When Intel decided to open a $200 million factory in Chengdu, China, the announcement sent many economic developers in the West scouring for a good map of China. After all, Chengdu is one of 38 major cities in China with a population of more than 1 million.
China is not only the world’s fastest growing economy, but home to the world’s largest population. Foreign direct investment in China soared to $55 billion in 2004. Having a strong presence in this dynamic and growing market is not an option anymore. It’s a necessity.
China is also the world’s fastest growing automobile manufacturer. Every auto company is either building or expanding operations there.
General Motors is expanding its Shanghai GM and SAIC-GM-Wuling manufacturing facilities to produce 300,000 vehicles per year.
This expansion in the Liuzhou, Guangxi Zhuang Autonomous Region will give GM’s mini-vehicle joint venture with SAIC and Wuling Automotive an additional 150,000 units of annual capacity, increasing total capacity to 336,000 units per year. Production is expected to begin in 2006.
GM also relocated its Asia-Pacific regional headquarters from Singapore to Shanghai earlier this year. Establishing its regional headquarters in Shanghai is recognition of how important China has become to GM’s plans to expand its global reach, according to the company.
Much of China’s manufacturing is centered in the Pearl River Delta, the Yangtze River Delta and around Shanghai in cities such as Jiangsu, Zhejian, Suzhou, Hangzhou, Wuxi and Kunshan.
The Ningbo Economic and Technical Development Zone is helping to promote investment in what is regarded as the “door to China’s Yangtze Delta.” The zone is attracting high-tech, information technology, precision instruments and new material manufacturers.
Hong Kong
Trade and investment between mainland China and Hong Kong have been greatly enhanced as a result of the implementation of the Closer Economic Partnership Arrangement. Hong Kong remains the premier Asian center of international commerce for logistics, given its huge seaport and impressive airport, and banking and fund management.
OppenheimerFunds Inc. (OPI) calls Hong Kong home, where it manages $150 billion in assets.
“Hong Kong was chosen as the Asian headquarters because of the attractiveness of the mutual fund market and the city’s strong, established regulatory system,” said Lavin Mok, managing director for Asia for OPI.
Hong Kong is poised to become an even more attractive wealth management hub thanks to proposed legislation that calls for offshore funds to be exempt from tax in respect to profits derived from leveraged foreign exchange trading and dealings in securities or futures contracts. The bill is expected to become law next year.
More than 1,000 U.S. companies have a presence in Hong Kong. Heavyweight companies include 3M, Apple Computer, Coca-Cola, Dow Chemical, DuPont, EMC Corp., Gillette, Hewlett-Packard, IBM, Johnson & Johnson, Microsoft, Nike, Polo Ralph Lauren and Proctor & Gamble.
“We chose Hong Kong as our regional headquarters because of its central location in Asia, infrastructure, telecommunications and first class international airport that will help us to stay close to the rest of the region, particularly China, one of our fastest growing markets,” said Steve Fitz, president of the Asia Pacific and Japan region for EMC Corp.
Singapore
With the Asia-Pacific region accounting for about $1 billion of the global biotechnology market, Singapore is positioned to be a key player.
Already one of the world’s leading pharmaceutical locations, Singapore aims to double its biotechnology production within the next 10 years.
Last year, Novartis opened its Novartis Institute for Tropical Diseases (NITD) in Singapore’s 2 million square foot Biopolis research facility. NITD is a public-private partnership between Novartis and the Singapore Economic Development Board.
NITD is focused on advanced biomedical research for neglected diseases, such as dengue fever and drug resistant tuberculosis.
“The Biopolis development underlines Singapore’s commitment to the biomedical sciences,” said Philip Yeo, chairman of the EDB Biomedical Sciences Group. “We are confident that the research done by our community of public research institutes and R&D laboratories of biomedical companies will contribute significantly to advancing human health care.”
Singapore is also recognized as one of the world’s leading semiconductor manufacturing locations.
Earlier this year, Hewlett-Packard (HP) set up its first Asia Pacific Integrity Server Research & Development (R&D) Center in Singapore to design and develop affordable next-generation servers for the global market.
The $12 million facility aims to create a server that meets industry standards based on the Intel 64-bit Itanium processor, which will be made commercially available by the end of 2006.
“The center is a cornerstone of HP’s ability to create differentiated products that meet customer demands for an entry-level server at optimal price-performance,” said Paul Chan, senior vice president and managing director for the Asia Pacific and Japan region for HP.
Locating the R&D facility near the existing server manufacturing site adds leverage to the current supply chain expertise available in Singapore, Chan said.
Means the article is accessible only to our magazine subscribers.
