Development and Resources

1 Beijing's Industrial Sector in the New Century

1.1 Beijing's industrial sector: The best choice for global investors

Beijing, the capital city of the PRC, is now full of vigor and vitality, and is growing into one of the international metropolitan cities. In 2003, its GDP reached361.2billion Yuan with an annual average increase of 10.5% compared with that of the previous year; the GDP per capita is 3,809US Dollars with an increase of 9.2% from that of 2002. At present, Beijing's industrial sector is experiencing a sustainable, rapid and healthy development. A new industrial economic pattern is taking shape in Beijing. The new industrial economic pattern features stronger hi-tech business, better traditional industrial sector, more developed metropolitan economy.

Thanks to the reform and opening policy China introduced in late 1978, Beijing has gained much ground in the following aspects:

Intensive technological resources and rich intellectual resources: Beijing boasts dozens of national scientific research institutes, sixty universities and colleges, nearly 400 polytechnic and vocational schools, and many foreign enterprise service organs;

Status as the market center of China: The center features huge commodity demand, the consumption demonstration effect, and the high-density market information;

Financial advantage: All the large financial institutions are headquartered in Beijing;

Comprehensive environment: Beijing is able to satisfy managers in cultural, health, medical and educational fields;

Superiority in information service: Beijing is number one city in terms of information industry in China; and Superiority in transportation and communication: Beijing has easy access to radiating highway, railway and aviation networks.

China's accession to the WTO and Beijing's success in bidding for the right to host the 2008 Olympic Game have combined to stimulate Beijing's economic development. It is predictable that by 2008, Beijing's GDP per capita will reach 6000 US Dollars and the modernization will be realized nationwide.

Blessed with an excellent investment environment and the service system connecting with the international community, Beijing's industrial sector will quicken its pace in readjusting its structure, and modernizing the manufacturing industry. Through the reorganized use of resources and rational planning, Beijing will seek the formation of a development pattern characterized by construction of development areas and production bases. A modern industrial group taking shape in Beijing will bear the salient feature that Beijing is the capital of the country and has the ability to compete in market competition.

Beijing has become the best choice for international investors. The foreign-invested enterprises have become a main force that drives the economic development in Beijing; and more foreign investment is expected to be channeled into the city. By the end of 2003, the industrial foreign-invested projects have added up to 1260, involving a contractual amount of 24.79 billion US Dollars. Export products of the foreign-funded enterprises as a percentage of export total is 69.6%. 159 out of top 500 global enterprises have set up enterprises or their regional headquarters in Beijing, and 9611 overseas companies have set up representative offices. Foreign-funded enterprises that have settled in the development areas or production bases form an industrial chain that yields good economic results.

Beijing welcomes foreign businesses to invest in Beijing's industrial sector in such forms as acquisition and merger, share holding, or establishment of joint ventures and cooperative enterprises.

The Municipal Government of Beijing will continue its effort to build up an investment environment in accordance with the international practice and strive to help reduce production cost. The purpose is to see the city's industrial sector develop in a healthier and more orderly way.

1.2 Take the road to new-type industrialization and modernize the manufacturing industry

The Municipal Government of Beijing has decided that the industrial sector of Beijing will speed up establishment of a new industrial pattern with hi-tech industry as the forerunner, modern manufacturing industry as the support to developing the modern service industry comprehensively, follow the road to the new-type industrialization, and develop the modern manufacturing industry as the key support to the capital economy.

1.2.1 Speed up the development of modern manufacturing industry

To develop the modern manufacturing industry of Beijing, effort will be made to introduce internationally advanced technology to develop mainly hi-tech manufacturing and applied technology manufacturing; speed up the cultivation of and increase support to new business sectors that could contribute to industrial growth; reorganize available resources; and make full use of talents. All these are geared to speed up the development of modern manufacturing industry. We hope that foreign investors can grasp this opportunity, to take part in the development of modern manufacturing industry, and seek mutual development. The Municipal Government of Beijing will give strong support in the aspects of system, policy, capital channels, human resource, government purchase and auxiliary facilities.

The process of developing the modern manufacturing industrial sector of Beijing can be divided into two phases:

The first phase extends from present to the year of 2005, when the modern manufacturing industrial base, the key industrial groups and industrial chains will be established in the main, thus providing important support for the capital economy.

The second phase is from 2006 to 2010, when the modern manufacturing industry comes into the gross expansion phase and grows into a new important backbone of the capital economy.

In the recent period, the Municipal Government of Beijing will put emphasis on the development of automobile industry, microelectronics industry, the optics-machinery-electronics integration industry, and bioengineering and pharmaceutical industry.

1.2.2 Exploit the remarkable advantages of its service sector to stipulate the development of the manufacturing industry

Beijing is the center of Bohai Rim Zone, and the transportation hub of north China. It is the goods reshipment center, as well as the information, science and technology center with a high density of market information. By combining the manufacturing and service industries, Beijing has an apparent convergence effect and a huge service market. It is therefore richly endowed with resource that could be exploited to develop modern service and modern manufacturing industry.

We hope foreign investors will invest in the modern service sector composed of materials delivery, sales, and scientific research-that are blended with modern manufacturing industry-to achieve maximum tangible results.

1.2.3 Speed up the industrialization of the suburban areas to promote the development of the modern manufacturing industry.

Beijing covers a total area of 16,800 km2. The downtown area totals 324 km2 and is still expanding to meet socio-economic development, and the vast suburban area boasts geographical resource for the industrialization.

In the years to come, Beijing will work hard to the economic development of districts and counties, speed up the construction of industrial development areas, and develop the local economy of suburbs and towns in order to build them into an important industrial base for the capital industry in the later period. We hope that foreign investors can grasp the opportunity and invest in the industrial development areas.