|Market Profiles on Chinese Cities and Provinces|
Major Economic Indicators
Notes: 1 In real terms 2 For all state-owned enterprises and other forms with annual sales over RMB 5 million
Beijing is the capital of China and the country's political, cultural and international exchange center. Beijing is one of the four autonomous municipalities along with Shanghai, Tianjin and Chongqing, which enjoys similar economic and administrative autonomy as a province.
The private sector in Beijing has developed rapidly. By the end of 2007, there were about 337 thousands of private enterprises, increased by 123% from just 151 thousands in 2002.
Beijing's service sector accounted for 72.1% of the city's GDP in 2007. Financial services, whole-sale trade and retail trade, information technology services were the three biggest sectors, composing 13.8%, 9.4%, and 9.2% of the GDP respectively. Financial services also recorded the fastest growth of 22.3% in 2007.
Composition of GDP (%)
Source: Beijing Statistical Yearbook 2005, 2008
According to Beijing's 11th Five-year programme, Beijing will push the development of modern services sectors, including the development of services outsourcing, cultural and creative industries. Beijing is one of the eleven services outsourcing bases in China. Beijing has also adopted a cultural and creative industry development programme, projecting the industry to grow by an average of 15% per annum during the 11th Five-year programme. The share of cultural and creative industry in the city's GDP is projected to increase from 10.3% in 2006 to 12% in 2010.
Beijing's industrial production is dominated by heavy industries and large enterprises. In 2007, heavy industries accounted for 84.4% of Beijing's gross industrial output and large enterprises accounted for 76.3% of the output. Major industries include telecommunications equipment, transportation equipment, chemicals, machinery, metallurgy and food making.
Output Share of Leading Industry Groups (2007)
Source: Beijing Statistical Yearbook 2008
Beijing is keen to develop hi-tech industries such as electronics, information technology, biological engineering, pharmaceutical and new materials. In 2007, gross added value of hi-tech industry amounted to RMB72.5 billion, representing 7.8% of Beijing's GDP.
In 2007, Beijing's total R&D expenditure amounted to RMB52.7 billion, accounting for 5.6% of its GDP.
Beijing is trying to build a Chinese Silicon Valley and in this connection, Zhongguancun, the famous High and New Technology Development Zone has been set up in 1988 to attract investment in science and technology. In 2007, total income of the Zhongguancun High and New Technology Development Zone reached RMB 903.6 billion, up 34.0% from 2006. By the end of 2007, there were 22,969 enterprises operating in Zhongguancun, employing nearly 0.9 million people.
Beijing's strengths in human capital and scientific research have helped its development of hi-tech industry. Beijing has the largest number and the most prestigious institutions of higher education and scientific research in the country. There are 79 institutions of higher education (including the Beijing University and Tsinghua University). At the end of 2007, there were 351 scientific research institutions employing 93,265 scientists and engineers.
Tourism is also an important industry in Beijing. The city has been the capital of China since the Yuan Dynasty. Its tourist attractions feature its rich palatial heritages. In 2007, the tourist market received 4.4 million overseas tourists, bringing foreign exchange revenue of US$4.6 billion; 143 million local tourists were received, bringing revenue of RMB175 billion.
Beijing exports grew by 28.9% to US$48.9 billion in 2007. Hong Kong was the third largest overseas market, following the US and Japan. Major exports included mechanical and electronical products, garments and electric appliance and electronic products. Beijing's imports grew by 19.9% to US$144 billion in 2007. Japan is the leading source of imports, followed by the US and Russia.
In 2007, Hong Kong was Beijing's fourth largest trading partner. In 2007, Beijing exported US$3,510 million to Hong Kong and imported US$1,599 million from Hong Kong.
Among the world's largest 500 enterprises, more than 185 have invested in Beijing. And over 40 of MNCs, such as NEC, SUN, P&G and Schlumberger, have set up R&D center and production facilities in Development Areas in Beijing.
Inflow of foreign direct investment recorded faster growth in recent years. In 2007, the utilized amount of FDI increased by 10.9% to US$5.1 billion.
FDI in Beijing
Source: Beijing Statistical Yearbook, 2008
The utilized amount of FDI in the service sector increased by 89.6% and accounted for about 80.6% of the total utilised FDI in Beijing in 2007. Areas that attracted the largest share of foreign investment included real estate, leasing & commercial services and manufacturing. Utilized FDI in the real estate grew markedly by 65.4% in 2007.
Hong Kong was the largest source of overseas investment in Beijing in 2007. Hong Kong investors signed 612 contracts. Larger investment projects are concentrated in the property sector. In recent years, Hong Kong investors have invested in the renewal of old cities. Hong Kong property developers such as Sun Hung Kai and Kerry Group have invested in reconstruction projects of old building located in Xidan and Wangfujing. Besides, Hong Kong developers (including Sun Hung Kai, Cheung Kong and New World) have engaged in developing shopping centers, as well as commercial and residential complexes.
Other major investors came from Virgin Islands, Cayman Islands, Japan, Korea, the US and Singapore.
Since 1996, Beijing has given priorities to attract overseas funds for infrastructure development, industrial restructuring, urban renewal, hi-tech industries and service industries. In the coming years, priority areas for foreign investment will be in the modernization of old enterprises and hi-tech industries, as well as the development of the service sector, including such areas as export promotion, infrastructure development, finance, education, and land development.
Purchasing power is strong in Beijing. In terms of per capita disposable income of urban residents, Beijing reached RMB 21,989 in 2007, which was up by 13.9% from 2006. Huge consumption demand from both the local residents and tourists has made Beijing one of the biggest consumer markets in China. Total retail sales in Beijing reached RMB380 billion in 2007.
Composition of Per Capita Expenditure of Urban Household (%)
Source: Beijing Statistical Yearbook, 2005, 2008
Beijing's three traditional shopping districts --- Wangfujing, Xidan and Qianmen are well known in the country. In more recent years, due to development of the different ring roads, new shopping and commercial districts have developed at or outside the third ring such as the Chaoyang District and Haidian District.
Attracted by the size and potential of the consumer market, new department stores and shopping complexes mushroomed in the past few years. Retail outlets such as supermarkets, convenient stores, and warehouse clubs have also developed rapidly. Discount store outlet, such as Dia, also entered into the market.
In recent years, foreign invested chain super markets such as Carrefour, Makro, Ito Yokado, etc. emerged. The operation of foreign invested enterprises has stimulated the development of other local chain stores and supermarket type of retail groups such as Hualian and Gome.