BCECC Newsletter: Opportunities in China’s 2nd Tier Cities

There is more to China than its major cities Beijing, Shanghai, Guangzhou and Shenzhen (also called 1st tier cities). Over the last few years, China’s 2nd tier cities have shown a tremendous growth and, although still not very well-known to the Western world, they offer a lot of business opportunities for Belgian SMEs and are key cities in the development plans of the Chinese government.

In addition to the many business opportunities and rapidly increasing consumer spending behaviors, there are advantages, such as lower labor costs, less competition, less running costs for retailers, less pollution, and smaller but often better engaged partners in comparison with 1st tier cities. In this article we highlight the following three cities: Zhengzhou, Tianjin and Haikou.

Zhengzhou: important logistics hub in China, also with regard to the Belt & Road Initiative

Zhengzhou is the capital city of Henan Province in the central part of China with a population of around 10 million. With a rich culture, long history and a significant contribution to Chinese culture and civilization, it is called the cradle of Chinese civilization. The city is a major hub of China’s national transportation network, with railways connecting to Europe and an international airport.

The first direct train between Zhengzhou and Liège became operational on 24 October 2018. Before, companies in Zhengzhou had to send their products to nearby coastal ports to be shipped or use expensive air cargo flights for their export to Europe. The train service from Zhengzhou to Europe has brought numerous opportunities to the city and stimulated economic development.

Tianjin: China’s headquarter for manufacturing and hi-tech industries

Tianjin is one of the nine national central cities in China, with a population of around 14 million. Tianjin is more developed than a lot of other cities in China, due to its large seaport and because it is only 120 kilometers away from Beijing. It is also the intersection of the ‘Land Silk Road’ and ‘Maritime Silk Road’, the central parts of China’s Belt and Road initiative. It consists of railway connections with major transportation hubs in China and its sea port to connect with the rest of the world.

The economic development of Tianjin is high and it has advantages in natural resources, for example resources of oil and natural gas, sea salt resources, water resources, etc. Tianjin was known before as a manufacturing base in traditional industries, but in recent years it has been implementing a new industrial pattern focusing on innovation driven industries and hi-tech industries, such as electronic products (home electronics, instrument measuring products, computer products, etc.).

Haikou: the coconut city becoming the largest economic zone in China

Haikou is the capital and most populous city of the province of Hainan with a population of more than 2 million. It is located on the northern coast of Hainan. Hainan is the smallest and most Southern province of China, consisting of various islands in the South China Sea. Tourism plays an important role in Haikou’s economy, because of its tropical beaches and forests. Due to its tropical climate, Haikou is called the ‘Coconut city’.

On June 1, 2020, Chinese authorities released the Overall Plan for the Construction of Hainan Free Trade Port, a large-scale plan to transform the entire island into a Free Trade Port – making it the largest special economic zone in China. The Belgian-Chinese Chamber of Commerce (BCECC) will be a key partner at the 2021 China International Consumer Products Expo, which will take place from May 7 to May 10 2021. As a preparation for this event, Voka Mechelen-Kempen Chamber of Commerce & Industry (CCI) and the Belgian-Chinese Chamber of Commerce (BCECC) are planning a 3-day virtual trade mission. More information on this will soon be posted on the BCECC website.

BCECC has privileged relations with local governments and CCPIT in those three cities and has signed long-term cooperation agreements with some of them in the presence of HRH King Philip of Belgium and HRH Queen Mathilde. Please contact us in case you need any help.