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Viewing report
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Kunshan Economic and Technological Development Zone
China Knowledge Press, June 2011, Pages: 25
Kunshan Economic and Technology Development Zone (Kunshan ETDZ) rated “AAA” by China Knowledge. The zone with an area of 10 sq km is popularly known as ‘Taiwan industrial Area’ as more than 60% of foreign enterprises set up in the zone are Taiwanese owned. These include Uni-President, Compal, Foxconn, Acer, Nanya Plastics and thousands OEM where total investment achieved USD 30 billion. The zone was approved as a national-level economic development in 1992, located to the east of Kunshan, Jiangsu Province in the Yangtze River Delta. It is 50 km from Shanghai and 37 km from Suzhou.
Kunshan ETDZ is the city’s economic growth engine. In 2009, GDP of the zone rose 14.4% year-on-year to RMB 96.5 billion, accounting for 55.1% of Kunshan’s GDP. The value-added industrial output from the zone amounted to RMB 78.8 billion, up 13.68% year on year. Its export value hit US$36.5 billion, accounting for 90% of Kunshan’s total. The export value ranked first among the national-level economic and technological development zones in China.
In 2010, the utilized FDI in the park topped US$840 million, accounting for more than 47% of city’s total. By the end of 2010, Kunshan ETDZ had total attracted more than 1,642 foreign-invested projects of which 60% funded by Taiwanese. The latest figures show that in the first half of 2010, value-added industrial output of Kunshan ETDZ amounted to RMB 66.34 billion, up 32.75% year on year. The utilized FDI rose 3.42% to US$840 million, while the export value rose 55.43% to US$33.4 billion.
Last year, Kunshan’s GDP amounted to RMB 210 billion, up 14.2% year-on-year. The GDP per capita reached RMB 144,,500 in 2010. The industrial output in Kunshan has surpassed RMB 700 billion, a stable increase of 20.6% year-on-year. The foreign-funded enterprises play an important role in the city’s economy, which generated RMB 623.7 billion industrial output in 2010, accounting for 89.1% of the city’s total. After years of development, Kunshan has established itself as one of the world’s most important IT industrial bases. In 2010, the enterprises there produced 70.96 million laptops and 16.5 million digital cameras, up 17% and 5.6% respectively. The industrial output from its high-tech enterprises amounted to RMB 248.7 billion, accounting for over 30.7% of the city’s total.
Situated within half an hour of Shanghai Economic circle, the city benefits from its proximity to Shanghai. Kunshan is often called the tenth district of Shanghai as the fast development of the city is largely dependent on Shanghai. Kunshan is an export-orientated economy where non-state-owned and controlled businesses account for 97% of the city’s economy.
Industrial parks with AAA rating are the most established and have the best investment environment and are strongly recommended. There are only 11 among 254 rated ones that are classified as national or municipal level. These industrial parks have potential of listing in both domestic or foreign exchanges in the form of industrial real estates developer or industrial REIT. Small-size developments with core industry theme are listed in HKSE, SSE and SZE. There are enormous investment opportunities due to their well-developed infrastructure and large number of multinational and state-owned companies established there. It is estimated that the value of each industrial parks could exceed USD 30 billion each. The most notable one is the Tianjin TEDA that has large land bank for future development over several decades.
Due to its small population of 1.7 million and increasing labor and operational costs above national average, the zone is seeing a shift of interests and existing manufacturers to less costly cities in the Central and Western regions.
The AAA rating could be downgraded if labor supply becomes a bottleneck to manufacturers in the Kunshan. The high scoring of Kunshan ETDZ is mainly attribute to its strong exports and high value-added manufacturing activities. On 15 March, it sets up a RMB 500 million private equity fund to support innovative entrepreneurship and elevate the financial sector. The fund is expected to increase to RMB 3 billion in 3 to 5 years.
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