Market Profiles on Chinese Cities and Provinces
Email ThisRate ThisPrint Friendly

12.2008

HANGZHOU CITY

Major Economic Indicators

Economic Indicators

2007

Jan - Aug 2008

Value

Growth
(%, y-o-y)

Value

Growth
(%, y-o-y)

Gross Domestic Product (RMB bn)

410.0

14.6 1

215.9 3

12.4 1

Per Capita GDP (RMB)

61,258

13.6 1

Added Value Output
- primary industry (RMB bn)

16.3

2.2 1

7.6 3

-0.5 1

- secondary industry (RMB bn)

205.7

14.3 1

110.8 3

12.2 1

- tertiary industry (RMB bn)

188.0

16.2 1

97.5 3

13.8 1

Value-added Industrial Output 2 (RMB bn)

835.1

19.7 1

105.4

15.2 1

Fixed-assets Investment (RMB bn)

168.4

15.3

73.4 3

24.1

Retail Sales (RMB bn)

129.6

14.0

101.1

20.1

Inflation (Consumer Price Index, %)

3.5

6.6

Exports (US$ bn)

30.0

14.3

22.7

14.8

Imports (US$ bn)

13.5

6.2

10.2

16.6

Utilized Foreign Direct Investment (US$ mn)

2,802

24.3

2,017 3

30.3


Notes: 1 In RMB real terms 2 For enterprises with annual sales over RMB 5 million 3 First half of 2008
Sources: Statistical yearbook of Hangzhou 2008

General Background

Hangzhou is the capital of Zhejiang province. It lies 180 km on the southwest of Shanghai and covers a total area of 16,596 sq. km. As at end-2007, Hangzhou had a population of 7.9 million.

Hangzhou is the largest economy in terms of GDP in Zhejiang in 2007. From 2000 through 2007, its economy enjoy an average annual grow rate of 13.7%. Its GDP, retail sales and utilised FDI accounted for 21.8%, 20.8% and 26.9% of the province's total. Per capita GDP reached RMB 61,258, the highest among all cities in Zhejiang province. There were 109,900 private enterprises in the city in 2007, employing over 25% of the city's workforce.

In its 11th Five Year Programme, Hangzhou would like to see its economy to grow by an average rate of 11% per annum. While the share of services in GDP is going to increase to 47%, Hangzhou also has plan to develop its new and high technology industries such as telecommunications equipment, software, integrated circuit design, digital TV, Internet and information services and animation etc; and to further expand its heavy industries such as automobiles, equipment manufacturing and chemical and petrochemical industries. In light industries, the focus is on textiles, food processing and building materials.

Industries

Hangzhou has a strong manufacturing sector, but its services sector is also growing fast in recent years.

Hangzhou is the largest industrial center in Zhejiang province. Its added-value industrial output rose by 19.7% to RMB 835 billion in 2007. Well-known brands and products of Hangzhou include 21vita (health supplement produced by Minsheng Pharma), Nongfu Spring, Wahaha, Dandy, You Can, Paradise Umbrella etc.

Composition of GDP (%)

1995

2007

Primary

9.1

4.0

Secondary

53.8

50.2

Tertiary

37.1

45.8

Source: Statistical Yearbook of Hangzhou

Leading Industries and Services 2007

Leading Industries

% share of gross industrial output

Textile

10.3

Telecommunication equipment, computers and other electronic equipment

9.6

Transport equipment manufacturing

7.1

Ordinary machinery

6.9

Chemical fibre

6.9

Raw chemical materials and chemical products

5.9

Leading Services

% share of GDP

Transport, storage and post

2.9

Wholesale and retail trade

9.8

Banking

7.6

Real estate

6.5

Scientific research, technical service and geological prospecting

1.7

Sources: Statistical Yearbook of Hangzhou 2008

Boosted by its textile and silk industries, Hangzhou has developed a strong garment industry and is named the "city of women's wear". Hangzhou government has been putting a lot of effort to establish Hangzhou as a national design, manufacturing and trading center for women's wear.

In 2006, Hangzhou was the 4th largest software development centre in terms of sales revenue, after Beijing, Shenzhen and Shanghai. The city is also eager to develop into a "capital of animation".

Tourism

Being the "heaven on earth", Hangzhou attracts many tourists every year. In 2007, it received 41 million (+10.8%) domestic tourists with the tourism receipts of RMB54.9 billion (+16.6%) and 2.1 million (+16.7%) overseas tourists with foreign exchange income of US$1,119 million (+23.1%).

Foreign Trade

Hangzhou's total exports and imports amounted to US$43.4 billion in 2007. Major exports items included electronics, high-tech products, garment and clothing accessories, textiles, silk, etc. Major exports markets were the US, Japan, Germany, the UK, and Hong Kong.

Foreign Investment

FDI in Hangzhou

1979-2007

No. of contracts

8,999

Contracted amount (US$ bn)

28.9

Utilised amount (US$ bn)

13.8

Sources: Statistical Yearbook of Hangzhou 2008

Although the majority of foreign investment goes to the manufacturing sector, foreign investment in Hangzhou has also entered into various service industries such as retail and wholesale, transport and infrastructure, real estate development and tourism etc. In 2007, contracted and utilised FDI grew by 3.7% and 24.3% respectively.

Major sources of foreign investment in Hangzhou include Hong Kong, the US and Singapore etc. 58 world's largest 500 enterprises have invested in Hangzhou. Famous multinational corporations in Hangzhou include the American General Motors, Merck, Motorola, UT Starcom etc; the European Nokia, Bosch, Siemens, Liquid-Air and Shell; and the Japanese Toyota, JAL, Panasonic, Mitsubishi and Toshiba, and Samsung from Korea etc.

Contracted FDI by Sources

Cumulative to 2007 (US$ mn)

% share

Hong Kong

12,767

44.3

USA

2,770

9.6

Japan

1,477

5.1

Taiwan

1,446

5.0

Singapore

963

3.3

Sources: Statistical Yearbook of Hangzhou 2008

Consumer Market

Hangzhou has a robust retail market. In 2007, Hangzhou's total retail sales of consumer goods increased by 14% to RMB 129.6 billion, the largest among all cities in the Zhejiang province.

In light of the development of private and foreign enterprises, per capita urban disposable income reached RMB21,689 (+14.0%) in 2007. Consumer durables like air conditioners, colour TVs, fridges and cooking appliances, telephones and mobile phones are now very common among Hangzhou urban households.

Among various types of retail outlets, chain stores are developing at a fast pace in recent years. Major chain stores in Hangzhou include Lianhua, Hualian, Hymart, Carrefour, Metro, Lotus and Trustmart etc. The cluster of wealthy consumers in the city has given rise to modern department stores and malls like Intime Department Store, Hangzhou Department Store, Hangzhou Jiebai, Yuanhua Plaza, Season Square etc.

Hangzhou is also a key distribution center of consumer products in the region. By the end of 2007, there were 742 commodity markets or wholesale marts, trading different kinds of consumer products and industrial goods. Total transaction of all markets amounted to RMB 231 billion in 2007, an increase of 16.7% over the previous year.

Economic Cooperation between Hong Kong and Hangzhou

Hangzhou's exports to Hong Kong reached US$989 (+4.8%) million in 2007. Hong Kong is the largest investor in Hangzhou. Cumulative to 2007, there have been 3,577 Hong Kong-invested projects in Hangzhou. Hong Kong's investment in Hangzhou was mostly engaged in manufacturing industries such as textiles, garments, electronics, machinery, and chemical products, as well as in real estate development, tourism and infrastructure, etc.

Hong Kong companies that have invested in Hangzhou included Sun Hung Kai Properties, Kerry Group, China Resources, Shui On Group, and High Fashion International, etc. Hong Kong's brand name retailers like Chow Tai Fook, Chow Sang Sang, 3D-GOLD, Baleno, Giordano, Esprit etc. have established presence in the city. Hong Kong's Airport Authority has acquired a minority stake in the Hangzhou Airport, China's 8th largest airport in terms of passenger and cargo throughput and 9th in terms of aircraft movements.

A number of Hangzhou enterprises are listed in Hong Kong. These include Zhejiang Expressway Co. Ltd., China Ting Group and Geely Holding Group (headquartered in Hangzhou), which are listed on the Hong Kong Stock Exchange as H-shares, as well as Zheda Lande Scitech and Sing Lee Software, which are listed in Hong Kong's Growth Enterprise Market.