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Why are so many foreign companies investing in Hohhot?
Hohhot is a culturally diverse city of 2.4 million people that is becoming a nexus of trade in northwest China.
In the past 4 consecutive years, Hohhot has had the highest rate of GDP growth among China¡¯s 27 provincial capitals. Last year alone, Hohhot¡¯s GDP jumped 33.3% from 40.6 billion yuan in 2003 to 60 billion yuan in 2004. The key industries driving this growth are the electronic information systems (40%), dairy (30%), and electric power (20%), including coal, solar and wind generated energy.
Hohhot¡¯s economic growth is driven by four key factors including:
- Strategic geographic location
- Valuable untapped natural resources
- Favorable government support
- Competitive workforce
Location:
- Inner Mongolia shares its border with 9 neighboring Chinese provinces to its east, west and south and with 2 countries to its north, Russia and the Republic of Mongolia.
- Convenient and quick access to two of China¡¯s major economic centers, Beijing and Tianjin
- 45 minutes by air to Beijing
- 12 hours by rail to the seaport of Tianjin for convenient import and export of products from North America and Southeast Asia
- Strategic land port to Central Asia, Russia, the Republic of Mongolia, and Europe
- Hohhot to Frankfurt, Germany by rail in 18 days
Resources:
Hohhot sits in the midst of China¡¯s ¡°resource belt¡±, providing valuable natural resources that fuel the energy demand across China, and provides raw materials for its factories.
Hohhot and its surrounding regions in Inner Mongolia provide:
- Rare Earth Minerals: 70% of China¡¯s (and 50% of worldwide) total rare earth reserves mined for use in petrochemical, electronics and mechanical industries
- Valuable Minerals: Gold deposits, iron ores, granite, and graphite
- Natural Gas: China¡¯s largest natural gas fields and over 600 Billion cubic meters of natural gas reserves
- Coal: Abundant source of coal used to supply energy needs across China. Supplies 1/5 of Beijing¡¯s electricity needs with its coal reserves
- Wool: 80% of the world¡¯s wool used for cashmere
- Dairy Products: Source of a majority of China¡¯s total dairy production with 2 of China¡¯s biggest dairy corporations, Meng Niu and Yili
Government Support:
As an autonomous, minority region in northwestern China, Hohhot enjoys many special incentives made available by China¡¯s Central Government:
- ¡°Go West¡± and ¡°Minority Region¡± Preferential Policies: These policies offer special financial and tax incentives, as well as relaxation of certain other government policies in order to encourage and boost foreign direct investment
- Economic Development Zones: 3 nationally approved Economic and New Technology Development Zones specializing in electronics, high technology, power production, textiles, dairy and food processing, and pharmaceuticals
- Export Processing Zone (EPZ): Provides ease of import and export, with dedicated custom offices and bonded factory warehouses.
- Factories in the EPZ that export at least 51% of their production enjoy exemptions from VAT and ease of logistics support.
- Products manufactured in the EPZ can undergo custom inspection within the EPZ and will not have to be re-inspected before leaving China for destinations in North America, Europe or other global locations.
Competitive Workforce:
Hohhot is the educational hub of the region, supplying highly trained, affordable laborers, engineers, professionals and managers for its industries.
- Regional Axis of Education: With 17 universities and colleges, Hohhot graduates over 14,500 undergraduate and graduate students each year, providing an abundance of local, highly educated recruits
- MBA Programs: 2 MBA programs providing experienced managers with the management training necessary to support the recruiting needs of foreign companies.
- Proximity to Beijing and Tianjin: The nearness of these two urban centers provides Hohhot-based companies with many convenient options when hiring employees and managers
- Highly Skilled, Lower Costs: Leveraging Hohhot¡¯s lower cost of living, her labor costs are on average 10 ¨C 20% lower than comparable labor from other parts of China.
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