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Beijing Investment Guide

Beijing's Economy

In 1995, the municipal economy enjoyed sustainable development in a quick tempo in that potential market and benefit were tapped. Statistics show that the gross domestic product (GDP) of Beijing in 1995 reached 138.51 billion yuan, an increase of 12.1 % over the previous year in terms of constant price. Per-capita GDP amounted to 12,941 yuan. The city's financial revenue in 1995 was 11.53 billion yuan, up by 21.8 % in terms of constant price.

Overall Economic Status

* Primary industry saw steady development while the status of agriculture as the basis of development has been further bolstered. An added value of 8.2 billion yuan was achieved in the year, which represented a 3.8% increase and accounted for 5.9 % of the municipal GDP.

* Secondary industry achieved an added value of 64.42 billion yuan, an increase of 10.1 % as against the previous year. Of the total, the added value of industry amounted to 49.32 billion yuan, up 12.8 %; the added value of construction industry amounted to 15.1 billion yuan, up 14.5 %. The added value earned by the secondary industry accounted for 46.5 % of the municipal GDP. The industrial production and sales reached 98.11% in 1995 as enterprises strengthened their capabilities to function in the market-oriented economy. The self-contained economic entities at or above the township level materialized a revenue of 15.87 billion yuan in terms of profits and taxes.

* Tertiary industry saw continued development with an added value of 65.89 billion yuan, up 15.6% compared with a year ago in terms of constant price. It accounted for 47.6 % of the municipal GDP. Service industry became mature as finance, tourism, real estate and information industries developed rapidly in the past year.


The industry in Beijing has forged a diverse economic structure and a coexistence of large, medium and small-sized enterprises. A large and encompassing industrial system has been established and the system boasts of a versatile auxiliary sub-system by claiming 406 out of a total of the 539 industrial trades officially classified in the country.

In 1995, the gross industrial output reached 125.92 billion yuan thanks to the adjustment within the industrial framework. Auto, electronics, construction and high-tech industries have played a key role in promoting the economic development.


The agriculture in Beijing witnessed a comprehensive development in 1995. The rural economy made a well-coordinated headway in farming, forestry, stock raising, sideline production, fishery, rural industry, construction, transportation, commerce and service trade.

Farming machinery in the municipality boasted of a total horsepower of 4.681 million kilowatts and farming machinery tended a total area of 290,000 hectares, accounting for 88.4 % of the cultivated farmland.

In 1995, the city's grain output totaled 2.59 billion kilograms. The plantation of agricultural and industrial crops have been optimized to better cater to the market-driven economy. Agricultural outputs increased by leaps and bounds, especially those of vegetables, meat, fresh-water fish, fresh and dried fruits.


Beijing boasts of a well-developed commerce system based on diversified operation and multiple circulation. Well-known, new and special products from all over China and the world are available in the municipality.

By the end of 1995, there was a total of 280,000 retail stores of various sizes, of which 980 were chain stores. Some 50 shopping malls now boast of a total floor space of upwards of 10,000 square meters. They include the Beijing-Lufthansa Friendship Shopping Center, CVIK Shopping Center, International Trade Center, Beijing Department Store, Xidan Market, Chang'an Market and Blue Island Building. These highly-modernized shopping malls, along with many century-old Beijing shops, formed a commercial system which has contributed toward the prosperity of the city. In 1995, the domestic trade of the municipality totaled an added value of 18.59 billion yuan, an increase of 17.7 % from the previous year. In 1995, the retail sales of social commodities in Beijing reached 82.7 billion yuan, up 24 % over 1994. The sales of foods amounted to 35.3 billion yuan, up 43.3 % as against the previous year. Compared with the increase of retail sales of clothing and daily commodities, the sales of foods were up 32.4 percentage points and 28.7 percentage points respectively.

There were 51 markets for industrial production materials and the annual volume of business reached 5.74 billion yuan.

Finance and Insurance

The finance of the city was stable in 1995 when its financial market underwent fine development and its strength further beefed up. In 1995, all financial institutions of the city combined to net a bank savings total of 352.72 billion yuan, up 29% over the beginning of the year when total deposits were at 79.27 billion yuan. Bank savings totaled 305.41 billion yuan, an increase of 30.7 % as against the beginning of the year. The deposits in other financial institutions of the city increased 19.8 % over the beginning of the year to reach 177.91 billion yuan.

The market of securities also enjoyed stable development. In 1995, the municipality sold at first-class markets a total of 11.55 billion yuan in national treasury bonds, up 32.9 % over the past year. Transactions were active on the circulation market which consisted of 57 securities trading centers and 81 stock exchange centers. The annual transaction of securities, bonds and stock shares totaled 161.92 billion yuan representing an increase of 140 %. The banks in the city combined to grant short-term loans totaling 94.37 billion yuan, up 22.4 % over 1994.

The insurance industry of the city also developed healthily as insurance of various types netted a total of 2.28 billion yuan in 1995, up 54 % over the previous year. The annual volume of compensation was at 830 million yuan, which represented an increase of 20.3% as against the previous year and a comprehensive compensation rate of 55%, down 8.3 percentage points compared with the past year.

Credit cards became more popular as more than 400,000 city dwellers have become credit card holders by the end of 1995. The annual volume of transaction reached 15 billion yuan. Banks and other financial institutions of the city are becoming more computerized.

Bank savings of foreign exchange continued to increase in 1995. All financial institutions combined to witness an increase of 29.5 %, of which bank savings by city dwellers reached 3.47 billion US dollars by the end of the year, or 710 million dollars more than the sum registered at the beginning of the year. Loans of foreign exchange increased by 17.8 %. The state regulation center of foreign exchange regulated a total of 970 million dollars, up 35 % over 1994. The city bought a total of 7.05 billion dollars and sold 6.3 billion dollars, with a surplus of 750 million dollars.

Foreign Trade

In 1995, exports and imports earned Beijing 4.29 billion US dollars, up 5.4 % from 1994. Exports increased 17.3 % to reach 2.55 billion dollars. Of the total, export-oriented companies and companies of industry and commerce accounted for 1.441 billion dollars, or 57.9 % of the total exports of the unicipality. Other enterprises which conducted their own exportation accounted for 339 million dollars, or 13.6 % of the city's total exports. Enterprises funded by overseas investors accounted for 665 million dollars or 26.7 % of the total. Volumes of exports by the latter two types of enterprises increased 42 % and 33% respectively in the past year. The composition of exports and imports changed as the exports of machinery and electronics products increased.


Beijing served as the capital city of China's Jin, Yuan, Ming and Qing dynasties. Its long history has endowed the city with countless historic and scenic spots which boast of precious value of aesthetics. Now more than 200 such places of interest are open to the public while some 50 historic and scenic spots are visited by overseas tourists all year round. The Forbidden City houses the world's largest and most intact imperial palace while the Summer Palace is China's largest imperial garden. There are also the Temple of Heaven where Ming and Qing emperors showed their respect to heavenly gods and the world famous Great Wall. Municipal authorities made painstaking efforts in developing tourism ever since the campaign of reforms. To provide tourists more comfortable and convenient accommodation in Beijing, a total of 183 star-rated hotels totaling 50,000 rooms were built in accordance with international and national norms. Of the total there are 14 five-star hotels, accounting for 42.4 % of the national total. Twenty-one four star hotels account for 25.9 % of the national total.

Tourism continued its development in 1995 when 2.069 million overseas tourists came to visit the city, generating a record revenue of 2.1 billion US dollars which compared with 1994 for a record increase of 8.6 %.

Capitalization on Overseas Funds

As of the end of 1995, Beijing has approved 11,749 enterprises with whole or partial overseas investment. The total of contracts is worth 30.152 billion US dollars, of which 17.516 billion dollars have come directly from overseas investors. Of these enterprises, 8,637 are Sino-overseas joint ventures; 797 are Sino-overseas co- operatives, and 2,315 are sole overseas operations. Primary and secondary industries account for 9,136 enterprises while tertiary industry accounts for 2,613 enterprises. In the constituency of overseas investment, there are 4,891 investors from Hong Kong, 1,877 from the United States, 1,410 from Taiwan, 994 from Japan, 534 from European Union countries, 999 from Singapore and 362 from South Korea.

A total of 247 multinational and well-reputed companies have made their investment in the municipality. Among the world's top 500 industrial enterprises and top 500 service corporations, 120 have poured investment in Beijing.

Those overseas-invested enterprises now in operation have reported fine and increasing returns. According to statistics from 4,002 in-operation, overseas-invested enterprises by the end of 1995, they combined to have posted a gross output value of 40.915 billion yuan via a work force of some 333,000, representing an increase of 125.2 % over 1994. Sales revenues from these enterprises increased 132.3 % to 47.861 billion yuan. Exports increased 133 % to665 million US dollars. Actual capitalization of overseas funds reached 8 billion dollars.

Beijing is becoming more attractive to overseas investment with the establishment and function of the state-approved Beijing economy and technology development zone, the Beijing new technology evelopment and experiment zone and the city-approved 21 industrial parks.

Further Targets

Efforts will be made to improve and perfect the function of Beijing as the political and cultural hub of the country and to build the city into a modernized and internationalized metropolis which will boast the most advanced culture, education, science, technology, morale and legal system of the country. Beijing will hold high-tech as the key of its further development which will be based on a well-developed tertiary industry and well-balanced industrial composition and structure. High efficiency and high returns will be the features of the municipal economy and the living standard of city dwellers will improve from the current well-to- do level. Social causes of all types will develop while the quality of the municipal populace will also get better. Social order and atmosphere will improve all the better. The environment of the city will also be improved and the management of the municipality will be uplifted. By the year 2000, the target set for the second phase of the modernization program will be achieved by quadrupling the per-capita gross national product as against that of 1980 and by forging the prototype of the socialist market-driven economy. By the year 2010, the municipal GDP will double as against 10 years ago in 2000 while the socialist market-riented economy will be perfected. The municipal capability of utilizing scientific, technological and economic strength and its level of social development will catch up with or even surpass those of the capital cities of moderately-developed countries, laying the foundation for building Beijing into a modernized and nternationalized metropolis in the 21st century.

Concrete targets are set as follows:

  • * The annual GDP growth rate of the city will be 9 % between 1996 and 2000;
  • * By 2000, the primary, secondary and tertiary industries will account for 4.5, 45.5 and 50 % respectively in the municipalGDP;
  • * Municipal revenue will increase along with national economy;
  • * Municipal investment in fixed assets will increase by an average 10 % between 1996 and 2000, with an accumulative total of 389.5 billion yuan;
  • * Sales of social commodities will amount to 166 billion yuan and foreign trade will reach 9 billion US dollars;
  • * The rise in price of retail sales will be kept lower than economic growth;
  • * Technological advances will account for 50 % of the economic growth and education of senior middle school will be basically popularized;
  • * Registered permanent residents will be no more than 11.25 million;
  • * Municipal environment will be improved as 40 % of the city will be covered by forest and 35 % of the city will be covered by other plantation;
  • * Per-capita living expenses for city dwellers and per-capita income for farmers will increase between 3 % and 5 % deducting the rise in price of commodities;
  • * Per-capita housing floor space will reach 15 square meters for city dwellers and the housing problem of those who had a per-capita housing floor space of below 4 square meters will be solved.
Development Prospect of Key Realms

* Construction of municipal infrastructure: By the year 2000, Beijing has to provide its dwellers 600,000 cubic meters more of water every day. The municipality will abide by state planning and prepare for the project of digging and tunneling water from south China to the north. Generating capacity of electricity will be increased to add another 2.4 million to 2.8 million kilowatts to reach an overall electricity provision of from 6.6 million to 7 million kilowatt-hours. The pipeline will send to Beijing natural gas from Shaanxi, Gansu and Ningxia in the west of the country. The new provision of natural gas will be between 700 million and 1 billion cubic meters. Central heating will account for 50 % of the municipal housing projects. Key section of roads will be widened and the fourth ring road will be revamped and an expressway from Beijing to Kaifeng will be constructed. A total mileage of 120 kilometers of new roads will be added to the city proper and another 1,200 kilometers of new roads will be added to the highway network in the suburbs. Another new subway line will be run from Fuxingmen to Bawangfen to add 11 more kilometers of subway transportation. Telecommunication facilities will be improved and a network of advanced telecommunication facilities will be formed as the municipality will have installed 5 million telephone sets, accounting for 40 % of the municipal population. In the city proper, 55 % of the dwellers will enjoy telephone services at home. The airports in the city will be improved and modernized while new airports will be built in the southwest and southeast of the city.

* Agriculture: High yield, fine quality and high efficiency will be the key to developing agriculture. The development will be based on technical advancement and appropriate operation on large scales. Intensive, specialized and modernized farming will be encouraged. Beijing agriculture will be tuned to boast of suburban characteristics to better cater to the need of the metropolis. The agricultural development will be planned in consideration of neighboring regions. The composition of agricultural production will be readjusted to turn Beijing suburbs into baskets of vegetables and bags of rice. Production bases of non-staple foods will be perfected as more grass-eating livestock will be raised. Perfect processing of gricultural and sideline products will be further developed while eco-agriculture, foreign exchange generating agriculture and tourism-related agriculture will be developed to uplift the overall returns of agriculture. By 2000, the added value of agriculture will reach 9.5 billion yuan in terms of the 1995 price.

* Industry: Efforts will be made to change the way of industrial growth. Further development will rely upon the advancement of science and technology and deepened reforms within enterprises. Enterprises will turn to science and technology as well as optimal composition for more returns and better benefits. Efforts will be made to reduce energy consumption, water consumption, material consumption, land will also be made to increase added value and depth of technology.

The existing industrial structure will be readjusted in accordance with the requirement of the market while technology-intensive industry will be given priority of development. Emphasis will be given to the development of four new sectors of electronic information, bio-engineering and new pharmacy, integration of optics, machinery, and electricity as well as new materials. Auto industry, electronics and machine tools will be developed as the backbone industries of the municipality. Metallurgy, chemical industry and building materials will be renovated as the basic industries of the city. Aid will be given to the development of superior products in the light and textile industries, pharmacy and printing industry. By the year 2000, the added value of industrial growth will amount to 78 billion yuan in terms of the 1995 price.

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