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Beijing: Market Profile

Major Economic Indicators

Economic Indicators20162017
ValueGrowth
(%, y-o-y)
ValueGrowth
(%, y-o-y)
Gross Domestic Product (RMB bn)12,566.96.812,800.06.71
Per Capita GDP (RMB)118,1986.31
Added Value Output
   Primary industry  (RMB bn)13.0-8.7112.1-6.21
   Secondary industry (RMB bn)494.46.31531.14.61
   Tertiary industry (RMB bn)2,059.57.012,256.97.31
Value-added Industrial Output2 (RMB bn)5.115.61
Fixed-assets Investment (RMB bn)846.25.8894.85.7
Retail Sales (RMB bn)1,100.56.51,157.55.2
Inflation (Consumer Price Index, %)1.41.9
Exports (US$ bn)51.8-5.258.512.5
   By foreign-invested enterprises (US$ bn)12.3-16.612.40.3
Imports (US$ bn)230.2-13.1265.215.1
   By foreign-invested enterprises (US$ bn)52.03.353.52.8
Utilised Foreign Direct Investment (US$ bn)13.00.324.386.7

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

Sources: Beijing Statistical Yearbook 2017, Beijing Statistical Bureau, China’s Customs Statistics 12.2016, 12.2017

 

General Background

Beijing has a total area of 16,411 sq km. Total population stood at 21.71 million by the end of 2017.

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 80.6% of the city’s GDP in 2017. Financial services, information technology services, and scientific research & technical services, were the three biggest sectors, comprising 16.6%, 11.3%, and 10.2% of the GDP respectively.

 

Composition of GDP (%)

 20042017
Primary2.40.4
Secondary37.619.0
     Industry30.115.3
Tertiary60.080.6

Source: Beijing Statistical Bureau

 

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 2016, the value-added output of the cultural and creative industry accounted for about 14% of Beijing’s GDP. In 2016, the cultural and creative industry realised a growth of 10.1% in value-added output to RMB358.1 billion.

Beijing’s industrial production is dominated by heavy industries and large enterprises. In 2016, heavy industries accounted for 84.9% of Beijing’s gross industrial output and large and medium size enterprises accounted for 83.2% of the output. Major industries include telecommunications equipment, transportation equipment, chemicals, machinery, metallurgy and food making.

 

Output Share of Leading Industry Groups (2016)

Item% share of gross industrial output
Motor vehicles26.4
Communications equipment, computers & others11.2
Manufacture of medicines4.5
Electrical equipment and machinery3.8
Machinery for special purposes2.8
Processing of petroleum, coking, processing of nuclear fuel2.7
Machinery for general purposes2.7
Food and beverage2.5
Non-metallic mineral products2.4
Railway locomotives, ships and other transportation equip.2.2
Processing of food from agricultural products2.2

Source: Beijing Statistical Yearbook 2017

 

Development of the High-tech Sector

In 2017, Beijing’s total R&D expenditure amounted to RMB159.5 billion, up 7.5%, accounting for 5.7% of its GDP.

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 2016, total sales revenue grew by 11.1% to RMB5,115.8 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 high-tech sector. Beijing has the largest number of and the most prestigious institutions of higher education and scientific research in the country. In 2017, 388,000 employed persons were engaged in R&D activities, an increase of 3.9%.

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 2017, the city received 3.93 million overseas tourists and recorded US$5.12 billion in tourism receipts; 290 million domestic tourists were received, posting RMB512.2 billion in tourism receipts.

Foreign Trade

Hong Kong was the second largest export market of Beijing in 2016, trailing only the US. During the year, Hong Kong accounted for 8.5% of Beijing’s exports. In 2016, Beijing’s exports to Hong Kong were down 8.9% from 2015 to US$4.43 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 2016, followed by Germany.

Foreign Investment

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

In 2016, the wholesale and retail trade sector accounted for 44.8% 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 4.9% of the total utilised FDI in Beijing in 2016.

Hong Kong was the largest source of FDI in Beijing in 2016. Utilised FDI from Hong Kong stood at US$5.6 billion and accounted for 43.1% 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 2016 came from Cayman Islands, British Virgin Islands, Germany and Singapore.

Consumer Market

Purchasing power is strong in Beijing. In terms of per capita disposable income of urban residents, Beijing reached RMB62,406 in 2017, increasing by 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 (%)

 2016
Food, tobacco and liquor21.1
Clothing6.9
Housing31.7
Household articles & services6.6
Health care & medical services6.9
Transportation & communications13.3
Recreation, cultural & education10.6

Source: Beijing Statistical Yearbook 2017

 

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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