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Friday 5 March 2010
Head for China’s western frontier
Looking to invest in China? Go west, to Chongqing in central western China. Or head for Xian in the central north-west region. Both cities are on a new economic frontier that China is opening up.
This is where a special zone is set up, with incentives to create a pro-business environment, reports CHUANG PECK MING
Looking to invest in China? Go west, to Chongqing in central western China. Or head for Xian in the central north-west region. Both cities are on a new economic frontier that China is opening up.
The Chongqing Two Rivers New Area has been marked out to become a special administrative zone where more incentives and pro-business policies will be put in place to attract foreign investments and spur growth in the city - and Western China.
‘This is the first zone of its kind in Western China, following the Shanghai Pudong New Area that was designed in 1990, and Tianjin Binhai New Area in 2000,’ says Soh Swee Ping, International Enterprise Singapore’s regional director for West China.
‘The achievements of Shanghai Pudong New Area clearly attest to the effects and economic benefits the special zone can bring to the city.’
Chongqing is tipped to be given the green light this year to develop the Chongqing Two River New Area. Its preferential tax rate of 15 per cent is also likely to be extended till 2020.
‘This area spells opportunities for Singapore companies as the government would be encouraging foreign investors to expand into Chongqing, and would be looking for innovative offerings from investors,’ Ms. Soh says. ‘The special incentives would create a pro-business environment.’
Xian is also featured in another ambitious move to develop Western China - the Guanzhong-Tianshui Economic Zone Development Plan, which was approved in June last year. ‘This aims to create a new economic growth pole to bring about a new round of development in the western region,’ Ms. Soh says.
Guanzhong is the central area of Shaanxi Province, which includes Xian. Those keen to put their money in Xian should also be alerted to four other developments:
The integration of Xian and Xianyang into a mega city with a population of 10 million. This could shift high technology industries, national defence and science and technology, or science and technology education from Chengdu to Xian.
The Xian municipal government will shift to the north of the city in October. This means there will be a second centre built around the new administrative hub. The construction of the northern new city, estimated to cost over RMB250 billion (S$51.3 billion), will make the Xian economy more vibrant.
The construction of the Xian Metro and the North railway station will improve the city’s accessibility - and boost its business environment and infrastructure. The first is expected to be completed this year, and the second in 2011. The North railway is touted to be Asia’s biggest and will be an iconic landmark for Xian.
The construction of the Xian High-Tech International Park. Covering 18 sq km, the park is built on the southwest of Xian city and is an extension of Xian High-Tech Development Zone. It will be a high-end residential area that will also boast a playground for expatriates.
The capital of Shaanxi Province, Xian is the site of the ancient terracotta army. It is also a high-tech and research and development hub with over 672 municipal research institutes, 55 state key laboratories and more than 3,000 technical and development institutions.
Xian has a sound modern industrial system and is an important base for aviation, aerospace, weapons, electronics, communications equipment, power transmission equipment, instrumentation, bio-medicine, equipment, etc in China. It also has many well-established learning institutions, colleges and universities.
Chongqing was China’s war-time capital in World War II. Since then, many of its military factories have been re-fitted and re-tooled to make other products, such as trucks.
With a strong industrial background, Chongqing is the third largest automotive manufacturing centre in China. You can’t tell by the little presence of motorcycles in hilly Chongqing, but it is the third biggest manufacturing hub for these bikes in the country.
Chongqing is also a key transport node for West China, being the only key city in this region to be located along the Yangtze River.
Both cities are not complete strangers to Singapore investors. Companies here have pumped money into commercial schools, real estate and transport and logistics business in Chongqing.
OCBC Bank opened its first branch in the city last year. APL has shifted its regional administration centre in China from Shanghai to Chongqing. Somerset, an arm of the Ascott Group, opened a serviced residence there in 2009.
Singapore’s investments in Xian cover a range of industries, including real estate, hospitality, logistics, education and food services. Mapletree Investment’s subsidiary, Xian Yajian Real Estate, is building a retail mall called Vivocity in Xian. Surbana Estates Holdings has teamed up with Hong Kong Henderson Land Development Group to put up a township development that’s due to be completed by 2020.
International Enterprise Singapore, which is pushing Singapore companies to go global, has identified business opportunities for them in these two Chinese cities. For Chongqing: services for the financial industry; supporting services for multinational corporations; education, retail and healthcare services for the expatriate community and affluent locals; urban planning and master planning.
For Xian: real estate developments and infrastructure-related, retail, fashion, food services, potential food sourcing and logistics.
‘Both Chongqing and Xian are showing strong development with GDP growing at 14.9 per cent and 15 per cent respectively,’ Ms. Soh says. ‘Singapore companies need to act fast to capture this window of opportunity quickly.’
But huge business potential comes with huge challenges. Ms. Soh says competition from local firms and MNCs in these two cities is growing.
‘To overcome these, (Singapore) companies can consider acquisitions or joint ventures with local firms as a quick way to gain access to labour, licences and market intelligence,’ Ms. Soh says. ‘Strong partners and good marketing personnel go a long way in growing the business.’
At the same time, it is also important to have experienced local staff who know the local market and have the contacts to help you gear up in the market fast.
2 comments:
Head for China’s western frontier
This is where a special zone is set up, with incentives to create a pro-business environment, reports CHUANG PECK MING
Looking to invest in China? Go west, to Chongqing in central western China. Or head for Xian in the central north-west region. Both cities are on a new economic frontier that China is opening up.
The Chongqing Two Rivers New Area has been marked out to become a special administrative zone where more incentives and pro-business policies will be put in place to attract foreign investments and spur growth in the city - and Western China.
‘This is the first zone of its kind in Western China, following the Shanghai Pudong New Area that was designed in 1990, and Tianjin Binhai New Area in 2000,’ says Soh Swee Ping, International Enterprise Singapore’s regional director for West China.
‘The achievements of Shanghai Pudong New Area clearly attest to the effects and economic benefits the special zone can bring to the city.’
Chongqing is tipped to be given the green light this year to develop the Chongqing Two River New Area. Its preferential tax rate of 15 per cent is also likely to be extended till 2020.
‘This area spells opportunities for Singapore companies as the government would be encouraging foreign investors to expand into Chongqing, and would be looking for innovative offerings from investors,’ Ms. Soh says. ‘The special incentives would create a pro-business environment.’
Xian is also featured in another ambitious move to develop Western China - the Guanzhong-Tianshui Economic Zone Development Plan, which was approved in June last year. ‘This aims to create a new economic growth pole to bring about a new round of development in the western region,’ Ms. Soh says.
Guanzhong is the central area of Shaanxi Province, which includes Xian. Those keen to put their money in Xian should also be alerted to four other developments:
The integration of Xian and Xianyang into a mega city with a population of 10 million. This could shift high technology industries, national defence and science and technology, or science and technology education from Chengdu to Xian.
The Xian municipal government will shift to the north of the city in October. This means there will be a second centre built around the new administrative hub. The construction of the northern new city, estimated to cost over RMB250 billion (S$51.3 billion), will make the Xian economy more vibrant.
The construction of the Xian Metro and the North railway station will improve the city’s accessibility - and boost its business environment and infrastructure. The first is expected to be completed this year, and the second in 2011. The North railway is touted to be Asia’s biggest and will be an iconic landmark for Xian.
The construction of the Xian High-Tech International Park. Covering 18 sq km, the park is built on the southwest of Xian city and is an extension of Xian High-Tech Development Zone. It will be a high-end residential area that will also boast a playground for expatriates.
The capital of Shaanxi Province, Xian is the site of the ancient terracotta army. It is also a high-tech and research and development hub with over 672 municipal research institutes, 55 state key laboratories and more than 3,000 technical and development institutions.
Xian has a sound modern industrial system and is an important base for aviation, aerospace, weapons, electronics, communications equipment, power transmission equipment, instrumentation, bio-medicine, equipment, etc in China. It also has many well-established learning institutions, colleges and universities.
Chongqing was China’s war-time capital in World War II. Since then, many of its military factories have been re-fitted and re-tooled to make other products, such as trucks.
With a strong industrial background, Chongqing is the third largest automotive manufacturing centre in China. You can’t tell by the little presence of motorcycles in hilly Chongqing, but it is the third biggest manufacturing hub for these bikes in the country.
Chongqing is also a key transport node for West China, being the only key city in this region to be located along the Yangtze River.
Both cities are not complete strangers to Singapore investors. Companies here have pumped money into commercial schools, real estate and transport and logistics business in Chongqing.
OCBC Bank opened its first branch in the city last year. APL has shifted its regional administration centre in China from Shanghai to Chongqing. Somerset, an arm of the Ascott Group, opened a serviced residence there in 2009.
Singapore’s investments in Xian cover a range of industries, including real estate, hospitality, logistics, education and food services. Mapletree Investment’s subsidiary, Xian Yajian Real Estate, is building a retail mall called Vivocity in Xian. Surbana Estates Holdings has teamed up with Hong Kong Henderson Land Development Group to put up a township development that’s due to be completed by 2020.
International Enterprise Singapore, which is pushing Singapore companies to go global, has identified business opportunities for them in these two Chinese cities. For Chongqing: services for the financial industry; supporting services for multinational corporations; education, retail and healthcare services for the expatriate community and affluent locals; urban planning and master planning.
For Xian: real estate developments and infrastructure-related, retail, fashion, food services, potential food sourcing and logistics.
‘Both Chongqing and Xian are showing strong development with GDP growing at 14.9 per cent and 15 per cent respectively,’ Ms. Soh says. ‘Singapore companies need to act fast to capture this window of opportunity quickly.’
But huge business potential comes with huge challenges. Ms. Soh says competition from local firms and MNCs in these two cities is growing.
‘To overcome these, (Singapore) companies can consider acquisitions or joint ventures with local firms as a quick way to gain access to labour, licences and market intelligence,’ Ms. Soh says. ‘Strong partners and good marketing personnel go a long way in growing the business.’
At the same time, it is also important to have experienced local staff who know the local market and have the contacts to help you gear up in the market fast.
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