan. The gross industrial output value of enterprises above designated size was billion yuan, recording a yoy increase of 27.1%. And the total value-added of industry of enterprises above designated size was 1,149.4 billion yuan, up 22.6% yoy. The proportion of light industry to heavy industry was 35.6: 64.4 in Exhibit 5 shows the output share of leading industries of Shandong province in

5 Exhibit 5 The output share of leading industries of Shandong province, 2006 Total Output Value % Share (0.1 billion yuan) in Shandong Seven leading industries 18, Processing of food from agricultural products 3, Manufacture of textile 2, Manufacture of chemical raw material and chemical products 3, Manufacture of non-metallic mineral products 2, Manufacture and processing of ferrous metals 2, Manufacture of general purpose machinery 2, Manufacture of electrical machinery and equipment 2, Source: Shandong Statistical Yearbook 2007 As shown, Shandong is rich in oil and coal and the related industries are strong. The second largest oil field (Shengli Oil Field) of China is also located in the province. Shandong is also an important base of agricultural and marine production. For example, Yantai is an export centre of agricultural products such as apples and vegetables. New industries utilizing ocean resources such as offshore petroleum and seaside tourism are also well established in the area. Shandong is one of the largest industrial production bases in China. Industries are mainly located in Qingdao, Yantai, Weifang, Ji nan and Weihai. The province has attracted many Korean companies to set up production bases in its territory. As of June 2006, 15 out of the top 20 Korean top groups have invested in Shandong province. Examples include Samsung, LG, SK Holdings, Hyundai Motor and Lotte. Exhibit 6 summarizes the major industries in selected cities. Exhibit 6 Major industries in selected cities of Shandong province City Industry Qingdao World consumer electronics industry R&D base Ji nan National communications innovation park and a national centre for vehicles Weifeng National s largest motor centre and ocean chemical industry centre Yantai R&D base of advanced industries such as mobile phones and computers Zibo National R&D base of new materials Rizhao Is building a Korean industrial park for Hyundai Weihai Had built some Korean industrial park for companies like Samsung, and other shipbuilding companies Source: Development Report of China s Regional Economy ( ) ( ) (3) Consumer market and retail sector Shandong was the second largest consumer market among the provinces in China (only after Guangdong province) and its total retail sales of consumer goods totalled billion yuan (up 16.3% yoy), accounted for 9.3% of the national total in The annual per capita disposable income of urban households of Shandong grew by 13.5% to 12,192 yuan in Exhibit 7 shows the major indicators of the consumer market of the province. 5

6 Exhibit 7 Major indicators of the consumer market of Shandong, 2006 Urban Total retail household Rural GDP GDP per yoy sales yoy disposable yoy household yoy (0.1 capita growth (0.1 growth income growth net income growth billion yuan) (yuan) (%) billion yuan) (%) (yuan) (%) (yuan) (%) Shandong 22, , , , , Ji nan 2, , , , Qingdao 3, , , , , Sources: China Statistical Yearbook 2006 & 2007, Shandong Statistical Yearbook 2006 & 2007, Ji nan Statistical Yearbook 2006 & 2007 and Qingdao Statistical Yearbook 2006 & 2007 Major commercial centers are located in Ji nan, Qingdao, Yantai, and Weifang. Major department stores and shopping centers in Shandong include Shandong Yinzuo Shopping Center ( ), Zibo Department Store Building ( ), Qingdao Laoshan Department Store ( ), Qingdao Liqun Group Co., Ltd. ( ), Qingdao Hisense Plaza ( ), Jinan Guihe Plaza ( ), Jinan Hualian ( ), Weihai Department Store ( ), Qingdao First Parkson ( ), Jinan People s Shopping Centre ( ), Qingdao GOME ( ), Jinan GOME ( ) and Yantai Zhenhua Department Store ( ). 3. Sichuan and Chongqing region (1) General background Sichuan province and Chongqing municipality are located in the western part of China. In 2006, their GDPs and yoy growth rates were and billion yuan, and 17.0% and 13.7% respectively. (2) Industrial development Sichuan is one of the most industrialized provinces in western China. Exhibit 8 shows the major indicators of the industrial sector of Sichuan province and Chongqing municipality in Exhibit 8 Major indicators of industrial sector of Sichuan province and Chongqing municipality, 2006 Gross Value- Industrial added Output Value of industry (above (above GDP designated designated Total Composition - FDI size) yoy size) yoy Exports yoy GDP Primary : Utilised GDP per (0.1 growth (0.1 growth ( 0.1 growth (0.1 Secondary : (0.1 capita billion yuan) (%) billion yuan) (%) billion USD) (%) billion yuan) Tertiary billion USD) (yuan) Chongqing 3, , : 43.0 : ,457 Sichuan 7, , , : 43.7 : ,546 Chengdu 2, , : 44.1 : ,171 Sources: China Statistical Yearbook 2006 & 2007, Sichuan Statistical Yearbook 2006, Chongqing Statistical Yearbook 2006 & 2007 and Statistical Communique of Sichuan and Chengdu 2005 &

7 In 2006, the secondary industry accounted for 43.7% of the province s GDP, reaching billion yuan. The gross industrial output value of enterprises above designated size amounted to billion yuan in 2006, recording a yoy increase of 28.4%. And the total value-added of industry of enterprises above designated size was billion, up 29.0% yoy. As for Chongqing municipality, the secondary industry accounted for 43.0% of its GDP, reaching billion yuan in The gross industrial output value of enterprises above designated size amounted to billion yuan, recording a yoy increase of 27.3%. And the total value-added of industry of enterprises above designated size was 84.5 billion, up 18.0% yoy. Exhibit 9 and 10 show the performance of leading industries of Sichuan province and Chongqing municipality in Exhibit 9 Performance of leading industries of Sichuan province, 2006 Total value-added of industry % Share (0.1 billion yuan) in Sichuan Four leading industries 1, Hi-tech industries Resource-related (such as minerals and metals) industries Machinery manufacturing industries Processing of agricultural products Source: Sichuan Statistical Communique 2006 Exhibit 10 Performance of leading industries of Chongqing municipality, 2006 Total Output Value % Share (0.1 billion yuan) in Chongqing Eight leading industries 2, Raw materials and chemical products Non-metal mineral products Smelting and pressing of ferrous metals Smelting and pressing of non-ferrous metals Ordinary equipment Transportation equipment 1, Electric equipment and machinery Electric power and heat production and supply Source: Chongqing Statistical Yearbook 2007 The hi-tech industry and R&D development have been fast in this region. There are two state-level hi-tech industries development zones: the Chengdu New and Hi-tech Industries Development Zone and the Mianyang New and Hi-tech Industries Development Zone. Internationally renowned companies such as Microsoft, Cisco, Intel, IBM and Motorola have already entered the zones and set up R&D centers. 7

8 Sichuan is rich in natural resources, including herbs. The presence of numerous kinds of herbs has helped the province to emerge as one of the major bases of Chinese medicine in China. Sichuan has over 130 pharmaceutical companies and output of traditional Chinese medicine was the second highest in China. Chengdu is selected by the Ministry of Science and Technology to set up the first state-level Modernized Science and Technology Industry Base for Traditional Chinese Medicine. A number of Hong Kong companies have invested in modernizing traditional Chinese medicine, including New World Group. (3) Consumer market & retail sector In recent year, the region has been gaining increasing attention from retailers who seek to develop new markets in the inland provinces of China. Sichuan was the biggest consumer market in the western part of China in 2006 and its total retail sales of consumer goods surged to billion yuan in 2006 from billion yuan in 2005, representing a yoy growth of 14.8%. In 2006, annual per capita disposable income of urban households reached 9,350 yuan, representing a yoy increase of 11.5%. Exhibit 11 presents the major indicators of the consumer markets in Sichuan and Chongqing. Exhibit 11 The major indicators of the consumer markets in Sichuan and Chongqing, 2006 Urban Rural Total retail household household GDP GDP per yoy sales yoy disposable yoy net yoy (0.1 capita growth (0.1 growth income growth income growth billion yuan) (yuan) (%) billion yuan) (%) (yuan) (%) (yuan) (%) Chongqing 3, , , , , Sichuan 8, , , , , Chengdu 2, , , , , Sources: China Statistical Yearbook 2006 & 2007, Sichuan Statistical Yearbook 2006 & Chongqing Statistical Yearbook 2006 & 2007, Statistical Communique of Sichuan and Chengdu 2005 & 2006 Chengdu Chengdu is the capital city of Sichuan and it is a market with huge potential in the western part of China. Its total retail sales of consumer goods rose from 99.9 billion yuan in 2005 to billion yuan, up 14.9% yoy. The annual per capita disposable income of urban residents rose from 11,359 yuan in 2005 to 12,789 yuan in 2006, with a yoy increase of 12.6%. Chunxi Road ( ), Yanshikou ( ), Luomashi ( ) and Zongbei ( ) are the four traditional retail precincts in Chengdu. In particular, Chunxi Road, as a regional hub in Southwest China, has established a good reputation for both local shoppers and tourists. Chongqing Chongqing is the only municipality located in the western part of Mainland China. Rising purchasing power in recent years in the city can be observed. In terms of annual per capita disposable income of urban residents, Chongqing reached 11,570 yuan in 2006, grew by 12.9% from Total retail sales of consumer goods reached billion yuan in 2006, an increase of 15.4% from

9 Chongqing is also the retail center of southern and western China. Yubei ( ), Lanko Hyatt ( ) and Metropolitan ( ) are some popular retail properties in the city. 4. Middle reach of Yangtze (1) General background Middle reach of Yangtze refers to 12 cities: Wuhan, Huangshi, Ezhou, Huanggang, Xiantao, Qianjiang, Xiaogan, Xianning, Tianmen, Suizhou, Jingmen and Jingzhou of Hubei province; Xinyang of Henan province; Jiujiang of Jiangxi province; and Yueyang of Hunan province. (2) Industrial development Wuhan is the center of this city cluster and its GDP and GDP per capita in 2006 were billion yuan and 29,500 yuan respectively. Exhibit 12 shows the major indicators of industrial sector of Hubei province and Wuhan. Exhibit 12Major indicators of industrial sector of Hubei province and Wuhan, 2006 Gross Value- Industrial added Output Value of industry (above (above GDP designated designated Total Composition - size) yoy size) yoy Exports yoy GDP Primary : GDP per (0.1 growth (0.1 growth (0.1 growth (0.1 Secondary : capita billion yuan) (%) billion yuan) (%) billion USD) (%) billion yuan) Tertiary (yuan) Hubei 7, , , : 44.4 : ,296 Wuhan 2, , : 46.1 : ,500 Sources: China Statistical Yearbook 2006 & 2007, Hubei Statistical Yearbook 2006, Wuhan Statistical Yearbook 2006 and Statistical Communique of Hubei and Wuhan 2005 & 2006 The gross industrial output value of enterprises above designated size of Hubei province recorded billion yuan in 2006, up 22.9% yoy. The total value-added of industry of enterprises above designated size was billion yuan, representing a yoy increase of 19.2%. Wuhan, the capital of Hubei, accounted for 37.8% of the total industrial output and 36.8% of total value-added. Major industrial products of the region include yarn, cloth, cigarettes, coal, crude oil, crude steel, rolled steel, cement, sulphuric acid, chemical fertilizers and motor vehicles. Exhibit 13 shows the output share of these products in

10 Exhibit 13 Output share of major industrial products of Hubei province, 2006 Total Output yoy growth (%) Yarn (10,000 ton) Cloth (0.1 billion meter) Cigarettes (0.1 billion piece) 1, Coal (10,000 ton) Crude oil (10,000 ton) Crude steel (10,000 ton) 1, Rolled steel (10,000 ton) 1, Cement (10,000 ton) 5, Sulphuric acid (10,000 ton) Chemical fertilizers (10,000 ton) Motor vehicles (10,000 unit) Source: Statistical Communique of Hubei 2006 Hubei is one of the important sites of iron and steel production in China. The relatively comprehensive production chain including mining, separation, smelting, and designing has been formed in the region. One of the leading steel giants in China is the Wuhan Iron and Steel Corp. Hubei is also an important base of automobile production in China. One of the famous firm is the Hong Kong listed Dongfeng Motor Corp. It has formed joint ventures with Nissan and Peugeot. Related industries such as auto parts industry are also flourishing in the area. Tobacco is also another key industry of the region. The production of the industry was billion pieces in 2006, with a yoy increase of 3.4%. Wuhan Tobacco Group is the leading company in the industry. (3) Consumer market and retail sector Wuhan is an emerging consumer market not to be missed. Its total retail sales of consumer goods rose form billion yuan in 2005 to billion yuan in 2006, up 14.6% yoy. In 2006, annual per capita disposable income of urban households of Wuhan grew by 13.9% from 10,850 yuan in 2005 to 12,360 yuan in Exhibit 14 shows the major indicators of the consumer market of Wuhan and Hubei province. Exhibit 14 Major indicators of the consumer market of Hubei province and Wuhan, 2006 Urban Total retail household Rural GDP GDP per yoy sales yoy disposable yoy household yoy (0.1 capita growth (0.1 growth income growth net income growth billion yuan) (yuan) (%) billion yuan) (%) (yuan) (%) (yuan) (%) Hubei 7, , , , , Wuhan 2, , , , , Sources: China Statistical Yearbook 2006 & 2007, Hubei Statistical Yearbook 2006, Wuhan Statistical Yearbook 2006 and Statistical Communique of Hubei and Wuhan 2005 &

11 Major retail places in Wuhan include Jiali Plaza ( ) from Hong Kong, New World Shopping Arcade ( ) from New World Development Group and Wuhan Mall ( ) from Tak Shun Group. Pearl River Commercial City from Guangdong, Shanghai Commercial City from Shanghai and Wangfujing Department Store from Beijing have also set up their branches in Wuhan. Examples of local retailers in Wuhan include Wuhan Department Store, Wuhan Zhongnan Commercial Group ( ), Wuhan Hanshang Group ( ) and Wuhan Zhongxing Department Store ( ). 5. Cross-Strait West Bank (1) General background The Cross-Strait West Bank is actually referring to Fujian province. In 2006, its GDP was billion yuan, rose 14.8% yoy. (2) Industrial development Fujian province is probably the first area in China the Taiwanese companies invested in since the opening of the country due to its vicinity to the island. Many Taiwanese companies moved their labour-intensive or land-consuming industries to Fujian province since then. Exhibit 15 shows the major indicators of the industrial sector of Fujian province in Exhibit 15 Major indicators of industrial sector of Fujian province, 2006 Gross Industrial Output Value (above GDP designated Total Composition - Contracted FDI size) yoy Exports yoy GDP Primary : FDI Utilised GDP per (0.1 growth (0.1 growth (0.1 Secondary : Heavy : (0.1 (0.1 capita billion yuan) (%) billion USD) (%) billion yuan) Tertiary Light billion USD) billion USD) (yuan) Fujian 10, , : 49.1 : : ,471 Fuzhou 2, , : 46.1 : : ,874 Xiamen 2, , : 53.9 : : ,130 Sources: China Statistical Yearbook 2006 & 2007, Fujian Statistical Yearbook 2006 & 2007, Statistical Communique of Fuzhou and Xiamen 2005 & 2006 In 2006, the secondary industry accounted for 49.1% of the province s GDP, reaching billion yuan. The gross industrial output value of enterprises above designated size amounted to 1,000.5 billion yuan, recording a yoy increase of 23.0%. The proportion of light industry to heavy industry was 45.5 : 55.5 in One of the distinctive characteristics of Fujian s industrial development is its source of investment. Hong Kong has been the major investment sources for many areas in China and Fujian is no exception. However, as said before, Taiwan is just opposite the province across the strait, so it has been investing a lot in the province too. As of mid 2006, 35 out of the top 100 Taiwanese enterprises have entered Fujian. 11

12 Leading industries of Fujian province include textile industry, textile garments, shoes and caps products, leather, furs, down and related products, non-metal mineral products, telecommunications, computer, and other electronic equipment and production and supply of electricity and heating power. Exhibit 16 shows their performance in Exhibit 16 Performance of leading industries of Fujian province, 2006 Total Output Value % Share (0.1 billion yuan) in Fujian Six leading industries 4, Textile industry Textile garments, shoes and caps products Leather, furs, down and related products Non-metal mineral products Telecommunications, computer, and other electronic equipment 1, Production and supply of electricity and heating power Source: Fujian Statistical Yearbook 2007 Industrial clusters are prevalent in Fujian province, especially in petrochemical, automobile manufacturing and electronics industries. For instance, clusters of computers, mobile phones and digital visual & audio products can be found in Xiamen; while clusters of home appliances and digital meters and instruments can be seen in Zhangzhou ( ). (3) Consumer market and retail sector Fujian province is one of the emerging city clusters for consumer market. The total retail sales of consumer goods of Fujian province grew from billion in 2005 to billion yuan in 2006, up 15.3% yoy. The annual per capita disposable income of urban households reached 13,753 yuan in 2006 from 12,321 yuan in 2005 increased by 11.6% yoy. More information on the province s consumer market is provided in Exhibit 17. Exhibit 17 Major indicators of the consumer market of Fujian, 2006 Urban Total retail household Rural GDP yoy sales yoy disposable yoy household yoy (0.1 GDP per growth (0.1 growth income growth net income growth billion yuan) capita (%) billion yuan) (%) (yuan) (%) (yuan) (%) Fujian 7, , , , , Fuzhou 1, , , , Xiamen 1, , , , Sources: China Statistical Yearbook 2006 &2007, Fujian Statistical Yearbook 2006 & 2007, Statistical Communique of Fuzhou and Xiamen 2005 &

13 Major retail areas in Xiamen include Zhongshan Road ( ), Railway Station area ( ) and Jiahe Road ( ). The Zhongshan Road retail hub is the busiest one. With the continuous expansion of the city centre, the retail business of Railway Station area and Jiahe Road become increasingly mature and supply of retail premises kept growing. Currently, three large-scale shopping centers are under construction in Zhongshan Road area: Tiger City ( ), Nanzhong Plaza ( ) and Hongkong Times Plaza ( ). 6. Central Plain region (1) General background Central Plain region refers to the nine cities in Henan province: Zhengzhou, Luoyang, Kaifeng, Pingdingshan, Xinxiang, Jiaozuo, Xuchang, Luohe and Jiyuan. Zhengzhou is the centre of this city cluster. The GDP of Henan province rose to 1,249.6 billion yuan in 2006, up 16.4% yoy. (2) Industrial development Secondary industry dominated in Henan province. Exhibit 18 shows the major indicators of the industrial sector of Henan province and Zhengzhou. Exhibit 18 Major indicators of industrial sector of Henan province and Zhengzhou, 2006 Valueadded (above GDP designated Total Composition Contracted FDI size) yoy Exports yoy GDP Primary : FDI Utilised GDP per (0.1 growth (0.1 growth (0.1 Secondary : (0.1 (0.1 capita billion yuan) (%) billion USD) (%) billion yuan) Tertiary billion USD) billion USD) (yuan) Henan 4, , : 53.8 : ,313 Zhengzhou , : 53.2 : ,961 Sources: China Statistical Yearbook 2006 & 2007, Henan Statistical Yearbook 2006 & 2007 The total value-added of industry of enterprises above designated size was billion yuan, representing a yoy increase of 29.7%. Zhengzhou, the capital of Henan, accounted for 17.4% of the total value-added. Prominent industries of the province include food processing, non-ferrous metals, chemical engineering, automobile and parts, equipment manufacturing and textile wearing apparel. Exhibit 19 shows their performance in

14 Exhibit 19 Performance of prominent industries of Henan province, 2006 Total value-added of industry of enterprises above designated size % Share (0.1 billion yuan) in Henan Six prominent industries 2, Food processing Non-ferrous metals Chemical engineering Automobile and parts Manufacture of equipment Textile wearing apparel Source: Henan Statistical Yearbook 2007 (3) Consumer market and retail sector The total retail sales of Henan province reached billion yuan in 2006, with a yoy increase of 15.5%. The annual per capita disposable income of the urban households recorded 9,810 yuan in 2006, up 13.2 yoy. Exhibit 20 provides a general picture of the consumer market of Henan province and Zhengzhou. Major consumer markets are located in Zhengzhou, Nanyang and Luoyang. Exhibit 20 Major indicators of the consumer market of Henan and Zhengzhou, 2006 Urban Total household Rural GDP GDP per yoy retail sales yoy disposable yoy household yoy (0.1 billion capita growth (0.1 billion growth income growth net income growth yuan) (yuan) (%) yuan) (%) (yuan) (%) (yuan) (%) Henan 12, , , , , Zhengzhou 2, , , , Sources: China Statistical Yearbook 2006 & 2007 and Henan Statistical Yearbook 2006 & Central Shaanxi (1) General background Central Shaanxi refers to cities situated in Shaanxi province. Cities of this cluster include Xi an, Xianyang, Baoji, Weinan, Tongchuan, Shangzhou, and etc. Shaanxi province is a place of long history and is home of many ancient heritages. Thanks to its rich mineral resources, the related industries also contribute significantly to the economy. 14

15 (2) Industrial development The GDP of Shaanxi province amounted to billion yuan in 2006, representing a yoy increase of 19.9%. The GDP of Xi an, the centre of this city cluster, was billion yuan in 2006, representing a yoy increase of 14.2%. Exhibit 21 shows the major indicators of the industrial sector of Shaanxi province and Xi an. Exhibit 21 Major indicators of industrial sector of Shaanxi province and Xi an, 2006 Gross Industrial Value- Output Value added (above (above GDP designated designated Total Composition Contracted FDI size) yoy size) yoy Exports yoy GDP Primary : FDI Utilised GDP per (0.1 growth (0.1 growth (0.1 growth (0.1 Secondary : Heavy : (0.1 (0.1 capita billion yuan) (%) billion yuan) (%) billion USD) (%) billion yuan) Tertiary Light billion USD) billion USD) (yuan) Shaanxi 4, , , : 53.9 : : ,138 Xi an 1, , : 42.4 : : ,798 Sources: China Statistical Yearbook 2006 & 2007, Shaanxi Statistical Yearbook 2006 &2007 and Xi an Statistical Yearbook 2007 The gross industrial output value of enterprises above designated size of Shaanxi province recorded billion yuan in 2006, up 30.8% yoy. The total value-added of industry of enterprises above designated size was billion yuan, representing a yoy increase of 38.5%. Xi an, the capital of Shaanxi, accounted for 26.9% of the total industrial output and 20.3% of total value-added. The proportion of heavy industry to light industry of Shaanxi was 84.2 : 15.8 in Pillar industries of the province include electronic and telecommunications, petrochemical, machinery manufacturing, medicine manufacturing, food manufacturing, textile and apparel, non-metallic mineral products and smelting and pressing of nonferrous metals. Exhibit 22 shows their performance in Exhibit 22 Performance of pillar industries of Shaanxi province, 2006 Total Output Value % Share (0.1 billion yuan) in Shaanxi Eight pillar industries 4, Electronic and telecommunications Petrochemical 2, Machinery manufaturing Medicine manufacturing Food manufacturing Textile and apparel Non-metallic mineral products Smelting and pressing of non-ferrous metals Source: Shaanxi Statistical Yearbook

16 (3) Consumer market and retail sector Xi an is the major consumer market in this city cluster. Exhibit 23 shows the major indicators of the consumer market of Shaanxi province and Xi an. Shaanxi s total retail sales of consumer goods rose from billion yuan in 2005 to billion yuan in 2006, up 15.1% yoy. And among the cities, Xi an accounted for more than 50% of the total retail sales of the province and its annual per capita disposable income of urban households of grew by 13.3% from 9,628 yuan in 2005 to 10,905 yuan in Exhibit 23 The situation of the consumer market in Shaanxi, 2006 Urban Total retail household Rural GDP GDP per yoy sales yoy disposable yoy household yoy (0.1 capita growth (0.1 growth income growth net income growth billion yuan) (yuan) (%) billion yuan) (%) (yuan) (%) (yuan) (%) Shaanxi 4, , , , , Xi an 1, , , , Sources: China Statistical Yearbook 2006 & 2007, Shaanxi Statistical Yearbook 2006 & 2007 and Xi an Statistical Yearbook 2007 Copyright All rights reserved. Though endeavours to ensure the information discussed in this material is accurate and updated, no legal liability can be attached as to the contents hereof. Reproduction or redistribution of this material without s prior written consent is prohibited. 16