South China’s Most Attractive Regions
First of all, what do we talk about when mentioning the attractive regions of “South China”? The Southern part of China is mostly composed of coastal regions, namely the provinces of Zhejiang, Hainan, Guangxi, Fujian and Guangdong. In the South-West of China, there is also the non-coastal Yunnan province.
The Guangdong – Hong Kong – Macau Greater Bay Area
The “Greater Bay Area” (GBA) is considered to be the economic center of South China. It includes 9 municipalities in the Guangdong province (Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing), as well as the special administrative regions of Hong Kong and Macau. The GBA was created to integrate the regions’ cities and transform them into a global technology and innovation center. The “Outline Development Plan for the Guangdong – Honk Kong – Macao Greater Bay Area” that was issued in February 2019, provides guidelines for the development and cooperation of the region.
More specifically, the leading region in South China in terms of Gross Regional Product (GRP) and Import/Export is Guangdong and comprises cities such as Guangzhou, Shenzhen, Foshan, Dongguan, Zhongshan and Zhuhai. According to the National Bureau of Statistics of China, in the second quarter of 2019, its economy had the largest GRP (50,501.17 hundred million yuan) among all provinces and municipalities in China, accounting for 11.04% of the national GDP. Fujian represented 3.64%, with a GRP of 16,640.15 hundred million yuan. Guangxi´s GRP amounted 8,906.91 hundred million yuan and accounted for 1.95% of the national GDP, while Hainan, with a GRP of 2,668.96 hundred million yuan, represented 0.58%. Guangdong’s imports and exports also ranked first in 2018, representing 23.46% of China’s total value of imports and exports (Fujian: 4.06%; Guangxi: 1.35%; Hainan: 0.28%).
Economic Specificities and Main Industries in South China
Many Free Trade Zones (FTZs)
One specificity of South China is its particularly high number of Free Trade Zones and other Special Economic Zones. This attracts many companies and foreign investments to the region. FTZs are a type of Special Economic Zones with certain advantages. Companies in FTZs benefit from a variety of incentives, special policies, facilitated administrative procedures and relaxed rules that are meant to facilitate and boost business activities and trade in the area. Tax incentives on corporate tax for example, often allow companies to benefit from a 15% tax rate if they meet some requirements, instead of the 25% standard rate elsewhere in China.
Focus on Specific Industries
Furthermore, most cities in South China focus on the development of only a few specific industries. This not only gives them a competitive advantage but also enables companies to benefit from their synergies. Foshan is for example structured in a variety of specialized townships: 41 of them focus on one industry, and 38 are specialized in one particular sector. Additionally, South China’s big cities are equipped with a large number of development zones and industrial parks concentrating industry-specific activities and facilitating development.
In the following table you will find all major provinces of South China and most attractive cities of Guangdong with their respective economic specificities and industries.