Hangzhou, provincial capital of Zhejiang Province, is one of the major political, economic and cultural centers of East China. Hangzhou has a historical reputation for its literary works, tea, jade, ceramics and many other cultural relics. In addition to its picturesque landscapes and cultural heritage, Hangzhou has also established industries in information technology, software development, telecommunications, electronics and others.
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Primary industry (percentage of GDP): RMB 25,510 million (3.3 percent)
Secondary industry (percentage of GDP): RMB 357,260 million (45.8 percent)
Tertiary industry (percentage of GDP): RMB 397,430 million (50.9 percent)
Total: RMB 780,200 million
Total retail sales of consumer goods: RMB 294,462,660 million
Total value of imports and exports: USD 61,683,240 million
Fixed investment: RMB 372,275,440 million
Source: China 2013 Statistical Yearbook (uses 2012 statistics)
Minimum monthly wage: RMB 1,470
Minimum hourly wage: RMB 12
Avg. annual wage of staff and workers: RMB 42,493
Sources: Local Labor Bureau and Social Insurance Bureau (2013)
The Hangzhou Urban Economic Circle - a joint initiative ratified in 2011 for economic development between four cities in Zhejiang Province - is poised to improve transportation infrastructure in the region, including new public bus lines, a trans-city express railway system, and a restructuring plan for the Grand Canal to facilitate waste transportation.
The Hangzhou Bay Bridge, one of the world’s longest sea bridges, is a 36-kilometer trans-oceanic bridge linking Ningbo’s Cixi country in the south to Jiaxing in the North. The bridge, which has six lanes and a designed lifespan of 100 years, opened in May 2008 and has shortened the distance between Shanghai and the port city of Ningbo by 120 kilometers. Stretching across the Hangzhou Bay rather than encircling its perimeters, ships are still able to pass beneath. Hangzhou is now connected to all of the surrounding cities by an extensive network of expressways. These have reduced the driving time to Shanghai to two hours, and all of the major cities in the Yangtze River Delta are no further than four to five hours drive away– it is a complete transportation network which covers an area of 120 million people.
Hangzhou is an important rail transportation hub of East China. Shanghai-Hangzhou, Zhejiang-Jiangxi, Xiaoshan-Ningbo, and Xuanchen-Hangzhou railways intersect in the city.
Hangzhou Xiaoshan International Airport, the busiest airport in Zhejiang Province, has more than 90 international passenger and freight airlines every week flying to East Asian countries and territories. It also has daily flights linking it to major hubs in Europe such as Germany and the Netherlands.
Ports & Waterways
Hangzhou has its own small river port and it is in reasonable proximity to Shanghai and Ningbo’s seaports. The Beijing-Hangzhou Grand Canal and the Qiantang River are also in close proximity.
Hangzhou is the political, economic, and cultural center of Zhejiang Provence and accounts for nearly a quarter of provincial economic output. Local investors attribute their choice of Hangzhou to various factors including lower office set up costs than Shanghai or Beijing, competitive government tax incentives, and a strong network of local IT companies. Hangzhou realized a GDP of RMB 780 billion in 2012 with GDP per capita rising to RMB 89,697. The city has a good investment and business environment and is particularly attractive for the high-tech and advanced manufacturing industries.
Hangzhou’s industries have traditionally been textiles, silk, and machinery, but electronics, food processing, and other light industries have also been developing rapidly since 1992. Alibaba, China’s online behemoth, and Wahaha, the nation's largest beverage company, both have their headquarters in Hangzhou. Hangzhou’s silk industry has a very long history and the quality of its silk products is among the finest in China.
Forbes Magazine rated Hangzhou as having the best business environment in China in 2010 thanks to its high living standards, well-developed infrastructure, and business-friendly regulations. Hangzhou was ranked second by Forbes in 2012. Although the city does not attract heavy industry, it is home to a growing light manufacturing sector, which focuses on textiles and small machinery.
The Hangzhou Bay area is the most important IT industry base in Zhejiang Province and is home to 70 percent of the province’s electronic enterprises, 80 percent of the IT product manufacturers, and 90 percent of the software development companies. Almost all of the microelectronics and mobile-telecommunications industries are centered in this district. Major IT and electronics companies, such as IBM, Toshiba, and Siemens, have set up business in one of the three major development zones. The Hangzhou Bay area is becoming one of the most important IT bases in the world.
For companies investing in Hangzhou, there is a solid educational system and an abundance of human resources. There are six higher education districts in the city and 37 higher educational institutions.
The Xiasha Higher Education Park, located in the Hangzhou Economic and Technology Development Area, covers an area of 10.91 square kilometers and includes 15 higher education colleges. Some of the key subjects include electronic information engineering, computer science and technology, and manufacturing and automation.
Hangzhou Economic Development Area (HEDA)
Foreign investment and domestic industry is flourishing east of the city center in the 104.7 square kilometer Hangzhou Economic Development Area (HEDA). Established in 1993, HEDA regularly ranks in the top 10 development zones for investment environment. The area also includes an export-processing zone. The GDP of the zone grew by 10.79 percent in 2010 and reached RMB 35.99 billion, accounting for 6.1 percent of Hangzhou’s GDP. The zone attracted investment from 65 Fortune 500 enterprises by the end of 2010.
The development zone currently incorporates an export-oriented manufacturing park and a higher learning park. Electronic information, biological medicine, machinery and household appliances, and food and beverages represent the four main industries in the park. Located within the park are several multinational and locally-based corporations. The zone is also one of the largest production bases for mobile telecommunications equipment in China. Japanese electronics makers, such as Mitsubishi, Toshiba, and Matsushita have relocated many of their operations to this manufacturing park. One key advantage of setting up business in the area is the education and training resources available in the city. Indeed, right next to HEDA, there is a “university town” with several universities, colleges and institutes including the state-level Hangzhou institute of Electrical Engineering and the Zhejiang University of Science.
Hangzhou High-Tech Industry Development Zone (HHTZ)
Hangzhou HHTZ has become one of the most influential hi-tech innovation and hi-tech industry bases in Zhejiang Province. Today, HHTZ hosts more than 1,100 software developers and BPO enterprises. Major companies such as Motorola, Nokia and Siemens have established R&D centers in the zone. In 2011, the GDP of the zone rose by 13.1 percent, amounting to RMB 41.63 billion. This accounted for 5.9 percent of Hangzhou’s total GDP. Hangzhou HHTZ positions itself as the “Silicon Valley” of China. The Alibaba Group, which runs various online marketplaces and is China's largest website in terms of market value, is headquartered in the zone.
Xiaoshan Economic & Technological Development Zone (XETZ)
The State Council approved XETZ as a state-level development zone in 1993. At present there are over 910 enterprises (most of them private) from 30 countries and regions in the zone. In 2011 Xiaoshan achieved a GDP of RMB 144 billion and a GDP per capita of USD 18,631, placing its overall economic strength first amongst all districts, counties, and county-level cities in Zhejiang province, and seventh in China. The utilized FDI in 2011 was USD 420 million, with Japanese companies being strongly represented in the zone. The zone's key focus areas are automation, new materials, and energy. The preferred industries are auto and auto-parts,advanced equipment manufacturing industry, new energy, new materials, electronic information, and biomedicine.