Foshan is a leading city in the PRD in terms of economic growth, economy size and overall strength. In 2003, the city's GDP reached Rmb138.1 billion (US$16.6 billion), with per capita GDP amounting to Rmb40,000 (or US$4,900, based on the number of residents with domicile registration). Foshan's economy accounts for 1/90 of the national economy and 1/10 of Guangdong's respectively.

Traditionally, Foshan has been famous for its textiles, ceramics, foundry and pharmaceuticals industries. The city is known as "Guangdong's Yarn Centre", "Ceramics Capital of the South" and "Hometown of Medicine in Lingnan".

Excellent Investment Environment

Unparallelled geographic location: As Foshan lies adjacent to Guangzhou, the infrastructure facilities of the two cities are inter-connected to form a convenient, extensive and modern transportation network. Downtown Foshan is within one hour's drive from the three transport hubs of Guangzhou, namely the new Baiyun Airport, Nansha port, and Guangzhou Railway Station. It only takes 35 minutes to travel from Foshan to the Guangzhou International Airport via highway. The port of Nansha is the largest sea freight and logistics centre in southern China where plans are under way to build another 50 large, deep-water berths. Foshan's Shunde district is about 30 minutes' drive from the port. Moreover, construction of the inter-city underground railway system between Foshan and Guangzhou, the first of its kind in China, has already begun. Upon its scheduled completion in 2006, the two cities will only be 40 minutes apart.

Huge market demand: Foshan is one the wealthiest cities in the PRD. At the end of 2003, the total savings of its residents amounted to Rmb178.4 billion (US$21.5 billion), ranking among the highest in the country. The Guangzhou-Foshan city cluster is flanked by towns such as Shunde, Sanshui, Gaoming, Nanhai, Zengcheng and Panyu, as well as numerous satellite cities. Geographically speaking, Guangzhou is in fact merged with Foshan. With a combined land area of 11,181 sqm, the two cities make up 37.5% of the PRD total. Their urban population of 12.337 million represents 42% of the region's total. Their level of urbanisation stands at 80.7%, which is nine percentage points higher than the region's average. In 2000, the GDP of the Guangzhou-Foshan city cluster topped Rmb333.31 billion, accounting for 40% of the PRD total and 35% of the provincial total. Its industrial output value and total retail sales amounted to Rmb514.88 billion and Rmb145.87 billion, making up 30% and 36% of the provincial total respectively.

Well-developed Infrastructure Facilities

1. Convenient transport links. Sea, land and air transport networks are well developed in Foshan. The city lies at the intersection of the Guangzhou-Foshan, Foshan-Kaiping, and Guangzhou-Sanshui highways. The Guangzhou-Sanshui and Sanshui-Maoming railways also run across Foshan while passenger through train service connects the city with Hong Kong directly. Foshan is served by five customs checkpoints and 17 foreign trade ports of which four are passenger terminals and 11 are container terminals offering several daily passenger and freight sailings to Hong Kong. In a move to reduce investment cost and improve the environment for further development, Foshan has cancelled 28 road and bridge toll stations in the city. It has also earmarked Rmb36 billion for the construction of an extensive transport network linking up all districts of the city. The network covers five north-south highways, nine east-west highways, and two ringed highways.
   
   
2. Sufficient energy supply. In terms of power generation, with a total installed capacity of 2.4315 million kw, Foshan has sufficient energy supply. However, to cope with industrial development needs, the city will invest Rmb17.7 billion in constructing a number of electricity transmission and transformation projects, and another Rmb9.9 billion in building various electricity supply projects with a combined installed capacity of 2.028 million kw. Also being planned is the LNG natural gas network project which is scheduled for completion by 2005 upon connecting with the natural gas supply over land from Shenzhen. By 2010, all districts of Foshan will have access to the LNG pipeline network.
   
   
3. Advanced communications sector. In 2003, the overall informatisation index of Foshan reached 73%, which was among the highest in the country. During the year, the fixed-line telephone numbers used in all districts were upgraded to eight-digit. Over the next three years, the city will invest Rmb13.5 billion to further enhance its information infrastructure facilities, network systems, and computer information processing capability.
   
   
4. Industrial parks with special characteristics. Foshan has 10 industrial parks and development zones all of which are backed by excellent supporting facilities with different strengths and emphases. Their development priorities are as follows: Foshan State-level New- and High-Tech Development Zone: digital optics, pharmaceuticals and biotechnology, and new materials technology. Chancheng New- and High-Tech Development Zone: non-ferrous metals processing, ceramics, auto parts and accessories, textiles, and household electrical appliances. Nanhai Technology Industrial Park of the Foshan New- and High-Tech Development Zone: electronic information, bioscience, biomedicine, precision machinery, new building materials, environmental protection industries, and auto parts and accessories. Nanhai Software Park (one of Guangdong's four leading software parks): new- and high-tech industries such as software, electronic information, biomedicine, and related industries. Nanhai National Eco-Industry Demonstration Park and South China Environmental Protection Industry Park (approved by State Environmental Protection Administration and the only state-level industrial park of its kind in Guangdong): environmental protection equipment and materials manufacturing, green products manufacturing, and recycling. Shunde Technology Industrial Park of the Foshan New- and High-Tech Development Zone: new- and high-tech industries such as intelligent household electrical appliances, electronic information, auto parts and accessories, chemical coatings, pharmaceuticals and healthcare related industries. Sanshui Central Science and Technology Industrial Park: food and beverage, metallic materials processing, plastic products, electronics and electrical appliances, and auto parts and accessories. Sanshui Datang Industrial Zone: textiles and garment, refined chemicals, furniture, electronics and electrical appliances. Gaoming Cangjiang Industrial Park: organic high-molecular materials, special ceramic materials, coatings and special chemicals, high-performance metallic materials, non-ferrous metals, household electrical appliances, plastic products, refined chemicals, and machine building.

Leading Manufacturing Base of China

Manufacturing is the leading economic activity in Foshan, thanks to its strong industrial foundation. In 2003, the industrial output value of Foshan rose by 23.2% year-on-year to Rmb329.725 billion (US$39.726 billion). The city's 10 niche industries are household electrical appliances, opto-electromechanical products, electronic information and apparatus manufacturing, ceramics and other building materials, textiles and garment, metallic materials processing, plastic products, chemicals and pharmaceuticals, food and beverage, and household products manufacturing. Together, the 10 industries form the core of Foshan¡¦s industrial sector, accounting for 80% of the city's total industrial output value. Many of the enterprises in the city are financially very strong and are leaders in their respective sectors. Both the traditional and high-tech industries have been growing rapidly in Foshan. Today, a new- and high-tech industrial cluster has taken shape in the city with electronic information, digital optics, green household electrical appliances, biotechnology and new materials as the leading players.

As the largest production base for household electrical appliances in China, Foshan's household electrical appliances output accounts for 15% of the national total. In terms of product category, Foshan is the largest producer of microwave ovens and electric fans in the country. Its annual output of 13 million cameras accounts for 15% of the world total. Its annual output of construction ceramics is worth Rmb13.6 billion, or 32% of the national total, while that of aluminium alloy and stainless steel makes up a 40% share.

Meanwhile, prospects for the auto parts and accessories sector are bright. Toyota, Nissan and Honda, the three leading Japanese auto makers, have established their presence in Guangzhou. Their annual output of automobiles is estimated to top 1 million over the next few years, which calls for greater support by auto parts and accessories manufacturers. Lying adjacent to Guangzhou and well served by convenient transport links, Foshan is within one hour's drive from the three leading car assembly bases in Guangzhou and, as such, an ideal investment spot for the auto parts and accessories sector. Thanks to its unparallelled geographic location, relatively low investment cost and excellent government service, Foshan has attracted a number of the world¡¦s top 500 companies such as Toyota and Honda of Japan, BASF of Germany as well as other multinational companies to invest in its auto parts and accessories sector. To date, a great number of auto parts and accessories manufacturing enterprises have been established in the city producing car engine fuel injection systems, exhaust pipes, spokes and various other items.

Foshan has developed a comprehensive industrial system with certain leading sectors and enterprises as the core and supported by a large number of small- and medium-sized enterprises (SMEs). Foshan's industrial sector is characterised by a large cluster of upstream and downstream industries and strong supporting capability. Leveraging on the niche industries, a great number of specialised wholesale markets have emerged in Foshan in recent years, many of which rank among the largest in the country. These include markets for ceramics, stainless steel, children¡¦s wear and knitwear in Chancheng district; markets for fabrics, motorcycles, non-ferrous metals, hardware and underwear in Nanhai district; and markets for furniture, woodworking machinery, flowers, plastics, and iron and steel in Shunde district. Through these specialised markets, Foshan¡¦s niche products have extended their reach to the whole PRD and across the country.

Furthermore, a number of trade shows held in Foshan represent the highest industry standard in China today. These include the Foshan Ceramics Expo, China Furniture Expo in Shunde, Flower Expo, and China Shunde International Household Appliances Exhibition.

As far as industrial development directions are concerned, according to the concept plan for Foshan's urban development, the city will be positioned as "a modern city with well developed manufacturing industries and unique Lingnan culture".

According to the industrial development plan of Foshan, the city's GDP is projected to reach Rmb169 billion by 2005, or Rmb52.1 billion more than the Rmb116.9 estimated in 2002; and per capita GDP is forecast to increase to Rmb48,290 (US$5,920) by 2005, nearly 40% higher than the Rmb35,000 estimated in 2002. By 2010, GDP is expected to increase by 2.5 times over 2003 to top Rmb291 billion, and per capita GDP by 2.36 times to reach Rmb79,100 (US$9,530).

The city also proposed to develop a cluster of new- and high-tech industries with electronic information as the core and supported by new materials, opto-electromechanical products and environmental protection industries. Development priority will be given to industries such as digital optic products, large-screen high-resolution colour cathode ray tube, digital AV equipment, electronic parts and components, electronic communications equipment, computer and accessories, optic fibre cables, and software. The four industry pillars, namely household electrical appliances, textiles and garment, ceramics and other building materials, and metallic materials processing and metal products, will also be further developed.

Moreover, food and beverage, plastic products, refined chemicals and pharmaceuticals, and houseware have been designated as having good development potential and will be further promoted. Meanwhile, Guangdong has designated Foshan, Guangzhou and Shenzhen as the three key production bases for various types of machinery and equipment. The development priorities for Foshan include electricity transmission, transformation and distribution equipment, electrical equipment, metal processing machinery, general equipment, ceramics machinery, plastics machinery, packaging machinery, moulds, heavy-duty trucks, and motorcycles.

Foshan also offers enormous opportunities in the logistics sector. Modern logistics are considered a driver of growth for the city's services sector. Foshan plans to build nine cargo yards, to be located in the northern, southern and eastern parts of the city, and Xiqiao, Dali, Huangqi, Rongqi, Sanshui and Gaoming. Development priority will be given to build a number of facilities, namely the Sanshan International Logistics Park, a logistics industrial belt centred around Chancheng district, and three logistics centres at the Shunde New- and High-Tech Development Zone, Sanshui Industrial Park and Gaoming Cangjiang Industrial Park respectively.

Hot Spot for International Investment

Multinationals have been flocking to Foshan to set up operations. International investors have always preferred to invest their money in competitive places. Home to more than 6,000 foreign-invested enterprises (FIEs) with a total investment of over US$13 billion, Foshan ranks among the top mainland destinations with the highest concentration of foreign direct investment. The majority of the FIEs have achieved the expected returns on their investment in Foshan.

Twenty of the world¡¦s top 500 companies have established 21 investment projects in Foshan. These include: DuPont and Tyco of the US; Northern Telecom of Canada; Siemens, Bosch, BASF and Hochest of Germany; Arcelor and Total of France; Shell of the Netherlands; Toyota, Matsushita, Toshiba, Sanyo, Sumitomo, Honda, Itochu and Nissho Iwai of Japan; and Samsung and Pohang of South Korea. Other world renowned companies that have investment in Foshan include: Thomson of France; Tetra Pak of Sweden; Piaggio of Italy; Alpharma, Mattel and PGI of the US; Teijin, Tamron and Otsuka of Japan; Premier and Mitac of Taiwan; and Esquel of Hong Kong.

Among these, Thomson of France, Osram of Germany, Tamron of Japan and Premier of Taiwan have set up their product technology R&D centre in Foshan.

Foshan-Hong Kong Cooperation under CEPA

CEPA generates new opportunities for closer economic and trade cooperation between Foshan and Hong Kong and the two cities are set to become more integrated economically. Lying 64 nautical miles from Hong Kong and 80 km from Macau, Foshan is well placed to leverage on the advantages of these two neighbours such as market experience and status as world city to quicken its own pace of convergence with the international market.

Foshan is going to step up cooperation with Hong Kong to capitalise on the latter¡¦s advantages as international trading, financial, shipping and logistics centre. Hong Kong and Macau companies in sectors such as finance, logistics, convention and exhibition, intermediary services, tourism, commerce and retail, and real estate services are welcomed to operate in Foshan. Such cooperation will bring about complementarity in industrial development and functionality among the three cities and speed up the process of regional economic integration and urbanisation, paving the way for further integration with the Greater PRD region.

Against the background of regional coordination in the PRD, Foshan is actively embracing the "Shenzhen-Hong Kong, Guangzhou-Foshan, Zhuhai-Macau" regional framework. Among these, Guangzhou-Foshan regional cooperation emphasises complementary development and plays a pivotal role in integrating the PRD region and boosting its overall competitiveness.