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September 29, 2015

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Home » City specials » Hangzhou

Summit shows what Hangzhou has to offer

By Ji Xiang | September 29, 2015, Tuesday | Print Edition

THE ambitious plans of Hangzhou, in east China’s Zhejiang Province, to become a major economic power were on full view at the third annual China Global Investment Summit: Hangzhou.

This high-level event took place on September 22 and 23 and attracted more than 500 global business leaders, economists and foreign investors; as well as representatives from 50 Fortune 500 companies.

The summit, which was co-sponsored by the publication Euromoney, was intended to give foreign investors a better view of Hangzhou’s business environment. It also gathered together local business leaders and government officials from the rest of Zhejiang Province to share their opinions on the future of the region’s economic development.

A total of 15 investment agreements, worth a combined US$2.17 billion, were reached during the event. These deals covered key industries such as equipment manufacturing, financial service and cross-border e-commerce. Roughly half of these funds will come from foreign investors.

Attendees at the summit were treated to a series of seminars as well as visits to local factories and company sites, offering a direct view of the advantages Hangzhou can offer foreign investors. Tours also took summit attendees to suburban business areas, such as Yuhang Shannan Fund Town, West Lake Cloud Town and Yuhang Dream Town.

The event was also an occasion to demonstrate Hangzhou’s strengths in terms of openness, internationalization, policy support and business vitality. The city’s achievements in these regards can be seen in the host of honors and accolades heaped on it over the years, as well as its impressive record of economic results.

Hangzhou, already the recipient of the UN’s Best Residential Prize, also ranked No. 1 on Euromoney’s list of China’s best cities, a list unveiled at the summit. This survey was based on a combination of executive statements and quantitative data.

Home to the well-known West Lake, Hangzhou has previously been named the Best Tourist City by China National Tourism Administration and World Tourism Organization.

The city’s coastal location near several major water bodies also makes it a hub for trade and transportation. Hangzhou offers easy access to the Yangtze River, Hangzhou Bay and the Beijing-Hangzhou Grand Canal. Looking ahead, local officials say the new free-trade zone in Shanghai is also expected to benefit Hangzhou.

Hangzhou currently boasts one of the strongest economies in the country. In 2014, the city’s GDP was reported at 920.12 billion yuan (US$144.33 billion), up 8.2 percent from the previous year. Total financial income reached 192 billion yuan last year, up 10.7 percent year-on-year. During the same period, investment in fixed assets reached 495.27 billion yuan, up 16.2 percent.

Amid such results, investment in the local service sector — which officials see as a key engine for economic growth amid efforts to reform China’s economy — also increased over 20 percent in 2014.

Widely known as the home of e-commerce heavyweight Alibaba, Hangzhou’s economic potential is further underscored by the strengths of its private enterprises. According to Liang Liming, vice governor of Zhejiang, the value of output from the province’s private enterprises has been the highest in the Chinese mainland for more than a decade. Liang also explained at the summit that Zhejiang is home to 123 of the 500 best private companies on the Chinese mainland.

These and other factors have lead to a surge of foreign investment in Hangzhou and the rest of Zhejiang.

By the end of 2014, more than 12,400 foreign-funded companies — with some US$137 billion in combined capital — were registered in Hangzhou, Gao Guofei, director of Hangzhou Commerce Commission, said at a symposium for foreign company heads the day before the start of the summit.

Also by the end of last year, 34 Fortune 500 companies had one or more investment projects in Hangzhou, according to Gao. Meanwhile, of the 408 foreign-funded businesses that registered with local authorities in 2014, 20 held investments in excess of US$100 million each.

Speaking at the same symposium, Hangzhou Vice Mayor Xie Shuangcheng explained that despite recent signs of slowdown in the broader Chinese economy, Hangzhou’s growth picture remains positive. In the first six months, in fact, the local economy expanded by 10.3 percent year on year, second only to Shenzhen among cities on the Chinese mainland. E-business and high-tech manufacturing growth was a major factor behind the strong performance.

Local authorities say they are as eager to roll out new measures to support investors in Hangzhou. Gao said local authorities organize regular seminars and salons where city mayors and company representatives can share their thoughts and confront problems encountered by foreign-funded companies. More than 300 companies have already benefited from these meetings, according to Gao.

Gao mentioned several other initiatives taken by local authorities to improve service and the city’s business environment, including advising small- and medium-sized companies on how to secure foreign funds. Looking ahead, Gao added that regulators will provide foreign investors with consulting, market-research and human-resource assistance. Officials will also use the media to spread the successes of foreign-invested companies in Hangzhou to raise public awareness about contributions made by overseas investors.

Xie said the Hangzhou government will focus on drawing more foreign funds into the manufacturing sector, where foreign expertise will be helpful in upgrading the structure of the local economy.

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