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Why are so many foreign companies investing in Hohhot?
Hohhot is a culturally diverse city of 2.4 million people that is becoming a nexus of trade in northwest China.
In the past 4 consecutive years, Hohhot has had the highest rate of GDP growth among China¡¯s 27 provincial capitals. Last year alone, Hohhot¡¯s GDP jumped 33.3% from 40.6 billion yuan in 2003 to 60 billion yuan in 2004. The key industries driving this growth are the electronic information systems (40%), dairy (30%), and electric power (20%), including coal, solar and wind generated energy.
Hohhot¡¯s economic growth is driven by four key factors including:
- Strategic geographic location
- Valuable untapped natural resources
- Favorable government support
- Competitive workforce
- Inner Mongolia shares its border with 9 neighboring Chinese provinces to its east, west and south and with 2 countries to its north, Russia and the Republic of Mongolia.
- Convenient and quick access to two of China¡¯s major economic centers, Beijing and Tianjin
- 45 minutes by air to Beijing
- 12 hours by rail to the seaport of Tianjin for convenient import and export of products from North America and Southeast Asia
- Strategic land port to Central Asia, Russia, the Republic of Mongolia, and Europe
- Hohhot to Frankfurt, Germany by rail in 18 days
Hohhot sits in the midst of China¡¯s ¡°resource belt¡±, providing valuable natural resources that fuel the energy demand across China, and provides raw materials for its factories.
Hohhot and its surrounding regions in Inner Mongolia provide:
- Rare Earth Minerals: 70% of China¡¯s (and 50% of worldwide) total rare earth reserves mined for use in petrochemical, electronics and mechanical industries
- Valuable Minerals: Gold deposits, iron ores, granite, and graphite
- Natural Gas: China¡¯s largest natural gas fields and over 600 Billion cubic meters of natural gas reserves
- Coal: Abundant source of coal used to supply energy needs across China. Supplies 1/5 of Beijing¡¯s electricity needs with its coal reserves
- Wool: 80% of the world¡¯s wool used for cashmere
- Dairy Products: Source of a majority of China¡¯s total dairy production with 2 of China¡¯s biggest dairy corporations, Meng Niu and Yili
As an autonomous, minority region in northwestern China, Hohhot enjoys many special incentives made available by China¡¯s Central Government:
- ¡°Go West¡± and ¡°Minority Region¡± Preferential Policies: These policies offer special financial and tax incentives, as well as relaxation of certain other government policies in order to encourage and boost foreign direct investment
- Economic Development Zones: 3 nationally approved Economic and New Technology Development Zones specializing in electronics, high technology, power production, textiles, dairy and food processing, and pharmaceuticals
- Export Processing Zone (EPZ): Provides ease of import and export, with dedicated custom offices and bonded factory warehouses.
- Factories in the EPZ that export at least 51% of their production enjoy exemptions from VAT and ease of logistics support.
- Products manufactured in the EPZ can undergo custom inspection within the EPZ and will not have to be re-inspected before leaving China for destinations in North America, Europe or other global locations.
Hohhot is the educational hub of the region, supplying highly trained, affordable laborers, engineers, professionals and managers for its industries.
- Regional Axis of Education: With 17 universities and colleges, Hohhot graduates over 14,500 undergraduate and graduate students each year, providing an abundance of local, highly educated recruits
- MBA Programs: 2 MBA programs providing experienced managers with the management training necessary to support the recruiting needs of foreign companies.
- Proximity to Beijing and Tianjin: The nearness of these two urban centers provides Hohhot-based companies with many convenient options when hiring employees and managers
- Highly Skilled, Lower Costs: Leveraging Hohhot¡¯s lower cost of living, her labor costs are on average 10 ¨C 20% lower than comparable labor from other parts of China.