10.2007

Major Economic Indicators

Notes:¹ In real terms ² For all state-owned enterprises and other forms with annual sales over RMB 5 million
^{............... 3} First half of 2007 ⁴ First quarter of 2007
Sources: Beijing Statistical Yearbook 2007, China's customs statistics 8.2007

General Background

Beijing has a total area of 16,410 square kilometers. Total population stood at 15.81 million by the end of 2006.

Beijing is the capital of China and the country's political, cultural and international exchange center. Beijing is one of the four autonomous municipalities along with Shanghai, Tianjin and Chongqing, which enjoys similar economic and administrative autonomy as a province.

In order to host the 2008 Olympic Games, the Beijing government will invest a total of about RMB 280 billion to improve the city's infrastructure by 2008. These would include stadiums and related facilities, transport and telecommunication infrastructure, etc.

The private sector in Beijing has developed rapidly. By the end of 2006, there were about 306 thousands of private enterprises, increased by 103% from just 151 thousands in 2002.

Industries

Beijing's service sector accounted for 70% of the city's GDP in 2006. Financial services, whole-sale trade and retail trade, information technology services were the three biggest sectors, composing 17.4%, 13.5%, and 12.3% of the service sector respectively. Scientific studies and technical services recorded the fastest growth of 20.4%in 2006.

Composition of GDP (%)

Source: Beijing Statistical Yearbook 2005, 2007

According to Beijing's 11th Five-year programme, Beijing will push the development of modern services sectors, including the development of services outsourcing, cultural and creative industries. Beijing is one of the eleven services outsourcing bases in China. Beijing has also adopted a cultural and creative industry development programme, projecting the industry to grow by an average of 15% per annum during the 11th Five-year programme. The share of cultural and creative industry in the city's GDP is projected to increase from 10.3% in 2006 to 12% in 2010.

Beijing's industrial production is dominated by heavy industries and large enterprises. In 2006, heavy industries accounted for 84.7% of Beijing's gross industrial output and large enterprises accounted for 50.5% of the output. Major industries include telecommunications equipment, transportation equipment, chemicals, machinery, metallurgy and food making.

Output Share of Leading Industry Groups (2006)

Source: Beijing Statistical Yearbook 2007

High-tech development

Beijing is keen to develop hi-tech industries such as electronics, information technology, biological engineering, pharmaceutical and new materials. In 2006, gross added value of hi-tech industry amounted to RMB266.6 billion, representing 32.4% of Beijing's total gross industrial added value.

In 2006, Beijing's total R&D expenditure amounted to RMB43.3 billion, accounting for 5.5% of its GDP, both the amount and ratio to GDP ranked the top among other provinces autonomous municipalities.

Beijing is trying to build a Chinese Silicon Valley and in this connection, Zhongguancun, the famous High and New Technology Development Zone has been set up in 1988 to attract investment in science and technology. In 2006, sales revenue of the Zhongguancun High and New Technology Development Zone reached RMB674.5 billion, up 38.3% from 2005. In the first eight months of 2007, total sales continued to increase by 27.6%. By the end of 2006, there were 18,149 enterprises operating in Zhongguancun, employing nearly 0.8 million people.

Beijing's strengths in human capital and scientific research have helped its development of hi-tech industry. Beijing has the largest number and the most prestigious institutions of higher education and scientific research in the country. There are 79 institutions of higher education (including the Beijing University and Tsinghua University). At the end of 2006, there were 351 scientific research institutions employing 86,205 scientists and engineers.

Tourism

Tourism is also an important industry in Beijing. The city has been the capital of China since the Yuan Dynasty. Its tourist attractions feature its rich palatial heritages. In 2006, the tourist market received 3.9 million overseas tourists, bringing foreign exchange revenue of US$4 billion; 132 million local tourists were received, bringing revenue of RMB148 billion.

Foreign Trade

Beijing exports grew by 35.6% to US$24.9 billion in 2006. Hong Kong was the third largest overseas market, following the US and Japan. Major exports included machinery and transport equipment, and finished products grouped by materials. Beijing's imports grew by 30% to US$45.6 billion in 2006. Japan is the leading source of imports, followed by Germany and the US.

In 2006, Hong Kong was Beijing's fourth largest trading partner. In 2006, Beijing exported US$2,157 million to Hong Kong and imported US$510 million from Hong Kong.

Foreign Investment

Among the world's largest 500 enterprises, more than 185 have invested in Beijing. And over 40 of MNCs, such as NEC, SUN, P&G and Schlumberger, have set up R&D center and production facilities in Development Areas in Beijing.

Inflow of foreign direct investment recorded faster growth in recent years. In 2006, the utilized amount of FDI increased by 29.1% to US$4.6 billion.

FDI in Beijing

Source: Beijing Statistical Yearbook, 2007

The utilised amount of FDI in the service sector increased by 43.6% and accounted for about 61% of the total utilised FDI in Beijing in 2006. Areas that attracted the largest share of foreign investment included leasing & commercial services, information transmission, computer services & software. Utilised FDI in the real estate also grew markedly by 56% in 2006.

Hong Kong was the largest source of overseas investment in Beijing in 2006. Hong Kong investors signed 440 contracts with contracted amount of US$ 1,843 million. Larger investment projects are concentrated in the property sector. In recent years, Hong Kong investors have invested in the renewal of old cities. Hong Kong property developers such as Sun Hung Kai and Kerry Group have invested in reconstruction projects of old building located in Xidan and Wangfujing. Besides, Hong Kong developers (including Sun Hung Kai, Cheung Kong and New World) have engaged in developing shopping centers, as well as commercial and residential complexes.

Other major investors came from Japan, Korea, Germany, the US, Singapore, and Germany.

Since 1996, Beijing has given priorities to attract overseas funds for infrastructure development, industrial restructuring, urban renewal, hi-tech industries and service industries. In the coming years, priority areas for foreign investment will be in the modernization of old enterprises and hi-tech industries, as well as the development of the service sector, including such areas as export promotion, infrastructure development, finance, education, and land development.

Consumer Market

Purchasing power is strong in Beijing. In terms of per capita disposable income of urban residents, Beijing reached RMB 19,978 in 2006, which was up by 13.2% from 2005. Huge consumption demand from both the local residents and tourists has made Beijing one of the biggest consumer markets in China. Total retail sales in Beijing reached RMB327.5 billion in 2006, accounting for 4.3% of the nation's total.

Composition of Per Capita Expenditure of Urban Household (%)

Source: Beijing Statistical Yearbook, 2005, 2007

Beijing's three traditional shopping districts - Wangfujing, Xidan and Qianmen are well known in the country. In more recent years, due to development of the different ring roads, new shopping and commercial districts have developed at or outside the third ring such as the Chaoyang District and Haidian District.

Attracted by the size and potential of the consumer market, new department stores and shopping complexes mushroomed in the past few years. Retail outlets such as supermarkets, convenient stores, and warehouse clubs have also developed rapidly. Discount store outlet, such as Dia, also entered into the market. By the end of 2006, there were 126 foreign-invested enterprises engaging in wholesale and retail trade.

In recent years, foreign invested chain super markets such as Carrefour, Makro, Ito Yokado, etc. emerged. The operation of foreign invested enterprises has stimulated the development of other local chain stores and supermarket type of retail groups such as Hualian and Gome.