The Yangtze River Delta - Yangzhou

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Doing business in China is not only about being in Beijing, Shanghai or Guangzhou, throughout 2008 we are featuring second- and third-tier cities in China that are beginning to see increased foreign investment. Each month, we will feature one city from each of the five regions of China. These overviews are compiled by our staff on the ground and can be found in their full format in the 2008 China Briefing Regional Business Guide series.

Other information concerning China’s cities can be obtained from the City Guide section of the China Expat website at www.chinaexpat.com.

Until the 19th century, Yangzhou acted as a major national trade center and a transport hub due to its location at the junction of the Yangtze, the Grand Canal and the Huaihe River. This historical period had left Yangzhou a large number of treasures including valuable architectures and arts, luminous culture and celebrities. Though its economy started to go into decline in the 1850s, in the past two decades growth has recovered significantly, and today Yangzhou is recognized as one of Jiangsu’s strongest economies.

Infrastructure
Yangzhou will become one of eight cities connected by a light rail line that is being built along the Yangtze, together with Nanjing, Zhenjiang, Changzhou, Wuxi, Suzhou, Taizhou and Nantong. The Nanjing-Yangzhou section of the Nanjing-Qidong railway started running in 2004, although the line is not yet at full capacity. It is three to four hours from Yangzhou to Shanghai by rail and there are close connections to major cities in China. There are two railway stations; in the north (freight) and south (passengers) of the city.

The Yangzhou section of the Beijing-Hangzhou Grand Canal is 143 kilometers long and allows the passage of 1,000 dwt of ships all year round. Yangzhou Port is rapidly developing to become one of the key ports on the Yangtze River.

Yangzhou has no airport of its own. Lukou Airport in Nanjing can be reached by car in about one hour and 45 minutes, while Shanghai’s two airports can be reached in two hours and 45 minutes.

Economy and investment climate
Yangzhou’s GDP grew 15.6 percent in 2007, reaching a total of RMB131.1 billion. The city’s GDP per capita was a reasonable RMB29,400.

Yangzhou’s pillar industries include automobiles, shipbuilding, chemicals, chemical fibers, electrical appliances, machinery, electronics and IT. The local government is predicting that these sectors will achieve a combined industrial output value of RMB332 billion by 2010.

Yangzhou attracted utilized FDI of US$1.15 billion in 2007, increasing 50.5 percent year-on-year. The city's foreign trade volume in 2007 stood at US$4.46 billion, a 36.5 percent increase year-on-year, of which exports accounted for US$3.25 billion. The city’s principle export items are machinery and electronics products.

Leading companies include Siemens, which has signed a contract with Jiangsu Beide Electrical Machinery Corp to establish a motor production joint venture; Yangzhou Rongtai Industrial Development Co, known for making aluminum and magnesium die castings for the automobile, motorcycle, home appliance, telecoms and construction industries; Yangzhou Yaxing Motor Coach, a Shanghai-listed bus manufacturer; Baosheng Group, China’s leading producer of wire, cable and other electrical parts; and EMS, the world’s biggest manufacturer of metal compound materials. Baosheng, the state-owned enterprise, has supplied electrical cables to the Olympic Stadium, Beijing Capital Airport's Terminal 3, the new CCTV building and the National Theater. In 2006, Baosheng was named to the list of “the 500 strongest enterprises in China’s manufacturing industry.” EMS invested US$20 million investment to establish a production base in Yangzhou’s Baoying County. The base will be EMS’s sole manufacturing facility in Asia, and will serve its Asian and European markets.

Colgate is another company that has set up a base in Yangzhou. The toothpaste giant moved to Yangzhou in 2000. One reason Colgate selected Yangzhou as a mainland base is the convenience of the surrounding transportation networks, including railway lines, the Runyang Bridge, and the Xibei Expressway. Yangzhou produces 80 percent of China’s toothbrushes and has the biggest toothbrush factory in the world.

Development zone and port
Established in 1992, Yangzhou Economic Development Zone is located in the southwestern suburbs of the city and has a planned area of 72 square kilometers, of which an initial eight square kilometers has been developed. Yangzhou also plays host to the Yangzhou Port. According to the current five-year plan (2006-2010), the port will invest a total of RMB900

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million to improve its infrastructure, with the long term aim of becoming part of the network of feeder ports for Shanghai Yangshan Bonded Terminals.

Fast facts

second largest transhipment port for lumber on the Yangtze after Zhangjiagang
produces 80 percent of China’s toothbrushes
with the canal now partially restored, Yangzhou is once again becoming an important transportation and market center

For assistance with investment or inquiries about Yangzhou please contact shanghai@dezshira.com.

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