As the capital of the second largest economy in the world, Beijing enjoys superiority in policy, personnel, finance and infrastructure. In 2015, Beijing used 13 billion U.S. dollars of foreign capital, rising 43.8%. The main service areas attractive to overseas investment include science and technology, Internet and information, culture and education, finance, business and tourism, health and medicine. With necessary policies put in place, Beijing is sure to expand the opening of the service industry, thus providing greater space and investment opportunities for overseas investors.
Outstanding features of the capital economy
Beijing is the political, cultural, international exchange and science and technology innovation centers of China. In 2015, Beijing’s total production value was 2.296,86 trillion yuan and economically it has assumed the economic feature of capital economy.
--- Headquarters economy
Beijing has the unique advantage to attract corporate headquarters. At present, the city has more than 7,700 corporate headquarters, including central government enterprises, municipal government enterprises, large non-governmental enterprises and transnational corporations. Although the number of such enterprises accounts for 6 per thousand, their combined GDP and tax payment have exceeded 50%. Beijing boasts the largest number of headquarters of top 500. Of the 2015 “Fortune” top 500, 52 had their headquarters moved to Beijing.
--- Service economy
Beijing is the No.1 among China’s big cities in terms of the service industry. The added value of the service industry in the whole city’s production value rose to 79.8% by 2015 from 75.5% in 2010, leading the country in establishing a service-led industrial structure.
--- Open economy
Beijing has maintained economic and trade relations with more than 200 countries and regions. In 2015, its import and export value reached 319.59 billion U.S. dollars, used 13 billion U.S. dollars of investment from overseas, a 43.8% rise year on year or the 13th consecutive year of growth.
--- Consumption economy
The per capita GDP in Beijing has topped 17,000 U.S. dollars. The consumption demand by residents is going strong, contributing to over 60% of the city’s economic growth. The city has been ranked first among all Chinese cities in terms of total retail sales, with 1.0338 trillion yuan. The city is large not only in the market scale but has also played a strong demonstrative role in consumption. Many famous brands have chosen Beijing for fostering their images.
--- Innovative economy
The city has persisted in the science and technology innovation and cultural innovation and has accelerated the building of the state independent demonstrative zone at Zhongguancun, according to the country’s innovation strategy. Now Zhongguancun has an industrial cluster of more than 20,000 high- and new-technology enterprises and more than 200 companies listed at home and abroad. The total income of such high- and new-technology enterprises topped 3 trillion yuan and the technology export transactions account for nearly 40% of the country’s total.
Six major competitive advantages
Compared with other Chinese cities, Beijing has at least the following six competitive advantages:
--- political center
Beijing is a national political center and many state major political and economic decisions come from here. Investing in Beijing makes it easy for investors and enterprises to strengthen interaction with the central government and get timely major policy information, policy bias information, government procurement, financial backing and other resources of the central government.
--- Education, science, culture and health
Education, science, culture and health constitute the core components of the comprehensive competitive power, commercial prosperity and living quality of a country, a city and even a region. Beijing is the most developed in these areas, with the institutes of higher learning accounting for a quarter of the country’s total; the number of research institutions under the central government accounting for 75% of the total; the number of well-known cultural organizations accounting for 80%. It boasts more than 50 top class hospitals and more than 10,000 other medical organizations.
--- High-end personnel
Personnel is the No.1 resource and human capital is the No.1 capital. High-end personnel is the core driving force behind the economic and social development. Beijing boasts more than half of the science and engineering academicians and the number of undergraduates and postgraduates at school tops 8,000. The number of high-end personnel tops 1.5 million. Such precious resources can provide a strong intellectual backing to enterprises.
Beijing is China’s financial decision taking center, regulation center and settlement center. All the major banks, insurance, security, fund and investment companies of China are headquartered in Beijing. The total financial assets in Beijing account for nearly half of the country’s total, ranking first.
Infrastructure development has always claimed priority in Beijing’s municipal construction. The city leads the country in road, rail, telecom, power and fuel gas projects and scientific, technological, educational, cultural, health and sport facilities.
Beijing values law and order and has always attached much importance to city governance, safe production and market control and regulation. The law and order is good. It has made great efforts to ensure food and drug safety, ranking first in the country in terms of food safety and the safety in the reliability and stability of water, power and heat supply.
Service industry offers huge business opportunities
In May last year, Beijing started experiments in expanding the opening of the service industry, striving within the three years of experimental period to achieve the goal of expanding the opening in science and technology service, Internet and information service, cultural and education service, financial service, commercial and tourism service and health and medical service and make the experience duplicable throughout the country.
On October 27, the same year, the State Council printed and circulated the “Decisions by the Beijing Municipality on special management measures concerning temporarily adjusting related administrative examination and approval and access”, saying that the city will begin to implement the decisions starting from May 5, 2018.
The adjustment covers specific areas where cultural and entertainment enterprises are gathered, allowing overseas business people to wholly own performance brokerage organizations to provide services within the jurisdiction of Beijing; removing the restrictions on the necessity of Chinese investors holding the controlling shares in airplane servicing and maintenance; allowing qualified overseas business people to operate Sino-joint venture travel agencies to operate the outbound tourism and tours to Hong Kong and Macao.
Other measures for expanding the service industry include:
--- Remove the requirements for engineering design performance for overseas capital (not including project survey) deign enterprises in Beijing when they first apply for the qualifications;
--- Allow overseas capital financial institutions to set up overseas capital banks and joint venture banks together with non-governmental capital;
--- Allow overseas business people to set up specialized medical and health insurance organizations (with the shares held by the overseas capital not exceeding 50%);
--- Allow overseas business people to invest in credit rating companies (priority given to Hong Kong and Macao service providers);
--- Allow qualified Hong Kong and Macao specialized personnel who have obtained the registered accountants qualification in the inland to be partners of partnership accountants’ offices;
--- Overseas partners of joint ventures personnel brokerage institutions in the Zhongguancun State Independence Innovation Demonstrative Zone may own no more than 70% of the equities.
--Gradually lower the threshold for Sino-Overseas joint ventures and cooperative enterprises in running hospitals and delegate the power of examination and approval to facilitate investors.
---Establish the status of enterprises and individuals as main players in investing overseas, simplifying the verification procedures in their investment overseas and introduce the put-on-file management system.
At present, the experimental project is off to a good start. Statistics show that in 2015, 1,068 foreign capital enterprises were set up in the six major areas for expanding opening, with the amount of investment actually used reaching 9.55 billion U.S. dollars, rising by 10.2% and 62.5%, respectively, accounting for 77.1% and 73.5% of the total overseas investment attracted. The overseas capital actually used in the financial area increased by 15.7 times, accounting for 56.4 of the city total.
It is foreseeable that with the series of policies put in place, Beijing will further expand the opening of the service industry. In the present stage, while investing in the service industry, overseas investors may focus on investment projects that hold back the city’s sustainable development, projects adaptable to the headquarters economy and projects that will contribute to the synergetic development of Beijing, Tianjin and Hebei Province and to the 2020 Winter Olympic games. (Contributed by Ren Feng)