DEVELOPMENT ADVANTAGES AND PROSPECTS

(I)Development Advantages

(II)Prospect of the Auto Industry in Beijing

(III)Preferential Policies

RESOURCE IN DEVELOPMENT SPACE

A.Beijing Economic-Technological Development Area

B.Beijing Auto City

C.Beijing Opto-Mechatronics Park

D.Beijing International Garden of Automotive Electronics

E.Beijing Xinggu Industrial Development Zone

F.Beijing Yanqi Industrial Development Zone

G.Beijing Miyun Industrial Development Zone

PROJECT RESOURCE

Auto-manufacturing industry

Development Advantages

Covering an area of 168,000 square kilometers and with a permanent population of 14,564,000, Beijing is the political, cultural and international contacts center of China. Based on the established "Two axes, two strips and multi-centers" development pattern of the Beijing City, the land use for urban construction of Beijing will reach an expected scale of 1150 square kilometers by the year 2008. The investment of the whole society in Beijing will gradually achieve two shifts: in terms of space structure, to shift from being excessively concentrated in downtown areas to satellite towns and center towns to promote urban-rural coordination and balanced development of areas; in terms of industrial orientation, to shift from being concentrated on the real estate field to industrial fields with potentiality and reserve strength such as high- and new-technology industry, modern manufacturing industry and modern service industry to enhance the capacity of sustainable economic development. Beijing is one of the strongest cities of China in terms of comprehensive strength. In 2003, the total output value of Beijing reached 361.19 billion yuan, up 10.5% from the preceding year. The proportion of the secondary industry and the tertiary industry in the GDP of the entire city reached 36.0% and 61.4% respectively. The economic growth rate have maintained above 10% for five consecutive years, calculated at the current exchange rate. The per capita total output value reached 3819 USD. As per the struggling objectives raised by the Beijing Municipal Government, by the year 2008, the total output value of the entire city will reach a high of 630 billion yuan RMB, with that per capita reaching up to 6000 USD, allowing Beijing to take the lead in basically realizing modernization. (Figure BV?1)

Beijing is one of the cities with the largest economic development potentialities in China. Beijing has an industrial system with a sound foundation and striking characteristics, and has formed a cluster-type industrial pattern supported by state-level and municipal level industrial development zones and key industrial bases. Foundational industries including auto, electromechanical, chemical and steel industries have achieved a considerable economic scale. The high- and new-technology sector such as electronics and IT have formed remarkable industrial scale, which is taking the lead in China and keeping a high growth rate. The year 2003 witnessed an added industrial value of 101.73 billion yuan RMB, up 12% over the preceding year; that of the high- and new-technology industries reached 31.41 yuan RMB, accounting for 30.9% of the total added industrial value. The auto industry experienced a sudden rise, with the added industrial value reaching up to 10 billion yuan RMB, a 40% contribution factor to the industrial growth of Beijing. Beijing is the city with the most obvious location advantages in China. The Bohai Sea rim economic circle, with Beijing as the center city, including the liaotung peninsula, the Shandong peninsula, Beijing City, Tianjin City and Heibei Province, is characterized by remarkable high-technology nature, sound industrial foundation, large total economical volume, rich resources, dense population and vast market potentiality. It has imposed a strong radiation effect on North East, North West, North China regions and the whole country at large. It is the most active region with the largest development potentiality in China's futureeconomy. (Figure BV?2)

Beijing is the city with the most developed tertiary industry in China. In 2003, the added value achieved in the financial and insurance industry, commerce, real estate industry and postal/communication industry accounted for 23.2%, 12.2%, 8.4% and 7.8% of the whole tertiary industries respectively. Beijing is one of the most opened up cities in China. Beijing is increasingly strengthen the exchange with countries and regions of the world in the economic, trade, science and technology, education and culture fields, the friendly intercourse between governments, non-governmental organizations and social organizations is very active, and an all-sided, multi-layered extensive opening up pattern has taken shape. Beijing has established friendly exchange relationship with 72 countries and 124 capital cities and municipalities, of which 27 cities in 24 countries have developed the relations of friendly cities with Beijing. There are a total of 144 foreign embassies stationed in Beijing, along with 18 international organizations and regional representative organs and 185 foreign news agencies. The number of foreign representative agencies stationed in Beijing has exceeded 7000. The number of international students studying in Beijing has reached above 13000. The total value of international trade of Beijing has exceeded 68.46 billion USD in 2003. Beijing is one of utilizing the most foreign investment cities in China. In 2003, the whole city of Beijing approved 1360 new projects. The contractual foreign investment reached a sum of 3.27 billion USD, and the actual utilization of foreign direct investment reached 2.15 billion USD. The number of foreign invested enterprises approved by the city of Beijing has reached 13,000. Of the global top 500 enterprises, 159 have established regional head office or investment enterprises in Beijing. 9611 offshore corporations have established representative offices in Beijing. Beijing is the largest automobile consumption market in China. In 2003, the whole city of Beijing achieved retail sales of social consumables of 191.67 billion yuan RMB, a growth of 14.5%, and the per capita consumer spending of town dwellers reached 11,123.8 yuan RMB, a growth of 8.1%. Automobile is a major hotspot in the consumer market in Beijing. The auto market in Beijing enjoys a great total demand and total transaction volume, which has imposed a strong market radiation to the surrounding areas. The auto market in Beijing enjoys 1/10 share of the nationwide auto market. Beijing is the financial decision making and macroeconomic control center of China. Central banks such as the People's bank of China, the Banking Surveillance Committee of China, the Security Surveillance Committee of China, the Insurance Surveillance Committee of Chian, and other major banking institutions including policy related banks, commercial banks and commercial insurance institutions have established their head office in Beijing. The 30-odd banking institutions and over 650 domestic and foreign enterprises located in the Banking Street of Beijing are controlling the operation of 90% of the credit funds and 65% of the insurance funds in China. Beijing is the region with the most significant head office economic effect in China. Numerous head offices of nationwide corporations and trade unions are collectively located in Beijing. With the incessant occurrence of business and social activities both internationally and domestically, a large volume of social and economic information is generated every day. Of the global top 500 enterprises, 58% have established their representative agencies and offices in Beijing. Of all the foreign invested enterprises, 57% have set up their head offices in Beijing. Beijing is the city with the most flourishing and developed science and technology, education and culture in China. Beijing has over 4000 scientific research institutions and 73 colleges and universities, with a total of 460,000 college and university students, 120,000 postgraduate students and 260,000 secondary vocational study students. The ratio of the total students of colleges, universities and above to the total population in Beijing reaches 3.98%. Beijing is the largest scientific research base nationwide and an important collecting and distributing center of both domestic and international scientific and technological information.