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China is the third biggest country in the world by landmass and with 1.4 billion inhabitants it is the most populous country in the world. It is an easy mistake to see China as a homogeneous market, however economically, culturally and administratively it is as different as Europe can be. It is important to have a general understanding of these differences. 

Cities 

The regional development of China's economy is distributed unevenly, during the ‘opening up’ period in the 80's and 90's China first opened its economies in the coastal cities in the east of the country. The Easten part of the country is also where more than 90 percent of the population is situated, this mostly due to natural conditions. Chinese cities are divided into different levels (tier1, tier2, etc.). First-tier cities have highly developed economies such as Beijing, Shanghai, Guangzhou, and Shenzhen. Second-tier cities are often the more upcoming provincial capitals like Chengdu, Wuhan, Nanjing and Hangzhou. Cities of different levels have their advantages and disadvantages. For example, first-tier cities have the perfect infrastructure, good economic foundation, and a large number of talents, but higher business costs and competition. Second-tier cities are less developed than first-tier cities, but they also have lower labor and business costs and strong government support. China has six megacities with an urban population of more than 10 million, 14 cities with a population between three and five million and 93 cities with more than a million. 

Industrial clusters 

There are three main industrial clusters in China located in different regions with their own characteristics and specialties. The first one is the Beijing-Tianjin-Tangshan Industrial Base (a triangular area with Beijing, Tianjin, and Tangshan as its apex) has industries such as iron and steel, machinery, chemical industry, electronics, and textile. It is the second-largest comprehensive industrial base in China. It is also the largest comprehensive industrial base in the north. The second one is the industrial base of the Yangtze River Delta (the triangular area with Shanghai, Nanjing, and Hangzhou as its apex) is the largest comprehensive industrial base in China, with both light and heavy industries extremely developed; It is a comprehensive industrial base with the longest history, the largest scale, the most complete structure, the highest technical level, and the highest economic benefits. The third one is the Industrial base of the pearl river delta (including Guangzhou, Shenzhen, Zhuhai, Dongguan, Foshan, Zhongshan, Huizhou, and a series of industrial cities), which is dominated by light industries such as clothing, electronics, toys, and food. In total China has identified 19 super regions. For a complete overview have a look at the China Briefing website

Economic developments zones   

There are many economic developments zones in China, where provides tax reduction and exemption (such as double exemption and three halving's of enterprise income tax), industrial land, and other preferential policies for the encouraging projects of foreign direct investment enterprises, to attract all kinds of funds and entities to invest in setting up factories and companies. As of September 2020, China had 21 free trade zones where the member states that sign the free trade agreement and completely cancel the tariff and quantity restriction in the commodity trade with each other, so that the commodity can flow freely among the member states. 

In China, due to past policy support, natural conditions, and economic foundation, the coastal economy is more developed than the inland economy. However, at present, the Chinese government has increased its support policies for the development of the inland economy and paid more attention to the balance between inland economy and coastal economy, one of the most representative movements is the China Western Development campaign. 

Overall, China is a huge market that won't be covered from a single location. Identify where the main industrial clusters relevant for you are. Look at your potential client and partner base and focus on one region first, before expending to new areas. 

 

Partners

RVO

RVO facilitates entrepreneurship, improve collaborations, strengthen positions and help realize national and international ambitions with funding, networking, know-how and compliance with laws and regulations.

www.rvo.nl

Embassy Beijing

The Dutch embassy in Beijing tracks the most promising sectors for Dutch businesses in China.

www.zakendoeninchina.org

Contact information

Phone:
0629496439

E-mail:
r.kuppens@brainportdevelopment.nl

Ronnie Kuppens

Project manager China