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October 15, 2014

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Hangzhou emerges as investment spot

By Wu Huixin | October 15, 2014, Wednesday | Print Edition

WITH the launch of a record-breaking IPO in New York by China’s e-commerce giant Alibaba last month, Hangzhou emerged in the spotlight again as the company’s headquarters location, especially after founder Jack Ma said on his social website account that he loves Hangzhou and would never emigrate to another city or country.

In fact, the World Bank says Hangzhou has the best investment environment in the country. Based on 2013 statistics, 105 of the world’s top 500 enterprises have invested in Hangzhou.

Noted enterprises and organizations such as General Electric Company, Cisco Systems Inc, Morgan Stanley, Porsche Automotive Investment GmbH China Branches and global health-care leader Sanofi have successively set their Chinese mainland headquarters and branches in Hangzhou, which reflects the city’s favorable environment for investment.

Porsche Automotive Investment GmbH is the largest European automobile sale and service chain brand, of which the international headquarters is seated in Salzburg, Austria. Its main market covers East and West Europe and it entered the Chinese market in 2005.

Different from Porsche (China) which is a car importer and producer, Porsche Automotive Investment GmbH mainly operates vehicle trade, including brands like Ford, Das Auto, Audi and Peugeot. It also is involved in real estate, automobile leasing and renting, second-hand car sales and insurance.

Started in 2005, the company established Hangzhou Junbaohang Automobile Sale and Service Co Ltd and Hangzhou Jiejun Automobile Sale and Service Co Ltd. In 2012, it set up Hangzhou Baoaijie Automobile Investment Co Ltd, beginning its investment and management business in the form of foreign capital.

“Baoaijie is a vital company to our group, because it was deemed as the headquarters in the Chinese mainland,” says CFO Kerstin Nemeth. “Hangzhou’s economy is always ascending. Being a strong, modern city, its vigorous economic environment brings it great potential.”

In the company’s sales volume of 2013, Hangzhou was listed No. 4 in China, occupying 15 percent of the gross sales volume of Zhejiang Province. The company’s investment in Zhejiang has surpassed 100 million yuan (US$16.27 million) and continues to increase.

Nemeth says the company maintains a good relationship with the Hangzhou government, especially the Binjiang District government, which supports them a lot. She adds that they have benefited from the fine interaction between enterprise and local authorities.

Headquarters in Hangzhou

“The company’s development since 2012 has proved that our decision to set headquarters in Hangzhou was a wise choice,” Nemeth says.

Nemeth herself has been living in Hangzhou for a year. “I prefer living here to other cities in China,” she says.

What impressed Nemeth most is the picturesque West Lake. “It is natural and fantastic. I get close to nature while I walk along it. Hangzhou makes me feel at home.”

Just one year before Porsche Automotive Investment GmbH set up headquarters in Hangzhou, the famous financial organization Morgan Stanley established Morgan Stanley (China) Equity Investment Management Co Ltd in cooperation with Hangzhou Industrial and Commercial Co Ltd.

According to the introduction on the company’s official website, its fund scale is 1.7 billion yuan. While it’s based in Hangzhou, it radiates out to Zhejiang and the whole country. Major investment area includes consumption and retail, advanced manufacturing and medical treatment industries.

“To Morgan Stanley, privately owned enterprises are the main targets to invest in because we consider that they represent the trend of China’s economy, while Zhejiang Province could typify the development of Chinese private-owned companies to some extent,” says General Manager Zhou Xi. “Chinese private companies have created and gathered a large quantity of capital, and we hope to give them back a reasonable and quality investment channel and financing method.”

“Hangzhou has booming privately owned enterprises and local government’s strong policy support. In my view, Hangzhou is one of the cities with the most favorable investment environment. We really rejoice that we have settled in Hangzhou,” says Zhou.

“Though some preferential policies of Hangzhou cannot match Shanghai and Beijing, the Hangzhou government attaches importance to companies and its potential client base is bigger than Shanghai, because it embraces the whole of Zhejiang Province,” says Zhou.

Compared with Morgan Stanley and Porsche, the global health-care leader Sanofi entered Hangzhou much earlier. As the world’s third largest pharmaceutical company, the production of Sanofi (Hangzhou) is believed to be the largest among all of its branches in China.

“When I joined Sanofi in 2002, the annual sales volume was only 200 million yuan, but now it has reached to 7 to 8 billion yuan. The development is closely related with Hangzhou government’s policy support,” says Zhang Ping, one of the managers at Sanofi Hangzhou.

“When our factory moved from Gongshu District to Binjiang District several years ago, local authorities gave us much convenience and officials offered a helping hand. That helped us save a large quantity of cost and time,” Zhang adds.

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