Location is a key consideration when setting up a business in China, with the Chinese Government encouraging investment in different regions.

Some cities and provinces specialize in certain industries and producing specific goods. Below you can find the overview of major Chinese cities and clusters – Shanghai, Beijing and Shenzhen.
Shanghai

The population of 24.28 million makes Shanghai become China’s most populous city. This city is also a global center for finance, research, technology, manufacturing and transportation. Shanghai is home to one of the world’s busiest ports, Shanghai Port, and the world’s largest stock exchanges, the Shanghai Stock Exchange.

The Shanghai Free Trade Zone (FTZ) is the first free trade zone on the Chinese mainland. In 2020, Shanghai was ranked as an Alpha + (global first-tier city) city by the Globalization and World Cities Research Network and ranked third in the world’s most competitive and largest financial centers.

Shanghai has the world’s largest urban subway network, the second-highest number of billionaires in the world, and the fifth-largest output city of scientific research.

Shanghai is home to amounts of higher education institutions, including four Project 985 universities: Fudan University, Shanghai Jiao Tong University, Tongji University and East China Normal University.

Shenzhen

As one of China’s Special Zones, Shenzhen is China’s fifth most populous city, home to the world’s fourth busiest container port and global technology, research, manufacturing, financial and transportation hub.

With its border with Hong Kong, Shenzhen attracts a large number of foreign investors and immigrants. Shenzhen has one of the world’s largest exchanges: the Shenzhen Stock Exchange.

Shenzhen’s nominal GDP has overtaken that of Guangzhou and Hong Kong, and it has become the 10th largest in the world economy.

Shenzhen has ranked the world’s largest city by Globalization and World Cities Research Network, and the eighth largest financial center in the world.

Shenzhen is a leading technology center in the world. Some technology companies, such as Huawei, Tencent and DJI, are based in Shenzhen. Shenzhen ranks 32nd among the world’s cities in scientific research.

Shenzhen Free Trade Zone (FTZ) is home to a large number of Fortune Global 500 companies. These businesses are in a variety of industries, such as:

  • Science and technology services
  • The real estate industry
  • Modern logistics
  • Information services
  • Imported vehicles
  • Cultural and creative industry
  • Cross-border e-commerce
Beijing

As the capital of China and the world’s most populous capital, Beijing is a leading center of politics, economy and commerce. Most large state-owned enterprises are headquartered in Beijing, and this city is also home to most of the Fortune 500 companies in the world.

Beijing is a major transportation hub in northern China, owns a well-developed network of railways and expressways, and a large airport for passenger traffic.

There are 91 universities settled in Beijing, many of which consistently rank among the best in the Asia-Pacific region and the world. Beijing is home to 175 foreign embassies, and the Asian Infrastructure Investment Bank (AIIB), Shanghai Cooperation Organization (SCO) and Silk Road Found.

Free Trade Zone in Shanghai

Free Trade Zone (FTZ) is an area where goods can be landed, processed, manufactured or reconfigured and re-exported without the intervention of local customs authorities. The goods are subject to the current tariff only when they reach consumers in the province in which the zone is located.

Shanghai FTZ
Shanghai is the Chinese first FTZ opened in Pudong New Area, 2013, and currently covers an impressive 28.79 square kilometers include four special customs supervision areas:

  • Shanghai Waigaoqiao free trade zone
  • The Waigaoqiao bonded logistics zone
  • Yangshan bonded port zone
  • Shanghai Pudong airport

And expansion areas:

  • Lujiazui financial zone
  • Jinqiao development zone
  • Zhangjiang high-tech zone

Shanghai FTZ encourages industries including:

  • Finance
  • Beverage & Liquor
  • Automobile
  • Machinery
  • Medical Apparatus and Instruments
  • Biological Medicine
  • Health Products
  • Cosmetics
  • Cultural Products

This FTZ has policies including but not limited to:

  • Low corporate tax rate (15%-9%) to support offshore trading companies
  • Exemption from import duty until the goods are shipped out of the warehouse
  • Faster VAT refunds
  • Free major currency exchange rate
  • Fast and simplified customs clearance procedures
  • A transport hub where selection and packaging and logistics service providers are available.
  • Cancel the restrictions on the paid registered capital of the parent company
Free Trade Zone in Shenzhen

Free Trade Zone (FTZ) is an area where goods can be landed, processed, manufactured or reconfigured and re-exported without the intervention of local customs authorities. The goods are subject to the current tariff only when they reach consumers in the province in which the zone is located.

Shenzhen FTZ
Shenzhen FTZ opened in 2015, in Qianhai District, Development Zone, this FTZ has the superior geographical advantage due to its developed transportation network that makes this FTZ near to Hong Kong, Macao, Guangzhou, Zhuhai, Dongguan, Zhongshan, and the Yangtze River delta cities.

Leading industries in Shenzhen FTZ include:

  • The finance industry

The Chinese government hopes to promote and develop the offshore RMB market in Hong Kong by leveraging Shenzhen’s geographical advantages as a pilot zone for cross-border RMB business. In addition, the Chinese government encourages compliant financial institutions to set up Chinese headquarters and branches in the Shenzhen FTZ.

China supports the establishment of finance leasing companies, auto finance companies, consumer finance companies and small loan companies in Shenzhen, and hope to promote innovation cooperation in the banking sector by promoting strategic transformation of financial institutions and deepening financial cooperation in Hong Kong.

  • Modern logistics industry

China aims to promote the depth of modern logistics cooperation between Shenzhen and Hong Kong by building a global logistics center with the help of Shenzhen FTZ and Hong Kong. This includes: forming a high-end logistics industry cluster, building a supply chain management center and shipping derivative service base that have important influences in the Asia-Pacific region, and strengthening the manufacturing service capacity of production organizations in the Pearl River Delta.

  • Information services industry

China hopes to build Shenzhen FTZ into a region with highly developed information transmission services by formulating an overall plan for information infrastructure construction, developing software, information technology services and information content services and accelerating the integration of the Internet economy and the real economy.

  • Technical services and other professional services industry

China is making efforts to provide professional service resources, and is building regional science and technology innovation service centers and productive professional service bases.

Free Trade Zone in Beijing

Free Trade Zone (FTZ) is an area where goods can be landed, processed, manufactured or reconfigured and re-exported without the intervention of local customs authorities. The goods are subject to the current tariff only when they reach consumers in the province in which the zone is located.

Beijing FTZ
Different from Shenzhen and Shanghai FTZs which are more interested in Finance, Beijing pays more attention to Innovation, fin-tech and services industry.

The characteristics of Beijing FTZ:

  • The financial sector is more open to foreigners
  • Supporting Trade Innovation and facilitation
  • Reducing the difficulty of integrated development and international trade
  • Make it easier for high-end talent to obtain visas
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