Yangtze River Delta (YRD)

Yangtze River Delta

General Background

The Yangtze River Delta (YRD) metropolitan region（長江三角洲大都市圈）refers to 16 cities in Shanghai, southern Jiangsu, eastern and northern Zhejiang, including Shanghai（上海）, Nanjing（南京）, Suzhou（蘇州）, Wuxi（無錫）, Changzhou（常州）, Yangzhou（揚州）, Zhenjiang（鎮江）, Nantong（南通）, Taizhou（泰州）, Hangzhou（杭州）, Ningbo（寧波）, Huzhou（湖州）, Jiaxing（嘉興）, Shaoxing（紹興）, Zhoushan（舟山）and Taizhou（台州）, of which Taizhou（台州）was being included as part of the YRD metropolitan region starting from August 2003.  

The YRD only covers an area of 110,915 sq.km which is about 1.1% of China's total land area.  However, its total population at the end of 2010 stood at 107.6 million (according to the latest census), accounting for about 8% of China’s total.  YRD’s GDP reached RMB7,067 billion in 2010, representing 17.6% of the whole China economy.  The YRD is an important economic powerhouse of the Chinese mainland, with Shanghai being China’s financial and logistics center, and Zhejiang and Jiangsu an important manufacturing base.

Economic Performance and Policy

The YRD’s economic performance in 2010:

• GDP amounted to RMB7,067 billion or 17.6% of China's overall economy.
• The average GDP growth reached 12.6% in real terms.
• GDP per capita was RMB65,664, compared to about RMB29,992 for China as a whole.
• Retail sales amounted to RMB2,396 billion, 15.5% of China's total.
• Industrial output reached RMB14,686 bllion, 21% of China's total.
• Exports amounted to US$582.7 billion, 36.9% of China's total.
• Actual foreign investment amounted to US$45.5 billion, 43% of China’s total.
  

Major Economic Indicators (2010)

Note: a) GDP per capita of the YRD is calculated based on the GDP and population figures in this table.
          b) Industrial output of industrial enterprises with an annual sales income of over RMB 5 million.
Source: Statistical Yearbooks of Shanghai, Jiangsu and Zhejiang, 2011 

The YRD’s long-term economic policy focuses include:

• To strengthen regional economic integration of YRD cities, mainly in six areas, including transportation networks, unified market, environmental protection, information sharing, financial cooperation and flows of talents.

• To jointly build the inter-provincial tourism area in the delta region. The cities will work together in promoting regional tourism brands, integrating tourism resources.

• The region will develop into an economic centre with the strongest integrated competitiveness. Development of the tertiary industry, such as logistic industry and outsourcing services, will be strongly supported.

• In April 2009, the State Council issued The Opinions of Promoting Shanghai’s Development of Modern Service and Advanced Manufacturing Industries and Establishing International Financial and Shipping Centres. Measures will be taken to quicken the pace of establishing Shanghai as both an international financial centre and international shipping centre.

Industries

The YRD’s manufacturing industries are developing rapidly, partly as a result of the influx of foreign investment. Cities that have relatively large industrial production include Shanghai, Suzhou, Wuxi, Hangzhou, Ningbo and Nanjing. The YRD’s total industrial output amounted to RMB14,686 billion in 2010, accounting for about 21% of China's total.

While the Pearl River Delta excels in the assembly of light consumer goods, the YRD is more focused on heavy industries such as machinery, chemicals and other upstream industries, i.e. the production of raw materials, intermediate goods and capital goods including electronic parts, textile and chemical fibre etc. For example, in terms of volume, Shanghai and Jiangsu together accounted for more than 76.3% of the national total output of micro-computers; Jiangsu and Zhejiang together accounted for 77.5% of China's total output of chemical fiber and 42% of total output of textiles in 2010. Within the YRD region, while Jiangsu and Zhejiang are major producers of garment, textile, chemical fiber, and machinery, Shanghai also produces a relatively large share of chemicals, machinery and motor vehicles.  In 2010, Shanghai alone produced 16.7% of China’s total output of cars.

The YRD's private sector is the most developed in China. Many indigenous private enterprises in the YRD have developed strong brand names in their specialised areas and become market leaders in China. These include Youngor, Shanshan, and Romon.  Jiangsu has the largest number of private enterprises in China. At the end of 2010, the total number of private enterprises in Shanghai, Jiangsu and Zhejiang together amounted to 2.39 million, or 28.3% of the national total.

Foreign Trade

The YRD is an important export base in China. Despite the dampening effect of the financial crisis on external demand, from 2007 to 2010, YRD's exports rose by an average of 9% per annum to US$582.7 billion in 2010, which accounted for 39.6% of China's total exports, up from 36.9% in 2007. Major export items included machinery, transportation equipment, electrical equipment and parts, garments, textile and raw materials. Major export markets included US, EU, Japan, Hong Kong and South Korea.

From 2007 to 2010, YRD's imports grew by an average of 10.9% per annum to US$445.5 billion in 2010. As a manufacturing base, major imports of the YRD included raw materials, chemical products, electrical equipment, and parts and components.  Major import sources included EU, Japan, US, Taiwan, South Korea and Hong Kong.

Foreign Investment

FDI inflow amounted to US$45.52 billion in 2010, or 43% of China's total.  Hong Kong is the leading source of FDI in the YRD.  Other major investors include Taiwan, Japan, Singapore, US and South Korea.

There are over 90,000 foreign-invested companies in Shanghai, Zhejiang and Jiangsu. Major foreign companies in the YRD include General Motors, Shell, Matsushita, Exxon, Siemens, Sony, Volvo and LG etc.  Foreign investment is more concentrated in Shanghai, Suzhou, Wuxi, Nantong, Ningbo and Hangzhou.

Foreign investment in the YRD is mainly engaged in the manufacturing sector, such as the manufacture of computers, mechanical and electrical products, hardware and chemical products etc. Relocation of high-tech industries to the YRD is particularly prominent. In particular, many Taiwan businesses have shifted their high-tech products manufacturing to the YRD region in recent years. Taiwan's high-tech investment is concentrated in Kunshan, Suzhou, and Wuxi, of which many of these companies are engaged in IT products and high-tech electronics such as PCs, semiconductors, integrated circuits, digital cameras and LCD monitors etc.

Consumer Market

The YRD is one of the mainland’s largest and most sophisticated consumer markets. The relatively high income level in the YRD, combined with a large inflow of tourists, resulted in strong consumer demand. Its combined population of 107.6 million contributed to total retail sales of RMB2,396 billion in 2010, which was about 15.5% of China's total.

The consumption pattern in the YRD is also moving towards services.  The relative share of urban household expenditure on items like transportation and communications, education, cultural and recreation services have increased relative to items like food and household articles.  The trend for rising expenditure on new types of durable goods, such as cars and computers, is also salient.

Besides a huge consumer market, the YRD also has major distribution hubs. Besides Shanghai which has strong influence on product and brand promotions in the entire Chinese consumer market, there are major wholesale marts within or close to the YRD, such as the wholesale marts of small commodities in Yiwu and textiles in Shaoxing.

The YRD's retail sector is highly developed. Major foreign-invested retail enterprises that have presence in the YRD include Carrefour from France, Metro from Germany, Park’N shop from Hong Kong, and Trust-Mart from Taiwan.  The retail distribution landscape in the YRD is also changing rapidly.  Apart from traditional department stores, various forms of modern operation such as chain stores, supermarkets, hypermarkets, warehouse type markets and convenience stores are prolific. Modern and upmarket shopping malls are also flourishing.

Infrastructure Investment

YRD's transport infrastructure is highly developed. As at the end of 2010, total length of expressways in Shanghai, Jiangsu and Zhejiang totalled 8,217 km, accounting for 11% of China's total. In 2010, total passenger and freight traffic of Shanghai, Jiangsu and Zhejiang accounted for 14.2% and 13.5% respectively of the national total. One of the YRD's long-term policies is to integrate its transportation network construction.

Airport density in the YRD is among the highest in the world. As one of the largest airports in China, Shanghai's Pudong International Airport, with the third runway opened in 2008, can handle about 36.5 million travellers a year.   Among the 16 cities in the YRD region, there are a total of ten airports.

The YRD is also an important gateway for waterway transportation. In 2010, out of the top ten ports in China in terms of containers throughput, two of them are located in the YRD, namely the Shanghai and Ningbo-Zhoushan ports. The port at Shanghai is not just the largest container port in China but also the largest in the world, handling over 29 million TEUs in 2010. Ningbo-Zhoushan port handled 13.1 million TEUs in 2010.

Highway transportation is the main transportation mode within the YRD region. For example, in 2010, highways accounted for 95% of Jiangsu's total passenger traffic and 65% of total freight traffic. A network of highways linking all cities in the YRD is being constructed to shorten travelling times among different cities within the delta, giving rise to a "metropolitan region within three-hour drive".