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Understand-China 2011 Update Complete 7/25/2011

understand-china.com1ChinaBlog is pleased to announce the new and improved Understand-China.com. Through extensive research, the website has been refreshed and updated to provides the most comprehensive and up-to-date information available for businesses and investors looking to do business in the China. Understand-China’s vast network now contains over 250 pages of information with additional features and has taken more than 300 hours and 6 weeks to update.

Understand-China continues to be the only one-stop-shop website providing concise and relevant information for companies looking to do business in China, invest in the Chinese marketplace, set up greenfield operations in one of China’s industrial regions, or understand the Chinese manufacturing industry.  Updates include new data for the 24 top regions including statistics for each of their Foreign Direct Investments (FDI), Gross Domestic Products (GDP), Logistical Data, Real Estate information, Industrial Expenses, Labor Costs and various other categories of data. For several excellent examples of updated data, please view the provincial profiles of Beijing, Shanghai, Shenzhen, Tianjin, Hong Kong. Understand-China also includes twenty other provinces, special economic zones and Chinese special administrative regions.

Please let us know what you think of the update!

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China Continues to Grow Beyond Low Cost Labor 11/14/2010

A recent article I found online discusses a very important topic: China moving beyond just a source of cheap goods and low cost labor.  Despite what you may have heard and read, China has become a very advanced economy from what it once was.  Many international firms like GE, Motorola, and General Motors have invested significantly to develop large research and development centers throughout China.  The article discusses a recent survey conducted by KPMG which shows a growing interest among global manufacturers to leverage the large pool of skilled engineers and other highly trained individuals to increase the amount of “value-add” activities that there businesses are conducting in the region.

I’ve inserted a brief form the article below:

“China and India have become more than just centers for low-cost manufacturing for some global companies. The survey showed that a significant percentage of global manufacturers are willing to source research and development and the manufacturing of goods where important intellectual property is involved has increased to 29 and 33 percent, respectively.

‘If you would have looked at the survey three years ago, it would have been zero percent…no one would have ever done product innovation or R&D in India or China. Many really sophisticated companies are saying they’ll make it in China if they’re selling it in China.'”

I actually don’t subscribe to the theory that three years ago none of these global manufacturers were eyeing China as a potential R&D destinations – 5 years ago I was working inside GE’s medical R&D center in Wuxi, just outside of Shanghai on a number of different projects that had been underway for quite some time.  What I do support however, is the notion that most manufacturers are only recently beginning to view China as a potential destination for R&D investment.  Especially as more and more companies are eyeing the Chinese domestic market for their goods.  Local R&D will benefit these companies in many ways, especially when it come to modiyfing existing designs to suit Chinese market demands and applications.

I’d love to hear more of your thoughts on this…please feel free to share!

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Guangzhou and Guangdong: What is the difference? 10/21/2010

Guangzhou and Guangdong: What is the difference?

In today’s post I will demystify the difference between two similar-looking words, with two very different meanings. Guangdong (pronounced Gwong-dong) is Southern China’s economic center and one of the wealthiest provinces in China.  Guangzhou (pronounced Gwong-jhoe) is the largest city in the Guangdong province and has been China’s leading international commercial port for over 2,000 years. Guangzhou is the political, economic and cultural center of the province. (See map below)

Guangdong Guangzhou
Type Province City
Location Southeastern China Coast Guangdong Province
Population 95.44 Million USD (2008) 7.6072 Million (2006)
GDP 572.12 Billion USD(2009) 133.5 Billion USD (2009)
FDI 19.2 Billion USD (2009) 11.244 Billion USD (2009)


How did Guangzhou become so strong?

Guangzhou, also called Canton or Kwangchow, is one of the biggest economic zones in China (3rd to be exact), thanks to its proximity to the extremely successful regions of Hong Kong, Macau and its premier access to the Pearl River Delta. The success of these regions began spilling over into Guangdong when labor rates began to increase with the cost of living in Hong Kong. Guangdong’s labor wages are about half of the average monthly wage in Hong Kong.

Guangzhou has grown quickly by offering investment incentives that have helped to attract over 170 of the world’s top 500 multinational companies. The foreign enterprises contributed 11.244 Billion (USD) in foreign capital in 2009; which is over half of the entire province’s FDI. Guangzhou is now the main manufacturing core of the Pearl River Delta region.

Building strength over time, Guangzhou earned 133.5 Billion (USD) GDP in 2009. That is nearly 25% of the entire province’s gross domestic product! With this accomplishment, Guangzhou became the first city in Mainland China to have a per capita GDP of over 10,000 USD.

There is so much going on there!

Guangzhou is also home to the China Import and Export Fair (aka the Canton Fair) which takes place every October and April. The Canton Fair is by far China’s largest and oldest trade fair that been running for over 50 years. Each fair now stretches over three days in order to fit in all of the participants and exhibitors.

Some impressive stats about the Canton Fair:

>200,000 Buyers
>200 countries in attendance
>23,000 Exhibitors
>55,000 Booths
>200 Football Fields in Area (>1.1 Million Sq. Meters)

Some helpful resources I found:

Guangdong Manufacturing & Investment Guide

Guangzhou Government Resource

Invest Guangzhou

Canton Fair Resource

Another China Resource

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Understand China Official Launch! 9/29/2010

Today marked the Official Launch of Understand-China.com.  If you are reading this, you have already realized that the site is up and running, but we were excited to make the announcement nonetheless.  After more than nine months of ongoing development, twelve hundred hours of research and over 250 pages of detailed information, Understand-China is the leading authority on doing business in China.

The site is intended to assist business looking at investing in China by providing a one-stop resource for all of the information they need to be successful in China. The Understand China site breaks down pertinent manufacturing and investment information by major investment region. The site includes detailed information on Beijing, Shanghai, Shenzhen, Tianjin, Hong Kong and twenty other provinces, special economic zones and Chinese special administrative regions.

Enjoy!

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Is it time to leave China? 8/23/2010

A great article in the Wall Street Journal this morning titled “Southeast Asia Tries to Link Up to Compete”.  Like many others, the authors discuss the impact of rising wages in China.  What I found most interesting though, is that these authors brought up a good point that I have been sharing with our customers for months – the point that, despite these wage increases, China is still the best option for many companies sourcing goods from low cost regions.  I have chatted with tens of companies over the last few months about Vietnam, India, etc.  While these geographies do have very competitive labor rates, often significantly cheaper than China’s, they lack the infrastructure, skilled workforces, and production experience required to support robust supply chains.

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