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Business Guide to and

Business Guide to Beijing and Northeast China (Second Edition) (Second China Northeast and Beijing to Guide Business (Second Edition)

HEILONGJIANG

Urumqi IA A. R. Changchun OL UYGHUR A. R. INNER MONGBEIJINGBEIJING HUI A. R. SHAN- DONG

Xi'an JIANG-

TIBET A.R. Nan- jing Lhasa

CHONGQING ZHE- JIANG ZHUANG A. R.

Nanning KONG

HAINAN

Featuring the Provinces of Hebei, , Jilin, Liaoning and Including the Mainland Cities of , Beijing, Changchun, , , Harbin, Jilin, Jinan, Shenyang, Shijiazhuang, , , Tianjin, , and Produced in association with Dezan Shira & Associates

Business Guide to Beijing and Northeast China (Second Edition)

Published by: Briefing Ltd.

All rights reserved. No part of this book may be reproduced, stored in retrieval systems or transmitted in any forms or means, electronic, mechanical, photocopying or otherwise without prior written permission of the publisher. Although our editors, analysts, researchers and other contributors try to make the information as accurate as possible, we accept no responsibility for any financial loss or inconvenience sustained by anyone using this guidebook. The information contained herein, including any expression of opinion, analysis, charting or tables, and statistics has been obtained from or is based upon sources believed to be reliable but is not guaranteed as to accuracy or completeness.

© 2008 Asia Briefing Ltd. Suite 904, 9/F, Wharf T&T Centre, Harbour City 7 Canton Road, Tsimshatsui Kowloon

ISBN 978-988-17560-1-5

China Briefing online: www.china-briefing.com "China Briefing" and logo are registered trademarks of Asia Briefing Ltd. Asia Briefing Ltd is a Dezan Shira China Group company. Dezan Shira & Associates: www.dezshira.com

Business Guide to Beijing and Northeast China | 3 CONTENTS

CHAPTER 1 Setting the scene - Beijing and Northeast China 8 1.1 Historical context ...... 8 1.2 Modern policies and development issues ...... 11 1.3 Economic overview ...... 17

CHAPTER 2 Provinces and cities of Beijing and Northeast China 25 BEIJING ...... 27 HEBEI: Qinhuangdao, Shijiazhuang ...... 35 HEILONGJIANG: Harbin ...... 45 JILIN: Changchun, Jilin ...... 54 LIAONING: Anshan, Dalian, Dandong, Shenyang ...... 64 SHANDONG: Jinan, Qingdao, Weihai, Yantai, Zibo ...... 88 TIANJIN ...... 112

CHAPTER 3

HEILONGJIANG Harbin

Urumqi JILIN Changchun

XINXINJIANG JIANG UYGHUR A. R. Shenyang LIAONING INNER MONGOLIABEIJINGBEIJING A. R. Establishing Business Hohhot GANSU NINGXIA HUI A. R. Yin- HEBEI TIANJIN ShijiazhuangShijiazhuang Yinchuan Taiyuan Jinan Xining SHANXI QINGHAI SHANDONGSHAN- Lanzhou DONG

Xi'an Xi'an Zhengzhou JIANGSUJIANG- 118 SHAANXI HENAN SU TIBET A.R. Hefei Nan- jing SHANGHAI ...... Lhasa SICHUAN ANHUI 3.1 Choosing your China structure 118 HUBEI Chengdu Wuhan Hangzhou ZHE- Nanchang JIANG Changsha HUNAN JIANGXIJIANGXI GUIZHOU FuzhouFuzhou Guiyang FUJIAN Kunming Taiwan YUNNAN GUANGXI GUANGDONG ZHUANG A. R. Guangzhou

Nanning HONG KONG 3.2 Development zones ...... 121 MACAU Haikou 3.3 Regulatory issues ...... 129

CHAPTER 4 Industries 131 4.1 Infrastructure ...... 131 4.2 Energy ...... 136 4.3 Olympics 2008 ...... 140 4.4 IPR ...... 143

CHAPTER 5 148 Future outlook

CHAPTER 6 Directory and reference 150 Basic resources, consulates, business associations, transportation and hotels, exhibition centers

Glossary ...... 180 Further reading ...... 181

Business Guide to Beijing and Northeast China | 5 Business Guide to Beijing and Northeast China PREFACEPREFACE PREFACE The China picture

CHINA - BASIC ECONOMIC INDICATORS 1990 TO 2007 ITEM UNIT 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 Population bn people 1.143 1.211 1.267 1.276 1.284 1.292 1.299 1.308 1.314 1.321 Urban population as % of total % 29.0 39.0 36.2 37.7 39.1 40.5 41.8 43 43.9 44.9 labor force, employed m people 647 681 721 730 737 744 752 758 764 769.9 of which primary sector % 60.1 52 50 50 50 49.1 46.9 44.8 42.6 40.8 secondary sector % 21.4 23 22.5 22.3 21.4 21.6 22.5 23.8 25.2 26.8 tertiary sector % 18.5 24.8 27.5 27.7 28.6 29.3 30.6 31.4 32.2 32.4 Unemployment rate % 2.5 2.9 3.1 3.6 4 4.3 4.2 N/A N/A 4 GDP RMB bn 1,854 5,848 8,947 9,731 10,517 11,690 13,651 18,232 20,941 24,662 of which primary % 27.0 20.5 16.3 15.8 15.3 14.6 15.2 12.4 11.8 11.7 secondary % 41.6 48.8 50.2 50.1 50.4 52.3 53 47.3 48.7 49.2 tertiary % 31.3 30.7 33.4 34.1 34.3 33.1 31.8 40.3 39.5 39.1 Electricity consumption bn kWh 623 1,002 1,231 1,347 1,654 1,911 2,187 N/A 2,825 3,263 Consumer price index change % 3.1 17.1 0.4 0.7 -0.8 1.2 3.9 1.8 1.5 4.8 Exports US$bn 62.1 148.8 249.2 266.1 325.6 438.2 593.4 762 969.1 1,218 Imports US$bn 53.3 132.1 225.1 243.6 295.2 412.6 561.4 660.1 791.6 955.8 Trade balance US$bn 8.8 16.7 24.1 22.5 30.4 25.6 32 101.9 177.5 262.2 Foreign exchange reserves US$bn 30.2 76 168.9 218.7 295.2 412.3 609.9 818.9 1,066.3 1,525.2 contracted FDI US$bn 12.1 103.2 71.1 72 84.8 116.9 156.6 192.6 198.2 N/A FDI actually used US$bn 2.5 37.5 40.7 46.9 52.7 53.5 60.6 63.8 67.1 74.8

“...the reason why the prospect of selling to weaker product demand from the and . Analysts speculate that China’s GDP goods to China provokes queries is because growth will maintain its growth despite global even the slightest modification in the prevailing slowdown until it eases to 8.5 percent by 2012. 16 years of experience. Over 1,700 mode of life is capable of creating an enormous In the coming years, China’s economic growth international clients, with investments in market, and with the entire social structure in will continue despite an impending global more than 80 Chinese cities. Come and visit a state of flux and progress, trade possibilities slowdown. A growth rate for 2009 of 8.5 percent Dezan Shira & Associates at are limitless.” has already been forecast for that year. As exports Advertising Methods in Japan, China and the slow, the county will need to stimulate its www.dezshira.com and find out why we , U.S. Department of Commerce, domestic demand to compensate. Beijing will are at the forefront of the foreign direct 1921 also need to continue developing the central and investment in China today. western regions, areas of the country that have The global excitement with Chinese business lagged far behind the economic powerhouses of opportunities is hardly new, but the phenomenon East and South China. has been gaining fever pitch in the last few years. A This guides aims to supply the most accurate China on the rise is slowly taking its place in the and up-to-date information and statistics, world. The country is on the juncture of leaving however, China is developing fast and this its past and evolving into something by its own information can sometimes be unreliable or accord in the future. difficult to obtain. GDP figures are sometimes In 2007, the country’s GDP grew by 11.4 falsified, provincial statistics often differ from percent to RMB24.662 billion. Sources warn national ones, and added value from new services that escalating inflation may lead to an overheated tends to be overestimated. We have gathered economy. During the year, China’s inflation statistics primarily from Chinese government finished at 6.5 percent. Exports to the world sources including websites, the official media, and increased by 25.7 percent while imports grew other publications. While some of the individual by 20.8 percent. The mainland’s export figures figures may be a bit doubtful, the overall trends increased at its slowest pace since 2002, due partly are pretty clear. Business Guide to Beijing and Northeast China | 7 7 Business Guide to Beijing and Northeast China SETTING THE SCENE – BEIJING and NORTHEAST CHINA 1.1 Historical context

Introduction to Northeast China

The government of the People’s Republic of China considers Northeast China to comprise the five provinces of Liaoning, Heilongjian, Jilin, Hebei and Shandong, and the of Beijing and Tianjin. Bordered by both North and , the history of the area is a blend of diverse nomadic tribes, foreign influence and constant tension with the south. Finally united with the rest of China under the in 1644, was still considered part of the Beijing was named the and Northeast Chinese sphere of influence and many rulers of China soon became the industrial powerhouse of the tried to capture it and unite all the country. of China, but to no avail. The Jurchen overthrew In the 21st century, Northeast China has the in 1115, thus forming the Jin lagged behind the rest of the country’s booming Dynasty which expanded into Northern China economy and the government's attention is and as far as Mongolia. The Song Dynasty once now focusing on helping the area’s economy again attempted to take over the north, but return to its former glory. Campaigns such as the Jurchens proved just as strong as the Liao “Revitalize the Northeast,” established in 2003, Dynasty and continued to protect the north as are encouraging foreign trade in the area and their own. investment in state-owned enterprises. The areas Various other dynasties took control of of Northeast China are now being updated to suit Manchuria until 1644 when the Jurkens, now international business. under the name of the Manchus, rose to power Ancient times and dynasties again to create the Qing Dynasty, officially uniting all of China and moving the capital from Mukden Northeastern China, known as Manchuria, was to Beijing. For over 3,000 years, and numerous largely isolated from until 1644. dynasties, Beijing was named the capital due to The area was initially the homeland of nomadic its valuable geographical location, which meant tribes with Chinese, Russian and Korean roots it was not only an easy city to defend in wartime and control frequently changed hands among but also an important hub for communications a range of ethnically diverse kingdoms. Various between the north and south. With this constant Korean dynasties were in control of Manchuria attention, Beijing was already a flourishing until the Khitan tribe overthrew them to form the trading city before its massive expansion as the Liao Dynasty which lasted from 915 to 1125. The country’s capital during the Qing Dynasty. Song Dynasty controlled mainland China during the same period as the Liao, and the two were in a constant state of warfare and diplomacy. 88 | Business Guide to Beijing and Northeast China SETTING THE SCENE | CHAPTERCHAPTER 1 1 Opening the borders to it was leased and developed by the foreign influence into the modern city called Dalny and connected to the Trans-Siberian Railway. Dalian was also the main battlefield of both the Sino-Japanese war of 1894-95 and Russo-Japanese war of 1905. Finally, after the departure of the Soviets in 1955, China took Dalian back and transformed it into a major shipbuilding center. Coming of age

By the 20th Century, Northeast China was full of culture and promising development that was Much of the early success, and admittedly, widely noticed even on a universal scale. The disruptions and turmoil, of Northeast China collapse of the Qing Dynasty in 1911 plunged would not have evolved had it not been for China into chaos, and warlords from Manchuria significant influence from neighboring countries and Japan quickly took hold of Northern China. such as Russia. An already diverse Northeast China became more influenced by the Russian While China was still unstable and Manchuria Empire when China granted a concession for the even more so, Japan set its sights on potential (connecting the major land for industrial development thus seizing all of Russian city Chita to the of Vladivostok) to Manchuria in 1931. China was able to reclaim the pass through inner Manchuria in 1902. But this North from the Japanese in 1945 only to plunge influence was short-lived as Japan took over after into Civil War soon after. the Russo-Japanese War, when they founded the From 1945 to 1948, Northeast China turned South Manchurian Railway to Port Arthur (now into the base for the Communist People’s Dalian). Both of these railroads not only reduced Liberation Armies for the duration of the Chinese the travel time to their respective but also Civil War, until lead them into and improved the industry by bringing merchandise officially founded the People's Republic of China into Northern China. in October 1, 1949. The Northeast then became Over the years an important source of China's industrial base while the rest of the transportation throughout the Northeast was country's economic growth rode on its success. the ever changing and flooding Grand of China. The passes through four Modern day separate provinces and the northeastern cities of Beijing and Tianjin. The opening of the canal Today, Northeast China has a population of under the in A.D. 610 prompted almost 300 million people, accounting for roughly the important development of Tianjin into the 20 percent of the country's total population. third largest city in China as well as a key trading The major ethnic groups include the , center for the north. With developing ports such , Huis and . Northeast as Tianjin growing stronger this also brought China’s industries account for one-third of the about increased foreign influence and trade. country's GDP – this includes major sectors Consequently, Tianjin and the large port city of such as steel, automobile, shipbuilding, aircraft Dalian were constantly switching hands between and petroleum refining. The the Russians and Japanese throughout the 19th capital city Beijing, located in the Northeast, is and 20th centuries. the second largest city in China next to Shanghai Between 1858 and 1895, Dalian was run by the and is considered the political, educational and British, Chinese, and then the Japanese. In 1898, cultural center of the country. Beijing Capital

BEIJING and NORTHEAST CHINA Business Guide to Beijing and Northeast China | 9 - SETTING THE SCENE 9 International Airport is the busiest airport in northern region and launched the Revitalize the China: in 2007 it served 53.7 million passengers Northeast campaign in 2003. This campaign and received 399,986 airplanes. The airport is focuses on industrial diversification, further state- expected to become one of the world's top five sector reform and encouragement of the stunted busiest airports by the end of 2009. Tianjin, the private sector. So far Beijing has spent US$7.5 third most populated city in China and one of billion on restoring the region, privatizing or the largest ports, lies only 120 kilometers away closing old state-owned factories while retraining from Beijing. workers for industries such as computer assembly, But the Northeast’s economy consists of more software engineering and even tourism. Presently, than just large cities such as Beijing and Tianjin. there is virtually no limit imposed on the amount With the government encouraging more investors of shareholdings that foreign investors may to go northeast and large investments in the acquire in the region. road network, second-tier cities are becoming In recent years, Northeast China has begun industrial hotspots. Metro systems are being to slowly regain the economic prosperity it built in Shenyang and big name manufacturing once enjoyed. It has begun to recover and move brands such as BMW, Coca Cola and Toshiba forward. Key cities like Dalian, Tianjin and have invested in the city. Dalian not only boasts Beijing, not to mention smaller up and coming of the biggest petroleum port in China, but is areas like Qingdao and Shijiazhuang have been also a new modern and educated city. Qingdao booming and the construction that went along city consistently ranks high for quality of life with the recent Olympic Games in Beijing also and its large port makes it not only a top tourist helped matters. More so, excitement for the destination but also a thriving industrial spot. following Beijing Olympics should help attract The Northeast was one of the earliest regions more interest in the region. in China to industrialize due to its abundance in Even while factoring in a slowdown due to and easy access to many ports and railways. global economic issues, the region is still expected Even after the founding of People’s Republic of to deliver sustainable growth rates of between 8- China, Northeast China still continued to be a nine percent annually for the foreseeable future. major industrial base. But recently the industry based economy has started to wane in comparison to the surging economies of the and the areas. From 1980 to 2000, the Northeast began to suffer from the decay of state industries with nearly a quarter of the 30-40 million laid off workers coming from state-owned enterprises. Following the massive infrastructure spending project in 2000 called Develop the West, the government focused its attention on the suffering A Chinese 10 Ruble banknote from Soviet-influenced times

10 | Business Guide to Beijing and Northeast China About Dezan Shira & Associates

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, and Vietnam as well as liaison offices in Italy and the United States. Dezan Shira & Associates’ experienced business professionals are committed to improving the understanding and transparency of investing in emerging Asia.

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About Dezan Shira & Associates: Scan this QR code with your smart phone to visit: www.dezshira.com/offices.html Business Guide to Beijing and Northeast China

The China Briefing Business Guide to Beijing and Northeast China is the definitive guide to the region, providing thorough and in-depth analysis, regional intelligence and overviews of the provinces and cities in northern China, including a directory and reference guide to the region’s many resources: government ministries, development zones, embassies and consulates, business associations, and major hotels. This book is part of a series that also includes guides to Shanghai and the Yangtze River Delta, South China and the Greater Pearl River Delta, , and West China.

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Published by Asia Briefing Ltd. All rights reserved. © 2008 Asia Briefing Ltd. Suite 904, 9/F, Wharf T&T Centre, Harbour City 7 Canton Road, Tsimshatsui Kowloon HONG KONG China Briefing online: www.china-briefing.com “China Briefing” and logo are registered trademarks of Asia Briefing Ltd. Asia Briefing Ltd. is a Dezan Shira China Group company Dezan Shira & Associates: www.dezshira.com