Ningbo's development of open economy in past decade
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- Category: Ningbo News
- Published: Thursday, 28 February 2013 06:54
Since China initiated the reform and opening up policies, Ningbo seized the opportunity to set up the strategy of "developing Ningbo with an open economy", consolidating the momentum for stable and rapid economic development. Ningbo's open economy witnessed a breakthrough after the 16th CPC National Congress in 2002. The open economy, with its expanding scale and improving quality, is playing an active role in driving the rapid and sound economic and social development.
From 2002 to 2011, Ningbo's annual foreign trade volume rose from $10 billion to nearly $100 billion, an increase of nearly ten times. Ningbo encouraged foreign investment ten years ago and now it has stepped toward smarter project selection. Currently, it has attracted a large number of high-tech projects and branches of the Fortune 500 companies. The foreign investment in actual use exceeds $ 22 billion, 4.4 times over the past 25 years. The annual overseas
investment rose to $1.1 billion from $12 million, an increase of nearly a hundred times. Ningbo has become a leading outsourcing service provider in China and it is working hard for the title of "Top Provider of Service Outsourcing in China". Meanwhile, the city continued the construction of development and opening zones, making Ningbo a city with all types of special customs surveillance zones.
Currently, Ningbo ranks sixth among Chinese cities for economic openness, and it has been listed as china's top 10 Cities for Investment. It ranks seventh in the China's top 100 cities of foreign trade, and second for its structural competitiveness. The past decade since the 16th CPC National Congress witnessed the most rapid, effective, and significant development of Ningbo’s open economy in.
In retrospective, the 10-year's development of Ningbo's open economy is mainly manifested in the following five aspects:
First, the structure of international trade is optimized and international competitiveness improved. The development of international trade in the past decade is mainly reflected in the following four aspects: Firstly, Ningbo sees a growing foreign trade business. In 2011 Ningbo boasted more than 12,000 international trade companies, creating more than two million jobs, which means there was one out of every four people in Ningbo was engaged in foreign trade or foreign trade-related job. The international trade volume per capita tops $10,000, exceeding Italy and Japan. 140 Ningbo-based companies reported the export volume of over $1,000. Secondly, Ningbo has a more diversified market. Ningbo has trade relations with 221 countries and regions. While maintaining the stable trade growth in traditional markets such as the EU, the United States and Japan, it saw remarkable growth in emerging markets. In 2011, Ningbo's export volume to emerging markets amounted to $29.094 billion, accounting for 47.8 percent of the city's total exports in the past five years. In the past five years Ningbo saw average annual growth rate of 19.2 percent in exports to emerging markets, 3 percentage points higher than the city's average export growth rate and 5.5 percentage points higher than the average growth rate of exports to traditional markets. Ningbo currently has 9,619 companies dealing with the emerging market while in 2002 the member was only 1,818. Thirdly, the quality of the exporting products is significantly improved. The export of electromechanical products was further enlarged to 55.6 percent of the total export in 2011, 8.6 percentage points higher than in 2002. The export of the brand name products rose to above 16 percent. Besides, 20 local brands have been listed by the Ministry of Commerce as "Selected Brand Names in Exports to be Fostered and Developed with Priority", outnumbering other Chinese cities. Fourthly, the trade patterns are further optimized. General trade continues to feature the international trade in Ningbo. The general trade exports and imports in 2011 accounted for 78.6 percent and 68.1 percent of the city's total trade volume respectively, 30.3 and 10.3 percentage points higher than the national average. The imports accounted for 38.45 percent of the total general trade volume, with an increase of 5 percentage points compared to 2002. At the same time, the processing trade, service trade, entrepot trade, and bonded trade have seen considerable progress.
Second, Ningbo has achieved a transformation from seeking foreign investors to selecting foreign investors. While keeping the foreign capital utilization in a large scale, Ningbo strives to improve the relevance and effectiveness of foreign capital through various forms of investment programs. Ningbo strives to attract foreign investors through continuous efforts to improve investment environment. Ningbo prioritizes the introduction of high-quality foreign investment projects in the field of advanced manufacturing and modern services, aiming to promote the optimization of the structure of foreign investment and its function in the development of economic restructuring in Ningbo. During the past five years, the foreign capital in actual use amounted to $12.38 billion, exceeding the total figure of the past 25 years. The foreign capital utilized in the tertiary industry in 2011 accounted for more than 35 percent, 15 percentage points higher than in 2002. The single scale of foreign investment projects have been expanding. The worth of more than 90 percent foreign-funded projects in 2011 exceeded $ 10 million whereas the average size of the foreign investment projects in 2002 was $4,810,000. In the past decade, Ningbo attracted more than 50 projects from the Fortune 500 companies. In 2011, Ningbo, together with Hong Kong and Xiamen, was listed as the top three cities with investment value.
Third, Ningbo adopted "Go global" strategy in seeking restructuring and developing of foreign economic cooperation. Over the past decade, Ningbo achieved two significant breakthroughs in foreign economic cooperation. The first is the transition from foreign labor service cooperation to the overseas engineering contracting at the beginning of the "11th Five-Year Plan". The second is the transition from overseas engineering contracting to the combination of foreign investment and overseas project contracting by the end of the 11th Five-Year Plan. In 2011, the newly approved overseas investment of Ningbo totaled $1.1 billion, nearly a hundred times of 2002. The turnover of overseas contracted projects and labor service cooperation hit $1.1 billion, which is nearly six times in 2002, and the average annual growth registered 19 percent. By the end of 2011, the foreign investment projects in Ningbo totaled 1,428, and the overseas Chinese investment amounted to $2.69 billion, leading other quasi-provincial cities in China. Ningbo has 91 overseas investment destination countries and regions which mainly distribute in Hong Kong, Japan, Korea and Southeast Asian countries, Britain, France, Russia, Europe and the United States and so on. Covering a wide range of fields, Ningbo has formed a major framework of investing in the manufacturing sector or developing mineral resources in developing countries, and setting up a marketing network and the pattern of the R&D institutions in developed countries. Private companies are playing a leading role in overseas deal. Joyson Investment Holding's purchase of German auto supplier Preh and the Ningbo-based Evergreen Industry Holding Group's acquisition of a Canada-based mineral exploration business make two remarkable mergers launched by Ningbo-based companies.
Fourth, Ningbo witnessed the rapid growth of service outsourcing. Service outsourcing started in 2008 in Ningbo. To boost the development of the service outsourcing industry, Ningbo made a developing strategy, built a service outsourcing center, opened the college of service outsourcing, and issued a series of policies to support the service outsourcing industry. Meanwhile, to consolidate the foundation of the service outsourcing, Ningbo vigorously promoted the service outsourcing demonstration zone and invited the well-known domestic and international service outsourcing enterprises to open branches in Ningbo. The efforts contributed to the sustained and rapid development of service outsourcing. Ningbo earned service outsourcing contracts worth 8.564 billion yuan in 2011, including offshore contract of 381 million yuan, a year-on-year increase of 31 percent and 40.1 percent, respectively. Contracts totaling 6.088 billion yuan have been implemented, including $280 million as offshore service outsourcing. By the end of 2011, Ningbo had 608 service outsourcing companies, creating 25,700 jobs. The four service outsourcing demonstration zones located in High-tech Zone, Yinzhou, Beilun and Jiangdong districts take up more than 60 percent of the total business and offshore business. Moreover, Ningbo’s booming service outsourcing has attracted top companies home and abroad, including India's Tata Group, Huawei Technologies, IBM, Disney animation, Insigma, and IWC data. Ningbo has become one of the best service outsourcing providers in China.
Fifth, the open economy in Ningbo has kept a rising momentum. Since 2002, a series of development and opening zones in Ningbo has been get approval from the central government, including Ningbo Export Processing Zone, Ningbo Bonded Logistics Park, Zhejiang Cixi Export Processing Zone, National Hi-Tech Industrial Development Zone, Ningbo Meishan Bonded Port Lishe Bonded Logistics Center, and Ningbo Petrochemical Economic and Technological Development Zone. Up till now, Ningbo boasts 10 state-level development and opening zones, leading other cities with its various special customs supervision zones. Meanwhile, Ningbo established 11 development and opening zones at provincial and municipal levels. In the past decades, these development zones at all sizes had been playing leading roles in Ningbo’s open economy. Relying on the regional, functional and industrial advantages, these zones serve as leaders and platforms in attracting foreign investment, optimizing the industrial structure, leading technology and mechanism innovation. At present, Ningbo's development zones utilize half of the total foreign capital of Ningbo. The total import and export volume takes up 60 percent of the total in the city, creating 60 percent of the total industrial output and industrial added value and paying 80 percent of the tax in large-scale business in Ningbo.
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Ningbo attracts Fortune 500 investment
As business leaders in various fields, the Fortune 500 companies represent the highest level of economic development in the world. The investment from the Fortune 500 plays an active role in boosting the industrial development of a city. As the Fortune 500 companies usually have strict requirements over the destination cities of their investment, the investment from the Fortune 500 indirectly reflects a city's urban investment environment. Ningbo has been working hard to attract investment of the Fortune 500, and made apparent progress. Over the past decade, more than 50 projects from the Fortune 500 companies settled in Ningbo. By the end of last year, the Fortune 500 had invested in a total of 87 projects, covering advanced manufacturing, business services, real estate development, modern agriculture, and so on.
Home to a large number of diverse and dynamic private companies, Ningbo successfully hosted the forum of "Dialogues between Chinese Private Enterprises and the Fortune 500 (2012)". Ningbo government proposed two strategies in promoting the tie between local companies and their international counterparts. The first is to promote the integration between the best economic resources in the world and Ningbo’s local economy. With their best and the most widely used commercial resources, the Fortune 500 companies show a keen interest in China's huge domestic market and favorable investment environment. As local private companies are seeking global market expansion, the strategy to promote bilateral cooperation, resource sharing and co-development shows a solid foundation and promising prospect. The second is to promote the combination of Fortune 500 industries with Ningbo's key industries. Ningbo has been focusing on the topic of the automobiles and auto parts when hosting the "Dialogues between Chinese Private Enterprises and the Fortune 500" in 2011 and 2012. The two forums had drawn wide attention and active participation of both top international companies and local businesses.
