Beyond a Mega City: Investing in China’s Mega City Clusters

BEYONDAMEGACITY:INVESTINGINCHINA’SMEGACITYCLUSTERS1 BeyondaMegaCity:InvestinginChina’sMegaCityClusters ADefinitiveGuidetoChina’sMostInvestor-FriendlyMegalopolises DoingBusinessinChina2023Series VISITUSONFACEBOOK <DezanShira&Associates> <ChinaBriefing> VISITUSONLINKEDIN <DezanShira&Associates> <ChinaBriefing> FOLLOWUSONTWITTER @DezanShira@ChinaBriefing THEDOINGBUSINESSINASIAGUIDESSERIES AvailabletoDownloadNow: DoingBusinessinChinaPortal-LAUNCHEDNOW! •ASEANGuide •ChinaGuide •IndiaGuide •IndonesiaGuide •HongKongGuide •SingaporeGuide •VietnamGuide •DubaiGuide OurlatestonlineDoingBusinessinChinaPortalconsists of100+guides,videos,publications,andtoolsthatarepracticalandeasytonavigate,covering:WhyChina,RegionstoInvest,SectorInsights,HowtoSetup,Tax,AuditandAccounting,HR,Recruitment,PEO,andPayroll,News,Events,andmore. ThisguideintheDoingBusinessinChina2023serieswasproducedbyateamofprofessionalsatDezanShira&Associates,withZhouQianandArendseHuldastechnicaleditors. CreativedesignoftheguidewasprovidedbyNguyenHoangLinh,MiguelEnricoAnciano,andAparajitaZadoo. ©2023DezanShira&Associates Disclaimer Thecontentsofthisguideareforgeneralinformationonly.Foradviceonyourspecificbusiness,pleasecontactaqualifiedprofessionaladvisor.Copyright2023,AsiaBriefingLtd.Noreproduction,copyingortranslationofmaterialswithoutpriorpermissionofthepublisherispermitted. AboutDezanShira&Associates DezanShira&Associatesisapan-Asia,multi-disciplinaryprofessionalservicesfirm,providinglegal,taxandoperationaladvisorytointernationalcorporateinvestors.OperationalthroughoutChina,India,andASEAN,ourmissionistoguideforeigncompaniesthroughAsia’scomplexregulatoryenvironmentandassistthemwithallaspectsofestablishing,maintaining,andgrowingtheirbusinessoperationsintheregion.Withmorethantwodecadesofon-the-groundexperienceandalargeteamoflawyers,taxexperts,andauditors,inadditiontoresearchersandbusinessanalysts,weareyourpartnerforgrowthinAsia. Preface DoingbusinessinChinahasundergonesignificantchangesinthepastfewyears.Whilethecountryhasbeenamagnetforforeigninvestmentoverthelastthreedecadesandisexpectedtoremainsointheforeseeablefuture,businessesoperatinginChinanowencountermountingchallenges.ThesechallengesstemfromtheunevenrecoveryofChina’seconomy,increasinggeopoliticalrisks,andvariousinternalandexternalheadwinds. Giventhis,itisbecomingincreasinglycrucialforexecutivestostayinformed.OnlythosewhoalignwithBeijing’spolicyprioritiesandcannavigateChina’sincreasinglycomplexoperatingenvironmentwillbeabletoidentifyrisksinadvanceandswiftlyseizenewmarketopportunities.Inotherwords,theywillbebetterpositionedtonotonlysurvivebutalsothriveintheworld’ssecond-largesteconomy. Megacityclusters,alsoknownas“megalopolises,”arethethrustofChina’snewurbanizationplansandholdimmensepotentialforforeigninvestment.Thesegeographicalconceptsemergedinthe1980s,followingChina’sreformandopeningup.Inthe14thFiveYearPlanperiod(2021-2025),Chinamadeastrategicdecisiontoprioritizethedevelopmentof19megacityclustersacrossthecountry. Amongthem,fourmegacityclusters—includingtheYangtzeRiverDelta,thePearlRiverDelta(ortheGuangdong-HongKong-MacaoGreaterBayArea),theBeijing-Tianjin-Hebei(orJing-Jin-Ji),andtheChengdu-ChongqingEconomicCircle—areofparamountimportanceandarereceivingspecialattentionfromChinaforimprovement.Thesefourregions,coveringjusteightpercentofChina’sland,contributetoover50percentofthecountry’seconomicoutputandforeigninvestment.Thewell-establishedinfrastructure,industrialsupplychains,andcoordinateddevelopmentstrategyoftheseregionsarecreatingnewinvestmentfrontierswithunparalleledconvenienceandadvantages. BusinesseswithcurrentoperationsinChinaorthoseconsideringexpansionintothisvastmarketarestronglyadvisedtothoroughlyexploreandunderstandthepotentialofthesemegacityclusters.Inthisguide,weofferacomprehensiveintroductiontothefourmegacityclusters,encompassingkeyparameters,suchaseconomicperformance,tradestatistics,leadingindustries,preferentialpolicies,andChina’sdevelopmentalplansforeachregion. CONTACT DezanShira&Associateschina@dezshira.comwww.dezshira.com Wehopethispublicationcanenableforeigninvestorstogainabetterunderstandingofthedynamics,priorities,andtrendsoftheChineseeconomyandtakeadvantageoftheopportunitiespresentedbythenextphaseofChina’surban,industrial,andtechnologicaldevelopment. ALBERTOVETTORETTI ManagingPartnerDezanShira&Associates TableofContents Preface 04 Part1| YangtzeRiverDeltaRegion 7 Economicoverview 10 DevelopmentoftheYRDregion 12 ForeigntradeintheYRDregion 14 LeadingindustriesoftheYRDregion 16 PreferentialpoliciesintheYRDregion 20 InvestinginChina’smosteconomicallydynamicregion 23 Part2| Guangdong-HongKong-MacaoGreaterBay 24 Economicoverview 26 DevelopmentoftheGBA 28 ForeigntradeintheGBA 30 LeadingindustriesintheGBA 31 PreferentialpoliciesintheGBA 34 Investingintheinternationalfirst-classbayarea 36 Part3| Jing-Jin-JiEconomicRegion 38 Economicoverview 40 DevelopmentoftheJing-Jin-Jiregion 42 ForeigntradeintheJing-Jin-Jiregion 43 LeadingindustriesintheJing-Jin-Jiregion 46 Prefere