Market Profiles on Chinese Cities and Provinces
Email ThisRate ThisPrint Friendly

11.2008

Yangtze River Delta

General Background

The Yangtze River Delta (YRD) metropolitan region refers to 16 cities in Shanghai, southern Jiangsu, eastern and northern Zhejiang, including Shanghai, Nanjing, Suzhou, Wuxi, Changzhou, Yangzhou, Zhenjiang, Nantong, Taizhou, Hangzhou, Ningbo, Huzhou, Jiaxing, Shaoxing, Zhoushan and Taizhou, of which Taizhou was being included as part of the YRD metropolitan region starting from August 2003.

Although the YRD only covers an area of 110,915 sq.km which is about 1.1% of China's total land area, its GDP reached RMB4,686 billion in 2007, or 18.8% of the whole China economy. The YRD is an important economic powerhouse of the Chinese mainland, with Shanghai being China's financial and logistics center, and Zhejiang and Jiangsu an increasingly important manufacturing base. The YRD's total population stood at 93.9 million at the end of 2007, accounting for 7% of China's total.

Economic Performance and Policy

The YRD's economic performance in 2007:

  • GDP amounted to RMB4,686 billion or 18.8% of China's overall economy.
  • GDP growth reached 15.3% in real terms.
  • GDP per capita was RMB47,513, compared to about RMB18,934 for China as a whole.
  • Retail sales amounted to RMB1,443 billion, 16.2% of China's total.
  • Industrial output reached RMB9,837 billion, 24.3% of China's total.
  • Exports amounted to US$451 billion, 36.9% of China's total.
  • Actual foreign investment amounted to US$36.9 billion, 49.3% of China's total.

Major Economic Indicators (2007)

Cities

Land Area
(sq. km)

Popula-
tion
(mn)

GDP
(RMB bn)

GDP Growth(%)

Per Capita GDP(RMB)

Industrial Output(RMB bn)

Retail Sales
(RMB bn)

Exports(US$ bn)

Actual FDI
(US$ bn)

YRD Total

110,115

93.9

4,686.3

15.3

47,513

9,836.7

1442.6

450.7

36.9

Shanghai

6,341

18.6

1,218.9

14.3

66,367

2,310.9

384.8

143.9

7.9

Hangzhou

16,596

6.7

410.0

14.6

52,590

835.1

129.6

30.0

2.8

Ningbo

9,816

5.6

343.5

14.8

50,474

778.9

103.5

38.2

2.5

Jiaxing

3,915

3.4

158.5

14.4

38,357

333.8

50.1

11.7

1.7

Huzhou

5,818

2.6

89.2

15.0

32,047

176.1

31.9

3.7

0.8

Shaoxing

8,256

4.4

197.2

14.3

43,442

486.9

51.5

13.8

1.1

Zhoushan

1,440

1.0

40.9

17.0

39,605

48.6

13.2

2.4

0.1

Taizhou

9,411

5.7

172.3

14.5

30,105

274.1

59.6

9.4

0.3

Nanjing

6,582

7.4

328.4

15.7

53,638

578.8

138.0

20.6

2.0

Wuxi

4,788

6.0

385.9

15.3

83,923

894.0

113.5

29.3

2.8

Changzhou

4,385

4.4

188.1

15.6

52,841

425.4

61.1

9.8

1.8

Suzhou

8,488

8.8

570.1

16.0

91,911

1,590.9

125.0

118.9

7.2

Nantong

8,001

7.2

211.2

16.2

27,500

402.9

73.7

9.0

3.1

Yangzhou

6,634

4.5

131.2

15.7

28,585

259.1

41.9

3.3

0.9

Zhenjiang

3,847

3.0

120.7

15.5

44,894

214.5

33.1

3.7

1.1

Taizhou

5,797

4.6

120.2

15.7

23,933

226.7

32.1

3.0

0.8

Note: a) GDP per capita of the YRD is calculated based on the GDP and population figures in this table.
b) Industrial output of industrial enterprises with an annual sales income of over RMB 5 million.
Source: Statistical Yearbooks of Shanghai, Jiangsu and Zhejiang, 2008

The YRD・s long-term economic policy focuses include:

  • To strengthen regional economic integration of YRD cities, mainly in six areas, including transportation networks, unified market, environmental protection, information sharing, financial cooperation and flows of talents.
  • To jointly build the inter-provincial tourism area in the delta region. The cities will work together in promoting regional tourism brands, integrating tourism resources.
  • According to the preliminary YRD Regional Development Programme, the region will develop into an economic centre with the strongest integrated competitiveness.

Industries

The YRD・s manufacturing industries are developing rapidly, partly as a result of the influx of foreign investment. Cities that have relatively large industrial production include Shanghai, Suzhou, Wuxi, Hangzhou, Ningbo and Nanjing. The YRD・s total industrial output amounted to RMB9,837 billion in 2007, accounting for about 24.3% of China's total. 

While the Pearl River Delta excels in the assembly of light consumer goods, the YRD is more focused on heavy industries such as machinery, chemicals and other upstream industries, i.e. the production of raw materials, intermediate goods and capital goods including electronic parts, textile and chemical fibre etc. For example, in terms of volume, Shanghai and Jiangsu together accounted for more than 70% of the national total output of micro-computers; Jiangsu and Zhejiang together accounted for 69% of China's total output of chemical fiber in 2007. Within the YRD region, while Jiangsu and Zhejiang are major producers of garment, textile, chemical fiber, and machinery, Shanghai also produces a relatively large share of chemicals, machinery and motor vehicles. Shanghai alone produced 17% of China's total output of cars in 2007.

Major industries of the YRD and their shares in China・s industrial output (2007)             (%)

Industries

Shanghai

Jiangsu

Zhejiang

Textile industry

1.9

23.0

22.4

Garments & other fibre products

5.7

22.5

17.3

Raw chemical materials and chemical products

6.1

19.3

8.0

Chemical fibre

2.6

31.4

37.2

Smelting and pressing of ferrous metals

4.8

15.3

3.4

General purpose machinery

10.3

18.0

14.0

Special purpose equipment

5.7

13.5

8.3

Transport equipment

8.7

9.0

7.9

Electrical machinery & equipment

6.5

16.7

12.8

Telecommunication equipment, computers and other electronic equipment

12.7

20.9

4.6

Source: Statistical Yearbooks of China, Shanghai, Jiangsu and Zhejiang 2008

The YRD's private sector is the most developed in China. Many indigenous private enterprises in the YRD have developed strong brand names in their specialised areas and become market leaders in China. These include Youngor, Shanshan, and Romon.

Foreign Trade

The YRD is an important export base in China. From 2001 to 2007, YRD's exports rose by an average of 38.7% per annum to US$451 billion in 2007, which accounted for 36.9% of China's total exports. Major export items included machinery, transportation equipment, electrical equipment and parts, garments, textile and raw materials. Major export markets included US, EU, Japan, Hong Kong and South Korea.

From 2001 to 2007, YRD's imports grew by an average of 29% per annum to US$327 billion in 2007. As a manufacturing base, major imports of the YRD included raw materials, chemical products, electrical equipment, and parts and components.  Major import sources included EU, Japan, US, Taiwan, South Korea and Hong Kong.

Foreign Investment

FDI inflow amounted to US$36.9 billion in 2007, over 49% of China's total.  Hong Kong is the leading source of FDI in the YRD.  Other major investors include Taiwan, Japan, Singapore, US and South Korea.

There are over 80,000 foreign-invested companies in Shanghai, Zhejiang and Jiangsu. Major foreign companies in the YRD include General Motors, Shell, Matsushita, Exxon, Siemens, Sony, Volvo and LG etc.  Foreign investment is more concentrated in Shanghai, Suzhou, Wuxi, Nantong, Ningbo and Hangzhou.  In 2007, these six cities accounted for over 71.3% of the region's FDI.

Foreign investment in the YRD is mainly engaged in the manufacturing sector, such as the manufacture of computers, mechanical and electrical products, hardware and chemical products etc. Relocation of high-tech industries to the YRD is particularly prominent. In particular, many Taiwan businesses have shifted their high-tech products manufacturing to the YRD region in recent years. Taiwan's high-tech investment is concentrated in Kunshan, Suzhou, and Wuxi, of which many of these companies are engaged in IT products and high-tech electronics such as PCs, semiconductors, integrated circuits, digital cameras and LCD monitors etc.

Consumer Market

The YRD is one of the mainland's largest and most sophisticated consumer markets. The relatively high income level in the YRD, combined with a large inflow of tourists, resulted in strong consumer demand. Its combined population of 93.9 million contributed to total retail sales of RMB1,443 billion in 2007, which was about 16.2% of China's total.

The consumption pattern in the YRD is also moving towards services.  The relative share of urban household expenditure on items like transportation and communications, education, cultural and recreation services have increased in the expense of items like food and household articles.  The trend for rising expenditure on new types of durable goods, such as cars and computers, is also salient.

% Share of Per Capita Consumption Expenditures of Urban Household

Shanghai

Jiangsu

Zhejiang

2000

 2007

2000

2007

2000

2007

Food

44.5

35.5

41.1

36.7

39.2

34.7

Clothing

6.4

7.7

9.2

9.2

8.1

10.0

Household articles

7.7

5.5

10.7

6.6

9.4

4.7

Medicine & medical services

5.6

5.0

5.5

6.4

7.7

6.1

Transportation & communications

8.6

18.3

7.4

12.2

8.9

17.6

Recreation & education & cultural services

14.5

15.4

12.6

15.9

13.1

15.3

Residence

9.0

8.2

8.2

9.5

8.5

8.3

Source: Statistical Yearbooks of Shanghai, Jiangsu and Zhejiang, 2001, 2008

Besides a huge consumer market, the YRD also has major distribution hubs. Besides  Shanghai which has strong influence on product and brand promotions in the entire Chinese consumer market, there are major wholesale marts within or close to the YRD, such as the wholesale marts of small commodities in Yiwu and textiles in Shaoxing.

The YRD's retail sector is highly developed. Major foreign-invested retail enterprises that have presence in the YRD include Carrefour from France, Metro from Germany, Yaohan from Japan, Park・N shop from Hong Kong, and Trust-Mart from Taiwan.  The retail distribution landscape in the YRD is also changing rapidly.  Apart from traditional department stores, various forms of modern operation such as chain stores, supermarkets, hypermarkets, warehouse type markets and convenience stores are prolific.

Infrastructure Investment

YRD's transport infrastructure is highly developed. As at the end of 2007, total length of expressways in Shanghai, Jiangsu and Zhejiang totalled 6,844 km, accounting for 12.7% of China's total. In 2007, total passenger and freight traffic of Shanghai, Jiangsu and Zhejiang accounted for 17.3% and 16.4% respectively of the national total. 

One of the YRD's long-term policies is to integrate its transportation network construction. In the YRD, large-scale infrastructure projects, such as the Shanghai's Pudong International Airport and the Yangshan Deep Water Port, were launched under the coordination of the Central government.

Airport density in the YRD is among the highest in the world. As one of the largest airports in China, Shanghai's Pudong International Airport, with the third runway opened in 2008, can handle about 36.5 million travellers a year. It is estimated that visitor arrivals will amount to 70 million person-times in Shanghai during the World Expo period in 2010. To deal with the influx of visitors, the Pudong International Airport will be expanded.

The YRD is also an important gateway for waterway transportation. In 2007, out of the top ten ports in China in terms of containers throughput, two of them are located in the YRD, namely the Shanghai and Ningbo-Zhoushan ports. The port at Shanghai is the largest container port in China, handling over 492.3 million tons of freight in 2007, an increase of 4.7% from 2006. Ningbo-Zhoushan port, ranked as the fourth largest in China, handled 473.4 million tons of freight in 2007, an increase of over 11.6% from 2006.

Highway transportation is the main transportation mode within the YRD region. For example, in 2007, highways accounted for 96% of Jiangsu's total passenger traffic and 67% of total freight traffic. A network of highways linking all cities in the YRD is being constructed to shorten travelling times among different cities within the delta, giving rise to a "metropolitan region within three-hour drive".