China Sourcing, Guangzhou Leading
Guide to Investment in Guangzhou
Guangzhou，also known as ”Canton”, has been designated as China
Service Outsourcing Demonstration City, the State Software Industry Base
and National Software Export Base. Well-known across the globe for
processing trade, Guangzhou, the largest city in southern China, has made
its strategic decision to rapidly develop the service outsourcing
industry as a result of the shift from manufacturing to service economy.
In 2009, Guangzhou witnessed its software industry output exceeding
USD 8 billion. According to the developing plan, by 2015, the revenue of
outsourcing in Guangzhou will exceed USD 180 billion, and the number of
outsourcing enterprises will reach 2000, with about 280,000 strong
workforce.
Currently, services outsourcing in Guangzhou is focusing on software
developing, Biomedical R&D, modern logistics service, and Animation,
Comics and Games. Major development will be put on such sectors as
financial, industrial designing, tourism, conference and expo,
commercial service, intellectual property and Cloud service.
Guangzhou, the Gateway to the Asia-Pacific Region
Guangzhou, located at a strategic area surrounded by Singapore, Hong
Kong, Macau, Taiwan and inland cities of China, is one of the most
competitive and dynamic cities in China. It is known as the “Southern
Gateway” of the Chinese economy.
More than 170 “Fortune 500” companies have settled in Guangzhou.
Many famous international companies have established their headquarters
or administrative offices in Guangzhou. 23 “Global Outsourcing 100”
companies have set up service networks in Guangzhou. Many foreign
companies have established their key production or R&D centers here,
including Accenture、IBM、Sodexo、CB Richard Ellis、Capgemini、Neusoft、
VanceInfo、NCS.
Guangzhou, Your Best Choice for Service Outsourcing
The “City of Business” – Established in 214 B.C., Guangzhou is a
famous cultural city with a long history. It was the starting point of
the “Maritime Silk Road” after the Han and Tang dynasties. The world
famous “Canton Fair” has been successfully held for over 100 times.
A Transportation Hub – Bordering Hong Kong, Macau, Taiwan and
Singapore, Guangzhou, China’s “Southern Gateway” to Asia and North
America, enjoys convenient air and sea transportation conditions.
Business Environment – Guangzhou is one of the leading cities for
development of outsourcing business in China. Government support and
treasury funds have sharpened the competitive edge of Guangzhou’s
outsourcing industry.
Human Resources – Guangzhou enjoys a large reserve of well-educated
professionals of various disciplines. The Guangzhou Higher Education Mega
Center is a national first-class university park with integrated
functions of education, R&D and production. It is the educational,
research and exchange center in South China.
Knowledge Innovation – The Guangzhou “Knowledge Hub” is a joint
venture between Guangzhou and Singapore. It will provide a new engine for
the development of high-end knowledge industries in China.
Living Conditions – The living standards in Guangzhou lead the nation.
The government is dedicated to providing high-quality education, medical
care and other social services.
1.About Guangzhou
Guangzhou, the capital of Guangdong Province, is one of the five
National Central Cities in the Mainland of China along with Beijing,
Shanghai, Tianjin and Chongqing, and the political, economic,
technological, educational and cultural center in South China. Adjacent
to Hong Kong and Macau, Guangzhou enjoys a unique geographic advantage
in both domestic and international trade.
Being a member of the World Association of the Major Metropolises,
Guangzhou aims to become an international financial, commercial, trade
and information center, a tourist resort, and a transportation and
communication hub, with a beautiful environment, complete facilities and
reasonable industrial layout.
Guangzhou is a famous cultural city with a history of over 2,200 years.
Early in the Qin and Han dynasties, it became a busy port. Later, in
the Han and Tang times, the “Maritime Silk Road” was developed and
Guangzhou became the starting point. It is one of the earliest ports in
China open to foreign merchants. International exchanges left numerous
cultural and historic relics.
Guangzhou has a subtropical monsoon climate. The annual average
temperature is 20-22℃. There are green trees and flowers throughout the
year, hence the name “City of Flowers”. Guangzhou has over 10 districts
and 2 county-level cities in its jurisdiction with an area of 7434.4 km2.
At the end of 2009, the city had a permanent population of 10,334,500.
Guangzhou is an excellent place for both living and business
development. In 2002, it received the “Dubai Award” from the United
Nations for its efforts to improve the living environment. It also
received many honors, such as “National Model City for Environmental
Protection”, “National Model City for Forestation”, “National
Advanced City for Civilization Construction”, “International Garden
City”, and “Best Chinese City Favored by European Tourists”.
On November 12, 2010, the 16th Asian Games has been held in Guangzhou.
It is the second Chinese city to host this event after Beijing.
2.Business Environment
“Competitive, Flexible, Comprehensive and High-end”
Economic development
In 2009, Guangzhou’s GDP reached 911.28 billion RMB, increasing
11.5% over the previous year. Its per capita GDP exceeded 10,000 US dollars,
ranking third among Chinese cities and ranking 30th in the world.
Automobile, petrochemical and electronic information are its three pillar
industries. Bio-pharmaceutical, high-tech and modern service industries
are developing rapidly. A modern industrial system with complete
industries, excellent infrastructure facilities and strong R&D abilities
has taken shape. Guangzhou’s consumption market and consumption scale
hold an important position in China, and bear a direct impact on the
development trend in the Pearl River Delta area.
In 2009, Guangzhou attracted a total of 844 projects with foreign
direct investments from 56 countries and regions. By the end of 2009, a
total of 170 “Fortune 500” companies had settled in Guangzhou. They
established 394 projects with a total investment of 16.16 billion US
dollars. Many famous multinational companies such as P&G, Amway, FedEx,
and HSBC have established their headquarters in Guangzhou.
In 2010, Guangzhou was rewarded the best city on the Forbes List of
Best Business Cities in China, honored as “2010 China International
City”.
On the record of Guangzhou Municipal Administration of Industry and
Commerce, there were a total of 9,250 foreign-invested enterprises, 5,916
branch offices (non-corporation) of foreign-invested enterprises, and
4,019 representative offices of foreign enterprises and enterprises from
Hong Kong, Macau and Taiwan.
There were over 2,300 financial institutions with financial assets
exceeding 100 billion RMB.
In 2009, the value increase of the tertiary industry was 554.556
billion RMB, increasing by 13.6% over the previous year. The total foreign
trade volume was 76.737 billion US dollars. Of this total, 37.405 billion
US dollars came from export and 39.332 billion US dollars from import.
Source: Chinese Outsourcing Plan; Guangzhou Foreign Trade Report 2010;
Guangzhou Economic and Social Development Statistic Bulletin 2009.
Preferential Policies
All offshore outsourcing businesses are exempted from business tax
in Guangzhou.
For Technology Advanced Service Enterprises, corporate income tax
(CIT) will be levied at the reduced rate of 15%. The staff training
expenses will be deducted from the pretax CIT if they are within 8% of
the payroll. Such enterprises will enjoy favorable tax rates for import
of equipment as in bonded areas.
(Technology Advanced Service Enterprises refer to technical service
enterprises in the category of ITO, BPO and KPO, with at least half of
the employees having college diplomas and strong R&D ability, and the
gross business revenue within the specified scope account for at least
50% of the total revenue of the year.)
Outsourcing enterprises will be given financial support for
acquisitions of international certificates such as CMM and CMMI, and for
the subsequent maintenance and upgrading of the certificates.
Outsourcing enterprises will enjoy training subsidies for newly
employed college students.
Source: chinasourcing.mofcom.gov.cn; Document GBH [2010] No. 69.
Workforce
Guangzhou enjoys rich human resources which can meet the requirements
of various enterprises. Guangzhou has a complete educational system with
a large team of teaching staffs and diversified teaching programs. There
are 76 universities and colleges, including the famous Sun Yat-sen
University, South China University of Technology, Jinan University, and
Guangdong University of Foreign Studies, with a student population of
800,000, including about 20,000 foreign students, and 196 independent R&D
institutions. They have established cooperative relationships with over
200 research institutions, universities and academic organizations in
over 20 countries and regions.
Guangzhou has a stock of nearly 1,900,000 talented professionals,
including academicians, doctors, masters and bachelors, as well as
experienced and skilled workers. Besides, more and more talented
professionals are attracted to Guangzhou each year by its fast development,
good prospects and excellent business environment. They can meet the
requirements of different enterprises. According to statistics,
approximately 300,000 persons are introduced through the Nanfang Job
Center each year.
Source: Guangzhou Economic and Social Development Statistic Bulletin 2009;
Foreign Trade Report 2010.
Source: http://chinasourcing.mofcom.gov.cn/gz/gz1citymiennr1.html
3.Regional Gateway
Guangzhou, the “Southern Gateway” of China, enjoys an advantageous
location as well as a convenient transportation network. Whatever you do
and wherever you go, you will enjoy cost-effective service in Guangzhou
through its developed transportation and telecommunication systems.
Transportation Network
The New Baiyun International Airport is one of the three largest
airports in China and the 30th largest airport for passenger transport
in the world. It takes only 3-4 hours from Guangzhou to Japan, Singapore,
Malaysia, South Korea or Taiwan. There are nonstop flights to Manila, New
York, Tokyo, Osaka, Bangkok, Singapore, Sydney, Melbourne, Los Angles,
Paris, and other international cities.
Guangzhou is a key transportation hub in the Pearl River Delta area,
with perfect infrastructure facilities and convenient transportation
links. Centering round the construction of Asian Games facilities, the
city will spare no effort to speed up the construction of key
infrastructure projects. In November 2010，when the Asian Games is held,
Guangzhou will have a modern transportation network featuring three ports
(airport, seaport and information port) and two expressways (motorway and
rapid transit railway).
Guangzhou Port is an important comprehensive port in South China. It
is also an important container port and the largest trade port in the
region, with routes to over 300 ports in over 80 countries and regions.
Guangzhou has developed subway lines. By the end of 2010, there will
be 8 subway lines with a total operating mileage of 222 kilometers.
Guangzhou East Railway Station is 183 kilometers or one hour and 40
minutes’ ride from the Hung Hom Station in Kowloon, Hong Kong. There are
12 trains from Guangzhou to Hung Hom every day.
Source:
Source:
Source:
Source:
http://www.baiyunairport.com/about.jsp
http://chinasourcing.mofcom.gov.cn/gz/gz1citymiennr1.html
http://www.gzport.com/html/gkgk.asp
Guangzhou Economic and Social Development Statistic Bulletin 2009
Communication Network
Guangzhou has a leading information system. Now, efforts are being
focused on the building of a national model city for information system
development. As one of China’s three largest information centers and one
of the three major Internet portals, Guangzhou has an export bandwidth
of 45.6GB/s, accounting for 34% of the nation’s total bandwidth. In 2009,
Guangzhou had 20,994,400 mobile phone subscribers and 2,801,900 Internet
subscribers, respectively increasing 6.5% and 19.0% over the previous
year.
For detailed tariff, please visit www.10000.com or dial (+86) 020 -10000.
Source: http://www.gzgov.net
4.Operating Costs
Office Buildings
Monthly Rent of Office Buildings in Outsourcing Industrial Areas
District
Monthly Rent (USD/m2） Monthly
Property
Management
Fee
2
(USD/m ）
Tianhe
2.94-4.41
0.74
Yuexiu
10-17.65
2.94-4.41
Haizhu
3.68-4.41
2.94-3.68
Panyu/Luogang
3.68-65
0.74-3.68
Source: Respective district departments
Monthly Rent of High-grade Office Buildings in Downtown Area
District
High-grade Office
Monthly
Rent Monthly
Property
2
Building
(USD/m ）
Management
Fee
2
(USD/m ）
Tianhe
CITIC Plaza
24.27
4.26
Times Square
11.77
3.82
Yuexiu
Guangzhou
Int’l
19.12
3.68
Electronic Tower
Guangzhou
World
13.24
4.12
Trade Center
Haizhu
Skyline Plaza
8.82
2.94
Liwan
Bank of America Plaza
11.03
4.27
Source: Property management offices of respective buildings
Labor Costs
Guangzhou has advantages in labor costs. An employee’s salary plus
welfare benefits and endowment insurance is 12-20 RMB (or 1.8-1.9 US
dollars) per hour, which is equal to 1/10 -1/20 of the labor costs in
developed countries. This will save a lot for the investors.
Software Industry
Average Monthly Salary (USD)
Software Technician
720
Network Technician
516
System Analysts
502
Programmer
562
(Based on the exchange rate on Aug. 24, 2010: $1 = 6.7999 RMB)
Source: http://chinasourcing.mofcom.gov.cn; “Wage Standards for Guangzhou Labor
Market in 2010” from http://www.gzlss.gov.cn
Electricity and Industrial Water Price
Electricity (USD／KWh)
Type
Price
<1KV
1-10KV
>=35KV
0.1321
0.1285
0.1248
Industrial Water
Sewage
Tap Water Price
Treatment Fee
(USD/m3)
(USD/t)
0.2059
0.2691
Source: Southern Power Hotline; www.gzwjj.gov.cn
Transportation Costs
International and Hong Kong, Macau and Taiwan EMS Tariff (in USD)
Target Country/Region Starting Weight: 500g
Additional
Weight: 500g or
Documents
Objects
below
Hong Kong & Macau
13.24
22.06
4.41
Japan,
S.
Korea,
16.91
26.47
5.88
Taiwan, Mongolia
Malaysia, Singapore,
19.12
27.94
6.62
Thailand
Britain,
Germany,
32.35
41.18
11.03
France
USA, Canada
26.47
35.30
11.03
Source: www.gzwjj.gov.cn
5.Industrial Projects
Outsourcing Industrial Area in Tianhe Software Park
Tianhe District is located in the city center of Guangzhou. It covers
an area of 137.40 million square meters with a permanent population of
1.15 million. It is a newly developed area in the central business district
of Guangzhou on the new city axis. It is also a key software and animation
industrial area in China. Main outsourcing projects include:
Name
Total Area
Main Functions
National
Software 122,500 m2
Technological
Industrial
Base,
innovation
area;
Tianhe Software Park
high-end
modern
Gaotang
Industrial
service
industry
Area
headquarters area;
eco-software community
Guangzhou Development Area Outsourcing Industrial Area
Guangzhou Economic & Technological Development Area (GETDA) has a
planned area of 60.62 million square meters, including six key industrial
clusters: electronic information, automobile, metal smelting, biology,
fine chemical, food & beverage. Main outsourcing projects include:
Name
Total Area
Main Functions
Creativity Building, 234,500 m2
Creative
industrial
Innovation Building
park, software park,
biopharmaceutical
park, material & energy
park
Guangdong
Software
Park
66700 m2 land, 149,000 Service
institution
m2 buildings
for software public
technical recourses;
service
institution
for software technical
incubation
and
innovation
Huanghuagang Technological Park Outsourcing Industrial Area
Guangzhou High-tech Industrial Development Area Huanghuagang
Technological Park is a national-level high-tech development park
featuring information service, pharmacy and creative industry. Main
outsourcing projects include:
Name
Total Area
Main Functions
Creativity Avenue
30,000 m2 buildings
Technological
innovation
center;
animation
public
technology
&
information
service
platform; industrial
design platform
Huihua Trade Building
High-tech
and
animation projects
China
International 35,000 m2 land
Domestic
and
Center
international
“Top
500”
enterprises,
high-end
consulting
service,
high-tech,
logistics,
software
development
Situated in the center of the Pearl River Delta, Nansha Development
Area is within one hour’s ride from any of the 14 large and middle-sized
cities in the area, 38 nautical miles from Hong Kong and 41 nautical miles
from Macau. Enjoying the convenience of several expressways, it is an
important regional transportation hub. Guangzhou Subway Line 4 connects
the urban area to Nansha where there are 12 passenger ferries to and from
Hong Kong daily. Currently, the industrial area has such industries as
automobile, iron & steel, shipbuilding, fine chemical, high-tech,
equipment manufacturing, and port logistics. Main outsourcing projects
include:
Name
Total Area
Main Functions
Nansha
Information Planned
Area: Software
and
Technology Park
2,500,000 m2
animation,
outsourcing,
electronic
information, advanced
manufacturing,
biopharmacy and new
materials
Technological
Land Area: 20,000 m2
One of technological
Innovation Center
research
centers;
software outsourcing
and training center in
Nansha
Chinese
General Building Area: 27,000 Intelligent
Chamber of Commerce m2
comprehensive
(HK) Building
commercial building
Nansha Olympic Park
Building Area: 15,800 One of technological
m2
research
centers;
software outsourcing
and training center
6. Services Organizations
Bureau of Foreign Trade and Economic Cooperation of Guangzhou
Municipality
——administrative authority of Guangzhou Municipal People’s
Government, responsible for Guangzhou’s foreign trade and economic
cooperation
Tel: +8620 88902831
Email: postmaster@gzboftec.gov.cn
Website: www.gzboftec.gov.cn
Address: No.158 Dongfeng Xi Road, Guangzhou 510170, China
Guangzhou Software (Animation & Comic) Industry Development Office
Tel: +8620 38258390
Email: rjb@gz.gov.cn
Website: www.gzsoftware.gov.cn
Address: Rm 203, 2nd Fl, No. 886 Tianhebei Rd. Guangzhou 510630, China
Guangzhou Software Development Council
Tel: +8620 66814106
Email: info@gzsdc.org.cn
Website: www.gzoutsourcing.cn
Address: 6F, Guangdong Software Building, No.7 Yuancun Yiheng Road,
Tianhe District, Guangzhou 510655, China