With a vast territory and distinct cultures, China has diverse business opportunities available. I agree with the opinion of Asialink Business that the vast bulk of business in China is centered on the major cities and economic zones. Cities in the eastern region are the wealthiest and hold the main manufacture hubs, while the low-end manufacture industries are being increasingly moved to the central region. Furthermore, the three most important economic and business regions in China are the Pearl River Delta (involving Guangzhou, Shenzhen and close to Hongkong, a Cantonese speaking region), Yangtze River Delta (involving Shanghai and close to Yiwu) as well as the Bohai Bay region (involving Beijing and Tianjin). Beijing, Shanghai and Guangzhou, the most well-known cities to foreigners and the most representatives, have been the first tier cities in China for decades, and Shenzhen has also managed to enter this tier in recent years.

 

Cultural Regions in China:

 

Which are the cities that have the most foreigners?

The culture and history behind each city contribute to the formation and our understanding of business regions in China.

First of all, Beijing is not only the capital but also the political, cultural and educational center of China. It is where foreign embassies locate, so the diplomatic personnel accounted for a large proportion. By nationality, Koreans are the most populated because of their history of living here since Tang Dynasty and the investment of Korean companies in this city after the opening-up.

Similarly, Shanghai is considered as the center of economy and finance, as well as technological innovation. From my perspective, it is also more internationalized than Beijing in aspects such as modern culture, foreign language education, because it has been at the forefront of opening up due to historical reasons. Most of the foreigners who live in Shanghai are businessmen, after all, the foreign-funded enterprises in the Pudong area are numerous, and the headquarters of many multinational companies are here. By the distribution of foreigners, Japanese take the largest proportion, living their ‘Shanghai dream’.

Seems like the relationship between Guangzhou and foreign countries was formed earlier than other cities. During the Tang Dynasty, Guangzhou Port became the main port of maritime trade already. This may have well explained why it has the global opportunities to attract foreigners. Reported by Gordon Mathews from Quartz Africa in 2017, it is estimated that Guangzhou, a city of 13-14 million people, generally hosted 3.05 million inbound or outbound foreigners in 2014. Traders from South and Southeast Asia, Latin America, Middle East, and Africa come to this global center of manufacture and export goods to their home countries. Africans take the largest number of immigrants here and because of these the city even got a nickname as the “Capital of the Third World”.

Where are the Chinese regions with the best English?

Source of image: EF EPI

English speaking regions in ChinaMost importantly, the cost of labor and the quality of labor skills level should be considered when deciding where to locate your business among those business regions in China. It might be easier to start your business by choosing a place where expatriate group residents and you can find international employees or bilingual employees.

According to Education First’s English Proficiency Index, China ranked at 36th out of 80 countries/regions at their global ranking by English skills this year with a low proficiency grade of 52.45.

As most of us could estimate, Shanghai, Hongkong, and Beijing are in the top of the list of proficiency ranked by regions inside China, followed by Tianjin from the east and Fujian from the south-east region this year. Similar to Hongkong, Taiwan and Macao performed well in the list thanks to their special historical reasons and showed their advantages in internationalization to some extent. Thriving cities such as Nanjing and Hangzhou from the eastern region, Wuhan from the central region, Xi’an from the north-west region, Shenzhen and Guangzhou from the south-east region and Chengdu from the mid-west region also earned relatively good scores.

Nevertheless, It’s interesting to be aware that regions which are the least proficient in English, mostly the Western Region, have the richest natural resources and scenery.

 

Business Regions in China:

 

1+3+7 Free Trade Zones

free-trade-zones-in-chinaSource of image: Market Finder

It’s equally important to consider the availability of professional services and local authority support for foreign business in China, therefore, using a special economic zone is crucial when selecting business regions in China.

Since the establishment of the first China Free Trade Zone in Shanghai in 2013, a series of governmental measures have been implemented to promote the comprehensive deepening of reform and opening up to the outside world, further docking high-standard international trade rules. The Shanghai FTZ, for example, is open to all areas, including the fields of investment, trade, and finance, to promote reform of the entire Chinese economic system.

Following closely with Shanghai, Tianjin Municipality, Fujian province, and Guangdong province established their Free Trade Zones in 2014. Based on the successful experience given by the existing pilot free trade zones, seven more are established in 2016 in Liaoning, Zhejiang, Henan, Hubei, Sichuan and Shaanxi provinces and Chongqing Municipality.

Each of these FTZs has their different focuses in accordance with the instructions given by the State Council. The summary and translation are available to read in the article China Free Trade Zones – Where Are They?.

Chinas Urban Competitiveness

The competition of business in China is much higher in these major cities. Because of this, it is necessary to have a look of the city’s competitiveness to make a good balance while choosing your ideal living as well as business regions in China.

In this June, Chinese Academy of Social Sciences along with Economic Daily has released the Annual Report on Chinas Urban Competitiveness (No.16), in which the comprehensive economic competitiveness of the year of 2017 has been researched among 294 cities and the livability and sustainability have been researched among 289 cities. Shenzhen, Hongkong, Shanghai, Taipei, and Guangzhou continue to hold their places as the most competitive cities as in the year before, followed by Beijing, Tianjin and Suzhou. Nanjing has directly moved up three places to the 9th. Wuhan is the 10th and the only city in the list which is from the central region of China. The rest of the cities are mainly from the Yangtze River Delta, Pearl River Delta, Bohai Rim and Hongkong, Macao and Taiwan Regions

In terms of sustainable development competitiveness, Hongkong, Beijing, Shanghai, Shenzhen, Guangzhou, Hangzhou, Nanjing from the three economic zones remained as the top seven cities successively and have obvious comparative advantages. Some representative cities from mid-west region such as Wuhan and Chengdu have largely increased their sustainable competitiveness. Meanwhile, liability is becoming the primary weight of urban talent competition. Cities from the Yangtze River Delta take six places and four cities from the Pearl River Delta – Hongkong, Guangzhou, Macao, Shenzhen take the rest of the top 10 places for the most livable cities.

 


So, if you are thinking of doing business in China, my suggestion would be considering business regions in China first. There are other facts that you need to be aware of before starting your business in China and I will try to give some helpful tips in MADI blog in the future.