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Beijing: Market Profile

Major Economic Indicators

Economic Indicators2015Jan-Nov 2016
ValueGrowth
(%, y-o-y)
ValueGrowth
(%, y-o-y)
Gross Domestic Product (RMB bn)12,301.56.911,736.836.71
Per Capita GDP (RMB)106,4975.51
Added Value Output
   Primary industry  (RMB bn)14.0-10.819.23-8.51
   Secondary industry (RMB bn)454.33.31306.434.61
   Tertiary industry (RMB bn)1,833.28.111,421.237.31
Value-added Industrial Output2 (RMB bn)1.014.71
Fixed-assets Investment (RMB bn)799.15.7753.15.8
Retail Sales (RMB bn)1,033.87.3990.46.1
Inflation (Consumer Price Index, %)1.81.3
Exports (US$ bn)54.6-12.344.8-7.0
   By foreign-invested enterprises (US$ bn)14.8-28.911.3-15.9
Imports (US$ bn)264.9-25.0207.5-13.8
   By foreign-invested enterprises (US$ bn)50.4-14.046.82.4
Utilised Foreign Direct Investment (US$ bn)13.043.812.142.0

Notes:
1 In real terms
2 For all state-owned enterprises and other forms with annual sales over RMB20 million

3 Jan-Sep 2016           4 Jan-Jul 2016

Sources: Beijing Statistical Yearbook 2016, Beijing Statistical Bureau, China’s Customs Statistics 12.2015, 11.2016

 

General Background

Beijing has a total area of 16,411 sq kilometres. Total population stood at 21.71 million by the end of 2015.

Beijing is the capital of China and the country's political, cultural and international exchange centre. Beijing is one of the four municipalities directly under the central government. Along with Shanghai, Tianjin and Chongqing, the capital city enjoys similar economic and administrative powers as a province.

Industries

Beijing’s service sector accounted for 79.8% of the city’s GDP in 2015. Financial services, wholesale trade and retail trade, information technology services were the three biggest sectors, comprising 17.1%, 10.5%, and 10.3% of the GDP respectively. The scientific research & technical services sector recorded fast growth in recent years and accounted for 7.9% of the GDP in 2015, up from 4.5% in 2004.

 

Composition of GDP (%)

 20042015
Primary2.40.6
Secondary37.619.7
     Industry30.116.1
Tertiary60.079.7

Source: Beijing Statistical Yearbook 2016

 

Beijing is pushing forward the development of modern services sectors, including the development of services outsourcing, cultural and creative industries. Beijing has also adopted a cultural and creative industry development programme. It is estimated that in 2015, the value-added output of the cultural and creative industry accounted for about 13.4% of Beijing’s GDP. In 2015, the cultural and creative industry realised a growth of 8.7% in value-added output to RMB307.2 billion.

Beijing’s industrial production is dominated by heavy industries and large enterprises. In 2015, heavy industries accounted for 85% of Beijing’s gross industrial output and large and medium size enterprises accounted for 81.7% of the output. Major industries include telecommunications equipment, transportation equipment, chemicals, machinery, metallurgy and food making.

 

Output Share of Leading Industry Groups (2015)

Item% share of gross industrial output
Motor vehicles22.3
Communications equipment, computers & others12.1
Electrical equipment and machinery4.5
Manufacture of medicines4.2
Processing of petroleum, coking, processing of nuclear fuel3.4
Machinery for special purposes3.1
Machinery for general purposes
2.8
Food and beverage
2.6
Non-metallic mineral products2.2
Railway locomotives, ships and other transportation equip.
2.2
Raw chemical materials and chemical products
1.8

Source: Beijing Statistical Yearbook 2016

 

Development of the High-tech Sector

In 2015, Beijing’s total R&D expenditure amounted to RMB136.8 billion, up 7.8%, accounting for 5.95% of its GDP, up from 5.82% in 2010.

Beijing is trying to build a Chinese Silicon Valley and in this connection the Zhongguancun Science Park was set up in 1988 to attract investment in science and technology. In 2015, total sales revenue grew by 12.8% to RMB4,066.8 billion. In the first eleven months of 2016, total sales revenue grew by 12.9% to RMB3,701.6 billion. Apple Inc. has also planned to establish a R&D centre in Zhongguancun.

Beijing’s strengths in human capital and scientific research have helped the development of its hi-tech sector. Beijing has the largest number of and the most prestigious institutions of higher education and scientific research in the country. In 2015, 355,000 employed persons were engaged in R&D activities, an increase of 3.4%.

Tourism

Tourism is also an important industry in Beijing. The city has been the capital of China most of the time since the Yuan Dynasty. Its tourist attractions feature its rich palatial heritages. In 2015, the city received 4.2 million overseas tourists and recorded US$4.6 billion in tourism receipts; 270 million domestic tourists were received, posting RMB432 billion in tourism receipts.

Foreign Trade

Hong Kong was the second largest export market of Beijing in 2015, trailing only the US. During the year, Hong Kong accounted for 8.9% of Beijing’s exports. In 2015, Beijing’s exports to Hong Kong were down 4.2% from 2014 to US$4.87 billion. Beijing’s major exports to Hong Kong are machinery and electronic products and high-tech products.

The US was the leading source of imports in 2015, followed by Germany.

Foreign Investment

Chart: Utilised FDI of Beijing
Chart: Utilised FDI of Beijing

 

In 2015, the financial sector accounted for 56.4% of the total utilised FDI and contributed to the marked growth of the total utilised FDI. The utilised amount of FDI in the manufacturing sector accounted for only 4.6% of the total utilised FDI in Beijing in 2015.

Hong Kong was the largest source of FDI in Beijing in 2015. Utilised FDI from Hong Kong stood at US$9,932 million and accounted for 76.4% of the total FDI. In recent years, Hong Kong investors have actively participated in urban redevelopment. For example, Hong Kong property developers have invested in redevelopment projects in Xidan and Wangfujing. Hong Kong’s MTR Corporation is also participating in the Beijing Metro Line 16 project.

Other major investors in 2015 came from British Virgin Islands, Germany and France.

Consumer Market

Purchasing power is strong in Beijing. In terms of per capita disposable income of urban residents, Beijing reached RMB52,859 in 2015 (up 8.9%). Huge consumption demand from both the local residents and tourists has made Beijing one of the biggest consumer markets in China.

 

Composition of Per Capita Expenditure of Urban Households (%)

 2015
Food 22.4
Clothing 7.2
Housing     30.7
Household articles & services 6.2
Health care & medical services     6.5
Transportation & communications 13.3
Recreation, cultural & education11.0

Source: Beijing Statistical Yearbook 2016

 

Beijing’s three traditional shopping districts -- Wangfujing, Xidan and Qianmen are well known in the country. In more recent years, due to development of the different ring roads, new shopping and commercial districts have emerged in areas around or outside the third ring such as the Chaoyang District and Haidian District.

Attracted by the size and potential of the consumer market, new department stores and shopping complexes mushroomed in the past few years. Retail outlets such as supermarkets, convenient stores, and warehouse-style membership stores have also developed rapidly. Foreign-invested chain supermarkets such as Carrefour, Metro have entered the Beijing market. The operation of foreign-invested enterprises has stimulated the development of other local chain stores and retail groups such as Hualian and Gome.

 

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