Part 4: Importing from China
Importing from China: Jiangsu Part 1 - Suppliers in Nanjing
Learn about China's richest and most densely populated province, Jiangsu. Also featuring the neighbouring cities of Changzhou and Zhenjiang.
It feels strange posting anything this week related to China's growth and success in the aftermath of catastrophic stock collapses. In the world of manufacturing the show must go on, but if you have interest in China economics I recommend you read some articles on the past 2 weeks events like today's from the New York times. This could be the new Lehman brothers but that's not what I am here to write about today. Instead this is the first in our series about Jiangsu province and clusters of cities with important manufacturing for anyone interested in importing from China.
Jiangsu – “Land of Water”
Jiangsu might sound obscure and very far away to many, but in China Jiangsu is the very epicenter of modern China's economic success. Here are some quick facts to get started.
- Most densely populated province in China.
- Highest GDP per capita of all Chinese provinces.
- Growth rates over 10% for 10+ years.
- Most developed province in China according to the HDI.
- Very wealthy south in contrast to a poorer north.
Jiangsu is home to many of the world's leading exporters of electronic equipment, chemicals and textiles. It has also been China's largest recipient of foreign direct investment (FDI) since 2006. The GDP sits at around a cool 1 Trillion USD which is about half the size of India's total. South Jiangsu province is laced with a well-developed irrigation system which spawned the name 水乡 (shuǐxiāng "land of water"). Cities such as Suzhou dubbed “Venice of the east” are known for their city canals. More about that next week - today we want to look at the capital city of Jiangsu, Nanjing, along with its neighbors Changzhou and Zhenjiang.
Nanjing - Southern Capital
Home to 8M people, Nan meaning south and jing meaning capital, Nanjing has served as the capital of China up to 1949 when the People's Republic of China was formed. While on the subject, Bei means north and so Beijing simply means north capital.
The main industries around Nanjing are:
- Electronics (Panda, Sharp, Suning)
- Cars (Jincheng Motors, Volkswagen)
- Steel (Nanjing Steel)
- Pharmaceuticals (Nanjing Pharmaceutical Factory)
- Solar Power Products (CSun, ET Solar)
- Beer (Jiangsu Yanghe Brewery – mostly for domestic sales)
The city has a long and proud history but also a painful wartime history. In modern times though the huge economic success of the past 20 years led Nanjing to be a driving force behind Jiangsu province, on average 2 foreign businesses open there every day (not corner shops). The achievements there are testament to the people's spirit and intelligence. As a former capital, education is high on the priority list; on visits to Nanjing I has been touched by the very hospitable nature of the local people. On a particularly memorable occasion I was served a full bull's head (and other parts) as guest of honor. Let's say it was a great experience but not for the squeamish! Sadly I don't have the picture here but use your imagination.
Nanjing – How to get there?
Since the completion of the Beijing-Shanghai high speed line, travel time between Beijing and Nanjing has been reduced to approximately four hours (from 11). Between the major urban centers of Suzhou and Nanjing, it is possible to catch a high-speed train every five to ten minutes during the day. China is big, so getting from A-B efficiently is important – The high speed rail services are incredibly useful!
Changzhou – High Tech hub of FDI.
In the past decade Changzhou has regularly featured in the top 10 “best business cities in China” lists as published by Forbes. It is located to the east of Nanjing and similarly close to the banks of the mighty Yangtze which winds its way towards the East China Sea north of Shanghai. Getting to Changzhou is an easy mission from a central hub like Shanghai (1 hour on the HSR High Speed Rail). It is pretty much halfway between Shanghai and Nanjing. I enjoy doing business in Changzhou as it is easy to access and the suppliers are knowledgeable and easy to deal with for those importing from China. Items purchased include very good quality exhibition and advertising equipment, all kinds of timber flooring, shipping containers (a perfectly random selection) for anyone interested in importing from China.
Here is a more organized list of the main industries in Changzhou with examples of local and foreign companies. Starting with some traditional industries:
- Textiles (Rieter)
- Heavy Engineering (Terex, Komatsu)
- Wood (Meiyida Wood Co. Lingdian Wood Co.)
More significant growing 'advanced' sectors:
- Biotechnology and Pharmaceuticals (Changzhou Biopharmaceutical Business Incubator).
- Advanced Materials (Huawei Century Electronic Group).
- New Energy (Changzhou GS New Energy Tech, Changzhou Heco).
All of these industries contribute a significant portion of Changzhou's 50 Billion GDP. 57% of the GDP comes from industry which is a better balance than the 99% of Wenzhou. Half of the 50 Billion is accounted for by high end manufacturing in new energy and bio tech. Relatively unknown 10 years ago and maybe still to many Changzhou is now home to 50 of the Forbes top 500. It also boasts over 7,000 FDI companies and individuals from over 100 countries. It all adds up to make Changzhou one of the best cities in China to do business.
Zhenjiang – Would you like vinegar with that?
Zhenjiang lies between Nanjing and Changzhou again close to the banks of the Yangtze. For a “relatively small” city by China's standards (3M people) it produces a GDP of about 40 billion USD which is pretty impressive. What is equally impressive is the eclectic mix of industry that produces same. Here is a snapshot of the main manufacturing in Zhenjiang.
- Paper Pulp (biggest papermaking base in Asia) (Zhenjiang Dadong Pulp & Paper Co.)
- Plastics (Rongfa)
- Anchor Chains described as “The world base for anchor-chain making” (Asian Star Anchor Chain)
- Vinegar (Chinkiang)
The vinegar one is a little odd since when you go there you will constantly see truckloads of vinegar, billboards advertising vinegar, and when you get to lunchtime it will definitely make an appearance! Light industries in Zhenjiang occupy 60% of the city's GDP. Zhenjiang has thrived due to its geographical position at the meeting of the Yangtze and Grand Canal.