Southern China’s Pearl River Delta Region
As years pass, rapid economic development in China has created major opportunities in two areas; a fast expanding market for goods and services, and a complex production base for manufacture and retailers.
Successful companies realize that China is not one market, but a series of regional markets. Currently most foreign companies concentrate on the Pearl River Delta region (PRD) on the southern tip of the Chinese Mainland, closely connected to Hong Kong. Being the closest city Shen Zhen, leaving at close to noon time, we reach Shen Zhen just in time for lunch. We were told my the guide that Hong Kong citizens would come to Shen Zhen for shopping and other activities. Being located in the Chinese Mainland, its products and services are a lot cheaper as compared to those sold in Hong Kong. This can basically explains why Hong Kong citizens travel to Shen Zhen for shopping spree etc. Not only is Shen Zhen a few hours drive away, one could spend the same amount but get at least twice as much as what you get back in Hong Kong!
The Greater Pearl River delta offers the combined advantages of Hong Kong, with its international services and ease of business, and the PRD, which offers quality low-cost manufacturing and a growing consumer market. The PRD is also home to the Chinese mainland’s wealthiest consumer and highest spenders. Per capita GDP and retail sales in the Greater Pearl River Delta are significantly higher than the Chinese mainland’s other regions, including the Yangtze River Delta region around Shanghai, and the Bohai region around Beijing.
Lunch was brought to us too shortly after the sumptuous breakfast; many of us could hardly eat any further. We had a total of 8 dishes for lunch again. We didn’t manage to finish much of the dishes, most of us were already calling for help and feeling stress as each dishes were being brought up. I got to comment that the food in Hong Kong and China are really saltish and oily. I really do wonder what is their kidney failure rate like, gosh.
After lunch we head off straight to material city of Shen Zhen in a coach. On the way there, the splendid guide explains to us a few historical landmarks and historical happenings to us. I must really say, he is one of the rarest tour guide you can find around, he was really helpful and nice to all of us through the stay in China. =) Xiao Deng you are the best=)
China South International Materials City
Our Welcome Sign
\Material City =_)
upon arriving at material city
Thank god there is tram to bring us around, the city is huge i swear
The stores concept within material city
China South International Industrial Materials City “China South City” is a RMB 2.6 billion landmark project and industrial materials trading flagship for both China and overseas markets. The project is being developed on a 1.5 km square site at Pinghu Logistics Base in Shenzhen. China. It comprises of 5 trade centre, namely the textile and clothing materials trade centre, the leather and accessories trade centre, the metals, chemical and plastic materials trade centre, the printing paper products and packaging materials trade centre and the electronic accessories trade centre. There are also other supporting facilities such as an office buildings, warehouses, hotels to hold the buyers, residential area, aiming at creating an interactive environment that will be home to thousands of industrial materials players, clubhouses etc. It is highly accessible, as its well connected by expressways etc. This project is jointly developed by five prominent investors from the Carrianna Group, Man Sang Group, Kin Hip Metal & Plastic Factory Ltd, Luk Ka International Ltd, and Kings Faith International Ltd. Its investors are influential leaders in their respective industries with strong financial background, prominent business reputation and in-depth experience in market development and operations.
Facilities and Services are:
1. Warehousing and logistic Services
2. E-commerce
3. Business Start-up Consultancy and License Application Services
4. Tax and Accounting Consultancy Services
5. Restaurants
6. Hotels
7. Banking Services
8. Housing Facilities
9. Public Transportation Network
10. Industry Associations Office
Presentation time
Textile And Clothing
Shenzhen is one of the leaders in the China’s textile industry. In 2004, its textile and garment exports reached USD 10 Billion, this is definitely good enough to support that there is a high demand for imported textile materials form Shenzhen.
Leather And Accessories
China accounts for 60% if the world’s shoe production. Guangdong contributes to nearly half of the China’s total output. Guangdong in this basis is therefore regarded as the world’s largest shoe manufacturing and export base. The shoe production in PRD area is nearly 3 billion pairs per year, accounting about half of China’s production. For the few days stay in China, during our market survey we actually found out that we can get heels as cheap as S$4, a converse shoe for S$10, boots at around S$6. Sometimes I wonder why we actually pay so much and not feel the pinch in our own pocket when we shop. When I am back these few days, every nice things I chance upon, I feel that it’s expensive. I suppose I take some time to adapt to the “price culture” in Singapore.
China South International leather and accessories Trade Centre is one of the 5 raw materials trade centre in China South City.
Metals, Chemicals and Plastics
The demand for metals has increased rapidly over the year due to globalization and development of manufacturing industries in China. Guangdong is still the leader in industries that are closely related to paints, plastics, rubber, leather and chemicals. Beside the raise in demand for furniture, home electrical appliances, computer accessories and telecommunication equipments all strengthen Guangdong’s leading position in the field.
Relevant information for businessman who is looking into investing here in material city* - According to the report “ Industrial Plastic Materials Market of China” announced recently by United States Business Communications Company, the consumption of industrial plastic materials of China was 4.4 million tones in 2005, representing a rapid growth of 18.9% compared to the previous year. It is estimated that the consumption will increase to 6.7 million tones in 2010, with an average of 8.9% annual growth. (Looks pretty good huh?)
Printing, Paper Products And Packaging
This market in China has also shown growth over the years. The shortage of supply in the paper industry is especially significant and requires massive import. Guangdong province accommodates over 20,000 printing enterprises and ranks number one in China. They are not only ranked fastest growing enterprise but also best equipped among the 90,000 printing enterprise in China.
The industry development trend is that this industry has been moving aggressively towards medium-to-high end. Diversity, easy-to-transport and easy-to-store are the latest market trend. New technology, equipments, process and materials are being explored and utilized with digital printing and undergoing rapid development. With the growing demand for less pollution, environment friendly paper, printing and packaging products are gaining significant popularity. Through out the trip, we realize that the government has done much to push industry set up in China to reduce pollution, for example fines to companies, and even in our daily necessities, like during the hotel stays, hotel has request customers to not change bed lining regularly if its not dirty.
With the state council of the Chinese government removing its requirement for business runners in the printing industry to apply for special operation permits since November 2002, the entry barrier to the industry is further lowered.
Upon China’s entry into WTO, the tariff for over half of the products of the printing and packaging industry will be gradually lowered. The reduction is quite significant, for example, tariff for printing equipment is being lowered by over 20%.
Electronics
China South Electronic Accessories Trade Centre is now offering numerous display units. In the next stage, the main buildings of China South Electronic Accessories Trade Centre will be expanded based on the existing scale of operations. It will eventually become one of the most comprehensive specialized markets in the industry.
After the trip to China, I personally feel that there is a lot of room for business opportunities in this industry in China. They are still not up to date in many electronic devices, and there are definitely profitable opportunities in this industry in my personal opinion. =) Like we all know China has squatting toilets instead of toilet bowls. And you can just hardly find an automatic hand wash or dispenser.
Logistics Services
Logistics services of China South City are provided by China South National Express Logistics (Shenzhen) Co. Ltd. It is a top class logistic service provider, with well-developed distribution network comprised of sea, land, air and railway transportation along with other well-equipped facilities. It offers a one-stop integrated logistic solution and provides extensive, reliable and quality services at a cost effective rate.
China South City Bonded Warehouse is 5,500 m sq in total construction area. It is a modernized storing facility and is one of the hardware auxiliary facilities inside the city. The warehouse is designated for the use of both domestic and international proprietors, and as a support to the logistics and trading platform. Many business has made use of the bonded warehouse scheme to reduce their company’s expenditure on tax as shared by companies like Aztec.
E-commerce
China’s South City is well-equipped with advanced e-commerce system, which is developed by China South Intimex Technology (Shenzhen) Co. Ltd. Customers are able to enjoy a solution including system upgrading, daily data backup and system maintenance without investing in hardware development. The e-commerce system’s online quotation and information systems will automatically update pricing, market supply and demand, a s well as giving the latest product information of various industrial materials. Both sellers and buyers would utilize the e-commerce platform to conduct business-to-business transactions, with the third party logistics teams to help track the physical settlement of goods.
Hotels and Facilities
Grand City Hotel has a total of 379 spacious and exquisite rooms equipped with advanced computer network system and other amenities like IDD lines, in-room safe, satellite television, mini bar, voice mail and fridge. There are restaurant available that provides the best and famous Guangdong And Chaozhou dishes. KTV even are available, which comes along with Ritz Club, Sauna, massage etc. All these facilities aim to draw more buyers to come over to stay and consider longer about different purchases they had wish to make. Other forms of attractions are Purchaser Services Centre, Residential Area, Catering Services and Convenience store. Some of this are exactly what the suppliers are attracted to when they consider about renting an area to run business here in material city.
Networking and Business Opportunities
They have done their part to provide industrial materials players with business information and opportunities, and facilitating network through their effective trading platform and one-stop services as mentioned earlier. Between 2004 and 2005, they have invited more than 200 overseas delegations to meet with their proprietors to discuss business opportunities. China South City has plans for furthering the business matching services and provides more opportunities to the business leaders from China and across the world. Through events, seminars and activities, the proprietors will be able to identify business opportunities and exchange ideas with business contacts.
Group photo time
After the day’s visit, we then head off for our dinner. We had yet again a different variety of dinner. Yes its again 8 dishes, gosh we were all certain that we would all put on weight by the end of the trip. After dinner, we went to the night market to do some market research. We were surprised that the goods in Shenzhen were as said many times cheaper then those sold in Hong Kong. Well, this would probably be due to the cheap labour used in China directly and no other export or import costs were included. We could simply purchase one t-shirt at the cost of S$6. So can you imagine how cheap that is as compared to shopping back here in Singapore? We were also told by the tour guide that, the workers were paid a few cents for each output made, if you are wondering how they can survive selling at such low price, you got the answer too. Cheap labour, low cost materials and a whole abundant resource available in China, they can definitely afford a t-shirt at S$6, and in fact it was actually considered very expensive if we were to count that to the ratio of the monthly salary of one normal factory worker in China. Their maximum pay can only come up to RMB 800. A ratio of 3:80 for on T-shirt is barely affordable to them.
The security at Shenzhen is not too good, as we have witnessed one stranger who was being pick pocketed just within a span of a few seconds right before our bare eyes. Yet that poor victim felt nothing. Beggars were a common sight in this area; they will follow you and pester you for some “bread” equivalent to money. We were all warned not to give them any, if you were softhearted and try giving to one; the rest of the gang will all come after you. On our way back to the hotel, we saw a row of beggars sitting at the roadside waiting for their next prey. There were also no police seen patrolling around the area. We headed back to the hotel safely after the market research, got ourselves change and head in to bed. We have another tiring day to go tomorrow, next stop GuangZhou.
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