Guangzhou's industry plays a significant role in the economy of the whole city. The industrial added value has been ranking 2nd among the 10 largest cities of China for the last continuous 8 years. In 2003, Guangzhou's industry has made tremendous contribution to the Guangzhou economy and social development, fulfilling the gross industrial output of 470.6 billion yuan (equivalent to 56.9 billion USD) with an increase of 27% compared with that of 2002. Meanwhile, Guangzhou's industry realized the contribution rate of 60% to the GDP of Guangzhou and contributed 9% to the growth of GDP.
Guangzhou's industry distinguishes itself in the following aspects:
First, Guangzhou owns the largest number of industrial categories among the cities in south China area with a comprehensive and complete industrial system.
Second, Guangzhou boasts lots of famous brands and China's famous products, such as the unique brand "Pearl River Piano" which achieves the highest sales volume worldwide, the brand "Pearl River Beer" with high market shares in China, the traditional Chinese patent medicine and the newsprint.
Third, The multifaceted industrial structure gets boosted with the state-owned enterprises, joint ventures and private enterprises thriving altogether.
Fourth, The three pillar industries develop rapidly. The petrochemical industry, automobile industry and electronics and telecommunication equipment industry totally fulfilled the gross industrial output of 160.9 billion yuan (equivalent to 19.5 billion USD), an increase of 48% up to the last year. Fifth, Guangzhou boasts excellent investment environment and great potential in outward economic development. Guangzhou has attracted the attention all over the world with the properties like distinctive geographical advantage, rich human resource, complete infrastructure, rational industrial layout and efficient civil service.
Up to now, there are 115 companies of the Global 500 have established their subsidiaries in Guangzhou.
Fields of Guangzhou's Industry for Intensified Development:
1. Mechanical Equipment Industry -- Spearhead Industry in South China
Since Guangzhou is the largest industrial city in South China, its mechanical equipment industry enjoys irreplaceable edges and a vast space for development in South China, or even Southeast Asia. Currently, the focus is on the development of shipbuilding, heavy machinery, numerically-controlled machines, complete sets of equipment for buildings, power transmission and transformation equipment, packing machinery, etc. The goal of the city is to enable the total output value of the mechanical equipment industry to exceed 150 billion yuan (equal to about 18 billion USD) by 2005 and then become doubled on this basis to reach over 400 billion yuan (equal to about 50 billion USD) by 2010.
2. Automobile and Parts Industry -- One of China's Largest Auto Bases
Auto industry is an industry that is growing the fastest now in Guangzhou. All the four leading auto manufacturers of Japan, like Honda, Nissan, Toyota and Isuzu, have set up auto-manufacturing factories in Guangzhou. A large number of domestic and foreign auto parts manufacturers have settled in the specialized auto parks situated in Nansha, Huadu, Baiyun and Huangpu to go along with the auto-manufacturing enterprises, forming a sound pattern for focal development. While continuing to expand the manufacturing of automobiles, Guangzhou's auto industry will also focus on developing the auxiliary industries, e.g. molds, chemical engineering, electronics, instruments and tyres, to create a development structure that features dovetailed upstream and downstream, rational division of work and complete industrial chains. The auto output of Guangzhou will reach 500 thousands by 2005 and 1 million by 2008, when the output value of combined automobiles and parts will stand around 300 billion (equal to about 36 billion USD), so that the city will become one of China's largest auto producers.
3. Electronics and Communication Manufacturing Industry -- Industrialization Spurred by Informatization
This is one of the pillar industries of Guangzhou. As the only exemplary city of China for the promotion of enterprise informatization and a national exemplary city for the informatization of the manufacturing industry, Guangzhou will also actively introduce powerful domestic and foreign strategic partners to expand its electronic information industry, including the manufacturing of communication equipment and computers. The goal is to enable the industry to achieve a total output value of 80 billion yuan (equal to about 10 billion USD) by 2005.
4. Petrochemical Industry ----- Going All Out in Building a World-Class Petrochemical Center
While the world petrochemical industry is leaning to large scale and adjacency to ports and speeding up its move to China, relative edges have loomed large for Guangzhou to develop its petrochemical industry in South China. The city will boost the cooperation with multinationals to expand the production scale of oil refining and ethylene and bring along the growth of downstream industries. In the years to come, the petrochemical industry will increase its oil refining capacity from 10 million ton/year to 18 million ton/year and increase the output of ethylene from 200,000 tons / year to 800,000 tons / year. Meanwhile, Guangzhou will aim at renowned domestic and foreign chemical enterprises to work with them in promoting the extension of the chain of the petrochemical industry, focusing on the development of fine chemicals of high technological requirements and high added value and creating a complete and efficient chain of petrochemical industry.
5. Modernization of Traditional Chinese Medicines and a Modern Biological Pharmaceutical Industry -- Seamless Integration of Traditional Industry with Modern Technology
Guangzhou is a region where the industry of traditional Chinese medicines is fairly developed. Guangzhou Pharmaceutical Holdings Limited ("GMG") stands in the forefront of China's medicine producing and marketing enterprises and owns name brand products that have a long history and a reputation both at home and abroad. At present, Guangzhou gives key support to the development of new Chinese medicines, the secondary development of famous Chinese medicines and the application of bioengineering researches in the modernization of Chinese medicines to accelerate the formation of industrialized bases. By 2010, the Chinese medicine enterprises will achieve a sales value of more than 10 billion yuan (equal to nearly 1.5 billion USD). In the meantime, the city will step up the cooperation with world famous pharmaceutical enterprises in the field of biological medicine to selectively develop and support products of biological medicine with gene engineering as representative and biochemical pharmaceutical industry that uses modern biological technology.
6. E-business under Energetic Development -- Construction of Procurement and Trade Center of Industrial Raw Materials
Guangzhou will also actively promote e-business and, in the near future, set up six major platforms of electronic transactions for metal materials, grains, coals, medicines, petroleum products and famous local products. It will work hard to develop industrial logistics to give a further play to its regional advantages as a central city and the impact on the Pearl River Delta and the other parts of South China.
Agriculture and Rural Areas
1 Basic facts about agriculture, rural areas and farmers in Guangzhou
Guangzhou's agriculture and rural area are mainly located in Baiyun District, Panyu District, Huadu District, Zengcheng District and Conghua District and scarcely in Huangpu, Tianhe and Haizhu District. At present, it has 42 towns, 59 communities, 1,237 administrative villages. By the end of 2003, there were 2.806 million people living in villages and towns, among which 2.336 million or 83.3% were rural population and 788,000 people engaging in agricultural, forestry, husbandry and fishery industries. With an arable land of 2.024 mu, Guangzhou recorded a total agricultural output value of 18.07 billion yuan in 2003, an increase of 2.9% over the previous year. The added value of agriculture rose by 1.02% to 10.54 billion yuan, accounting for 3.02% of GDP. The agricultural sector, though not very high in its total output value and added value, helps to feed about 2 million rural population and provides a lot of quality and safe farm products and good ecological environment for the city.
Guangzhou's agricultural industry is very important for Guangdong Province. It creates about 10% of total agricultural output value in the province, compared to only 6% of farm land and 5% of rural workforce. Among 21 cities in the province, Guangzhou ranks first in vegetable, flower and milk production, second in lichee production and third in total agricultural output value and husbandry. Guangzhou is among the first in Guangdong Province to pilot the industrialization of agriculture and one of the best in terms of green food production, farm products processing and standardized production. It takes the lead in the country to produce and sell hazard-free vegetables. Among 30 leading firms of Guangzhou, 9 are also accredited as provincial-level leading ones, 4 as national ones, including Jiangfeng Industrial Company, Congyu Market and Guangzhou Flowers Expo Garden, and 8 with an annual sales revenue of more than 100 million yuan.
In the first half of this year, sticking to the guideline of "give more, take less and relax control" and implementing the principle enshrined in the No. 1 document issued by the central government, Guangzhou took a series of measures to increase the income of farmers, which achieved desirable results to some extent, in spite of the adverse effects of "bird flu", spring drought and spring cold. Calculated at the current price, the total agricultural output value of Guangzhou reached 4.34 billion yuan in the first half of this year, up 3.4% over the same period of last year. Village and township enterprises developed in a rapid way, turning out an output value of 87.63 billion yuan, rising 11.5% over that of last year. The net income of farmers in currency saw an increase of 6.8% to 3,469.67 yuan.
2 The characteristics of agriculture and rural areas in Guangzhou.
2.1 Accelerated process of agricultural industrialization
The Guangzhou Municipal Government and CPC Guangzhou Committee made the decision to give supportive measures to 20 leading enterprises and establish 10 model zones of modern agriculture in 1998. In 2001, during the 7th session of its 9th plenary meeting, CPC Guangzhou Committee decided that more efforts should be made to accelerate the process of agricultural industrialization. It was also decided that supportive measures, such as capital, technology and information, should be offered to selected enterprises on the basis of their strength, size and the ability to increase the income of farmers, with priority laid on leading enterprises in the fields of processing, distribution, agricultural cooperation and science development. As a result of those efforts, there emerged 56 county-level leading enterprises, among which, 30 rose to the rank of city-level ones, 9 provincial level and 4 national level. The leading enterprises attracted the participation of 248,000 households, accounting for 42.2% of total household number. The achievements Guangzhou made in promoting agricultural industrialization and modernization have won recognition of national leaders, National Agricultural Ministry and Provincial Agricultural Department.
2.2 Stronger competitiveness of farm products
An agricultural development pattern featuring three layers have been proposed to boost the development of seven leading industries, namely, vegetables, fruits, flowers, animal husbandry, aqua products, seeds and seedlings as well as sighting and recreational agriculture. Standardized production in agriculture bases have been promoted to ensure the safety and quality of agricultural products and the strategy of developing brand products stressed. 26 model zones of standardized production have been set up, including 4 national-level ones and 3 provincial-level ones. 63 production bases have been certified as hazard-free, 23 farm products winning the authentification of green food and 47 organic food. 73 farm products have been selected as famous and quality ones, including one winning the title of provincial-level famous products.
2.3 Ever-improved farm products market system
Attention has been given to the establishment of central wholesale market. Now the auction center of Guangzhou Flower Expo Garden has been put into use, whose cut-leaf flowers auctioned making up for 70% of the whole country. Jiahe pig wholesale market has gone through a successful trial-auction after its construction. The renovation of Jiangnan vegetable wholesale market and Huangsha aqua products wholesale market are underway with construction of two central wholesale markets of fruits and grain oil products in preparation.
Endeavors have also been made to establish the sub-central wholesale markets and markets of original places. In recent years, 72 wholesale markets of farm products bigger than 5,000 square kilometers have been constructed.
Leading enterprises are encouraged and guided to set up chain stores and outlets in the downtown area. Branded farm products like "Dongsheng" have made their way to large supermarkets and restaurants. Guangzhou has put in place a market system which pivots on central wholesale market and combines the development of markets of original places, retail markets and supermarkets. In 2003, the wholesale trade volume of agricultural products totaled 25 billion yuan, with the trading prices of vegetables, pigs, aqua products and foliage plants serving as the "thermometer" of the whole country.
2.4 Higher income level of farmers
In 2003, the per capita net income of farmers in Guangzhou was 6,130 yuan, an increase of 5.1% over the previous year and 2.3 folds of the national level of 2,622 yuan. Compared to the per capita annual net income of urban and township residents of 15,003 yuan, the ratio between the income of urban and rural residents was 2.4:1 (The ratio between the income of urban and township residents in China was 3.24:1). The proportion of the farmers' income was: 3,254.5 yuan were salaries paid for working in local enterprises or those in other places, accounting for 53.1% and 2,446 yuan earned by operating family-owned business, accounting for 39.9%.
2.5 Narrowed gap between urban and rural areas
In recent years, governments at all levels and relevant departments have expanded their investment in infrastructure facilities in rural areas, upgrading facilities such as water conservancy, roads, power supply, telecommunications and education rapidly. From 1999 till now, an investment of 1.76 billion yuan was spent on the renovation of power grid to basically complete the power system reform in rural areas, managing the power supply in cities and towns in a uniform way. In 2002, Guangzhou became one of the first cities that introduced the same power grid and power cost to urban and rural areas, cutting the power cost of farmers by a big margin. In 2003, the Municipal Government launched a "Five Accesses Project" to speed up the efforts to make water, power, telephone, cement roads and cable TV accessible to rural areas. The Municipal Finance Bureau and other related governmental bodies injected 81 million yuan in road construction and water supply only, helping to ensure the "five accesses" in all administrative villages that year. In 2003, the total collective asset of rural areas amounted to 42.495 billion yuan, among which, 10.395 billion yuan were township assets and 32.10 billion yuan village assets. The rural areas have stepped up an open administrative system in administrative and village affairs, putting in place an open financial system in all administrative villages. The rural areas also vigorously pushed ahead with a new mode of cooperative medical system with the participation of 60% of towns, 35.79% of villages and 29.61% of farmers.
Initiatives have been taken to coordinate the planning of urban and rural areas, implement the strategy of central towns and build satellite cities of high standards. In the end of 2001, CPC Guangzhou Committee and Guangzhou Municipal Government made the decision to speed up the construction of central towns in rural areas, aiming at turning them into satellite cities in the long run. The development of central towns, featuring proper layout and reasonable plan, will proceed on the basis of government support and market rules. Drawing upon the development concept of cities, the central towns would be planned, built and managed in a way that broke away from the traditional development mode of small towns. At the same time, efforts have been made to combine towns into communities and facilitate mergers among towns and villages. Up to now, the number of town-level administrative areas has been reduced from 74 in 2001 to 42, covering 59 communities developing agriculture. Five central towns ----Jianggao Town in Baiyun District, Shiling Town in Huadu District, Shawan Town in Panyu District, Taiping Town in Conghua District and Shitan Town in Zengcheng District ---- were the first key development towns. This year, another five towns have been identified as the key ones, including Taihe Town in Baiyun District, Shilou Town in Panyu District, Tanbu Town in Huadu District, Aotou Town in Conghua District and Xintang Town in Zengcheng District, raising the number of key towns to 10. "The Decision on Further Accelerating the Construction of Central Towns" will be released by the Municipal Government very soon, which elaborates the supportive measures to develop central towns in ten aspects. It is stated in the decision that Guangzhou will establish about 15 central towns, which will become satellite cities with an area of 20 square kilometers and population of 200,000 ultimately. The central towns, promoting the concentration of industry and population, and absorbing surplus rural workforce, will propel the all-round development of rural areas so as to change the binary economic and social structure dividing urban and rural areas fundamentally.
To facilitate people who want to invest and set up business in Guangzhou, here is an introduction of Types of business presence in China:
Before starting up a business in China, you have to know what are the options. Foreign Investors generally establish a business presence in China in one of five modes: Wholly Foreign Owned Enterprise(WFOE); Representative Office; Foreign Invested Partnership Enterprises (FIPE); Joint Venture and Hong Kong Holding Company.
Wholly Foreign OwnedEnterprise (WFOE) is a Limited liability company wholly owned by the foreign investor. WFOE requires no registered capital and it's liability of equity , can generate income, pay tax in China and it's profit could be repatriate back to investor's home country. Any enterprise in China which is 100 percent owned by a foreign company or companies can be called as WFOE.
Representative Office (RO) is aLiaison Office of it's parent company. It requires no registered capital. It's activities would be: product or service promotion, market research of it's parent company's business, Quality Control liaison office etc in China. RO generally is prohibited to generate any revenue nor generating contracts with local businesses in China.
Joint Venture (JV) is a Limitedliability company formed between Chinese investor and Foreign investor. The parties agree to create a entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. JV usually been used by foreign investor to engage the so called restricted in areas such like: Education, Mining, Hospital etc.
Since March 1, 2010: Measures ofEstablishment of Foreign Invested Partnership Enterprises (FIPE) in China is taking effect. The regulation, which take effect since March 1, 2010, are known as the Administrative Measures for the Establishment of Partnership Enterprise in China by Foreign Enterprises or Individuals. There's no required minimum registered capital for a Foreign Invested Partnership Enterprise (FIPE) in Shanghai, Beijing, Guangzhou, Shenzhen, Hangzhou and rest cities of China
Hong Kong Company usually been used as a Special Purpose vehicle (SPV) to invest Mainland China. Hong Kong is one of the quickest locations to Incorporate a business. Although a HK company is not a legal entity in Mainland China (Mainland China and Hong Kong, See Wiki 1 country, 2 systems), lots foreign investors, especially investors from Europe and North America still chose to setting up a Hong Kong company as SPV to invest China.
After China's entry to WTO, most industries in China welcome foreign investment, WFOE setting up in Chinabecomes the first option of foreign investment's entity structures instead of Rep. Office setting up in China. At the mean time, for tax purpose, effective licensing system etc more and more investors use Hong Kong as the holding company to invest China mainland, using this offshore company to hold their operations in China.
Business set-up in Guangzhou is a big project by itself, which requires financial and time commitments, business management knowledge and China expertise. Identifying a competent agent to manage the complex process will be a cost and time effective way to avoid potential pitfalls . Tommy China Business Consulting has direct connections in the local government
Since 2006, TCBC has been focusing on consulting services for our clients to invest in Guangzhou China. We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization, Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition. Advising on formation of WOFE and business structures, managing and controlling WOFE in Guangzhou China, drafting privacy policies and structuring commercial transactions
TCBC will manage all aspects of incorporation to get you a business license in Guangzhou China. We offer a range of company formation services including helping you to set up:
-Wholly Foreign Owned Enterprises (WFOE )
-Joint Ventures (Equity/Co-operative)
-Foreign Invested Partnership Enterprises (FIPE)
Contact Tom Lee for business set up in Guangzhou now.
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