Part 6: Importing from China
Importing from China: Jiangsu Part 3 - LYG, Xuzhou.
Today we are looking at 3 manufacturing cities in the north of Jiangsu province, eastern China. While they are not as widely known internationally as their provincial siblings in the south like Suzhou they are still noteworthy. With abundant fresh water supply and fertile soil they are really trying to balance the production of clean and organic food whilst encouraging industrial growth.
Lianyungang was one of the first 14 Chinese cities opened up to foreign trade in 1984. A key factor in that decision was down to its importance as a transport hub domestically with a favourable positioning to leverage and inspire growth on an international level. Have a look at the map and you will understand a bit more about the location.
Main Industries: Agriculture, Pharmaceuticals, Transport, Ecology, Tourism and Minerals.
Foreign Driect Investment: 1Billion USD, 3,345 foreign companies regisitered as of 2014.
Taditionally LYG has always been an agricultural region owing to fertile soils and plentiful water supply from rivers and lakes that cover 25% of the cities area. Good supplies of fish and that rich soil allowed rice and vegetable crop growing to flourish. With China's last 2 decades of accelerated growth agriculture became less fashionable as people chose to move from the land into industrial factories in search of the Chinese dream. Agriculture and the land producing food suffered from a lack of planning and pollution. All of this is a common story in relation to China's economic boomtime however in LYG they are determined to turn things around . A great deal of money has been invested in organic produce, green agricultural practices along with tree planting.
LYG has become well known for pharmaceuticals and has companies now supplying reputable distribution channels in Europe, USA and Japan. Within China it is the also most important production base for hepatitis and cancer treating drugs. You will find plenty of Lianyungang pharmaceutical suppliers at China's No. 1 Pharma Sourcing fair in Shanghai.
Touched on briefly above is the importance of LYG as a port and transport hub, proximity to Japan and Korea made it an obvious point to increase foreign trade from. However plans to ship from the east were not the only thing in mind, it is also the start point of the Longhai railway that joings Xinjiang province in the northwest and even continues to Russia and finally Rotterdam. There are some grand plans to build an economic belt along the entriety of the line to heighten its signifance but that could take a while! A long while.
And so lets turn to the city of Xuzhou which boasts a noteworthy population of around 9 millionpeople, second in size only to Suzhou in the south. The main developing industries related to Xuzhou are construction machinery, food production & processing, environmental protection and logistics.
Construction Machinery is definitely a major area with XCMG or Xuzhou Construction Machinery Group the biggest manufacturer in the area with revenue of about 90 billion RMB. US giant Caterpillar also has a large manufacturing presense there. Cranes, loaders, trucks, diggers and mining equipment of various types are the typical products. The large industry types have spawned some smaller companies but still relatively large where those wanting to import from China any type of construction machinery would be well served.
With companies like XCMG around it is probably no surprise to know that the area is known for having resources such as coal, marble, lime and salt which all need to be mined. On the opposite side of mining are the environmetal protection efforts. Given the area has over 200 rivers and scenic lakes there has been continued investment to counteract the very real pollution effects of industries like coal have on the air, water and soil. Like Lianyungang the struggle to maintain the areas high quality food production is likely a tough one but needs to be sucessful for an area so well known in food production. The food processing industry accounts for as much revenue as coal mining so there is hope that at least it wont fall to "an economic decision".
Xuzhou is also sitting in an area important for the meeting that railway line to Europe and China's most important high speed route connecting Shanghai and Beijing. Historically too it was an important place for meetings on the battlefield, the most recognised of recent times being during the Chinese Civil War of 1948-49. Huai'an to Xuzhou's south stretches around two major lakes the Hongze and Baima. The former being the 4th biggest freshwater lake in China at a size of 2100km square. The abundant natural sources of water are key in irrigating crops and in transporting materials on huge barges. Water is not the only natural resouce in Hui'an though as there are good deposits of oli, natural gas and rock salt which help drive the industrial economy. The shift from farming to industrialisation in Hui'an has seen companies open up primarily in chemicals, mechanical parts manufacture and bio technology. Much like their neighbours in Lianyungang and Hui'an it is a tough balancing act. If you visit any of these cities in north Jiangsu be sure to save a day or 2 to explore some really scenic rivers, lakes and mountains. Drop me a line if you need any advice on where to go.
Just like the balancing act required with the ecology of the region, financing business transactions with suppliers in China can also be difficult but it need not be all fear and stress.