Where can i visit in hangzhou
Investing in Hangzhou, Zhejiang Province: China City Spotlight
We share reasons why foreign companies should consider investing in Hangzhou, a leading industrial, technology and digital economy hub in China's Yangtze River Delta.
Hangzhou, the capital of Zhejiang Province, has become known around the world since the G20 summit was held in 2016. With lower costs of establishment than Shanghai, competitive government tax incentives, and a strong network of local IT companies, Hangzhou is a city that is very attractive to investors.
As one of the wealthiest cities in the Yangtze River Delta, located on the Hangzhou Bay between Shanghai and Ningbo, Hangzhou's GDP accounts for almost 25 percent of the total economic output of Zhejiang Province. Both Alibaba, China's e-commerce and tech giant, and Wahaha, the country's largest beverage company, are headquartered in Hangzhou.
Hangzhou’s economic profile
In 2020, Hangzhou achieved a GDP of RMB 1,610.6 billion (about US $ 245 billion). For comparison: That roughly corresponds to the economic strength of the Czech Republic or Portugal. Hangzhou is also one of the top three cities in the Yangtze River Delta region in terms of GDP, alongside Shanghai and Suzhou.
Hangzhou is located in the most affluent region of eastern China and has a per capita GDP of over 22,000 US dollars, which, according to the World Bank, is comparable to the level of high-income countries. In 2020, the total retail sales of consumer goods in Hangzhou reached RMB 597.3 billion (about US $ 91 billion), which is the third highest value among cities in the Yangtze River Delta after Shanghai and Suzhou.
Foreign trade and investment
In 2020, Hangzhou saw significant growth in foreign trade. Imports and exports totaled RMB 593.4 billion (about US $ 90 billion), up 5.9 percent. Exports contributed RMB 369.3 billion (approx. US $ 56 billion) to an increase of 2.1 percent, while imports contributed RMB 224.1 billion (approx. US $ 34 billion) to an increase of 12.9 percent.
Hangzhou's exports to the Belt and Road Initiative countries totaled RMB 117 billion (about US $ 18 billion) - an increase of 31.7 percent. Exports to the USA and 28 EU countries rose by 5.7 percent and 8.5 percent, respectively. Service exports totaled US $ 13.8 billion - an increase of 10.8 percent.
As an e-commerce hub, Hangzhou's imports and exports from cross-border e-commerce alone amounted to RMB 108.4 billion (about US $ 16.5 billion), an increase of 13.9 percent and about 18 percent of all commerce in the city.
The city made good use of foreign capital, attracting 804 projects with foreign participation, 98 of which had a total investment of more than $ 30 million. Hangzhou's actual foreign investment drawdown was $ 7.2 billion, an increase of 17.5 percent. By the end of 2020, Hangzhou had received 2,019 foreign-invested projects from 222 Fortune 500 companies.
According to data from the Chinese Ministry of Commerce, actual foreign capital employed in Hangzhou accounts for more than 45 percent of the capital in Zhejiang Province.
Investing in Hangzhou: digital economy growth, high-tech industries
Hangzhou's digital economy is the largest contributor to its overall economy. In 2020, the value added of the core digital industries was RMB 429 billion ($ 65.5 billion), up 13.3 percent and accounting for 26.6 percent of total GDP, an increase of 24.7 percent .
Growth in related sectors such as electronic information product manufacturing, software and information services, digital content, and robotics were 14.7 percent, 12.9 percent, 12.7 percent and 12.3 percent, respectively.
Hangzhou's tech industry owes its birth to Chinese e-commerce giant Alibaba, which owns e-commerce websites Taobao and Tmall, as well as digital financial services giant Ant Group, which owns Alipay, and cloud computing company Aliyun.
Leading Chinese IT companies based in Hangzhou, such as Aliyun, Hikvision, Dahua Technology and Uniview, have significant market share in global markets. Hikvision and Dahua Technology are among the Chinese high-tech companies that have been sanctioned and blacklisted by the US amid the intensifying US-China technology rivalry.
As a city known for its high-tech sector, the Hangzhou government is actively promoting its smart city program. Alibaba and 13 other companies are working with the local government on public-private partnerships (PPP) to create smart service systems for the city.
- Hangzhou on Palm, the world's largest smart app-based public bicycle system, has 38,000 bicycles stationed at over 2,500 docking points.
- The “Hangzhou City Brain”, powered by the Alibaba Group, aims to build “a network”, “a cloud”, “a database” and “a data center” that can handle over 7.6 million API calls (Application Programming Interface) and processed 120 million collaborative data to provide Hangzhou solutions for digitizing the management of large cities.
Where to locate your investment: Hangzhou's development zones
Hangzhou now has nine development zones at the state level and four at the provincial level. The Hangzhou High-Tech Development Zone (Binjiang) and the Hangzhou Economic and Technological Development Zone are among the front runners in the extensive ranking of the national high-tech zones and the annual evaluation of the national economic development zones.
The Hangzhou High-Tech Industry Development Zone is home to over two-thirds of the city's technology companies. Well-known investors in this zone include Alibaba, Microsoft, IBM, Nokia, Panasonic and Mitsubishi.
In April 2019, the Qiantang New Area was founded in Hangzhou, which comprises the Hangzhou Dajiangdong Industry Cluster Zone and the Hangzhou Economic and Technological Development Area.
With the aim of becoming a world-class industrial hub for intelligent manufacturing, the Qiantang New Area has attracted major brands such as Pfizer, Bayer, Geely and Gree from various advanced manufacturing industries - including semiconductors, life and health, new materials, aerospace as well intelligent automobiles and intelligent plants.
Another important development zone is the Yuhang Future Science and Technology City. On April 28, 2020, Yuhang Future Science and Technology City opened its first live streaming e-commerce base to promote e-commerce in Hangzhou.
To encourage businesses to set up in Hangzhou and its development zones, the local government is offering tax breaks for high-tech firms and additional incentives for internet start-ups, including housing subsidies for entrepreneurs and events to encourage private and overseas investment to support start-ups ups.
For more information regarding investing in Hangzhou or access to preferential arrangements offered by the local government, please contact us at [email protected]
China Briefing is written and published by Dezan Shira & Associates. Dezan Shira & Associates has been supporting foreign investors in China since 1992 with offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen and Hong Kong. For business inquiries in China, please contact us at [email protected] or visit us at dezshira.com.
We also have offices in Vietnam, Indonesia, Singapore, the Philippines, Malaysia, Thailand, the United States, Germany and Italy to advise foreign investors in addition to our offices in India and Russia and our trade research facilities under the Belt & Road Initiative.
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