Nanning Investment Climate & Business Opportunities

Looking for Investment & Business Opportunities in Nanning?

Guangxi Zhuang Autonomous Region

Western China Development and Guangxi
China’s modernisation drive has two important strategies since 1980s. One is to accelerate the opening up of China’s east coast enabling it to develop first. Second is to accelerate the development of China’s central and western regions. In view of this, China welcomes ASEAN entrepreneurs to China for economic, trading and investment activities and their participation in the development strategy of China’s western regions.

Guangxi is located in Southwest China and contains a significant coastline on the South China Sea, (Beibu Gulf). Also known as Guangxi Zhuang Autonomous Region, this area is located in a highly favourable geographical position, with a total land area of 236,700 square km and having direct access to river, sea, as well as an international border. It serves as the most convenient gateway linking Guangdong, Hong Kong and Macao SARs with west China.

Guangxi has come up with several attractive policies to develop the business conditions like talent support, construction, electricity, and water supply as well as financial assistance. Hence, it’s a great time to explore your business opportunities here in this region.

Southern Transport Corridor
As a key node along the “Southern Transport Corridor”, Guangxi is the only province in western China with open sea port facilities and overland roads connected to South-east Asia. The ‘corridor’ connects the Silk Road Economic Belt with the 21st-Century Maritime Silk Road, linking the land and sea trade routes of Belt Road Initiative (BRI).

Strategic Location
Guangxi uniquely faces it south to the ASEAN region. Its unique geographical location makes it a strategic gateway and a business and commercial hub that plays an important part in China’s opening to the ASEAN region. With the China-ASEAN Free Trade Area, it is also playing an important strategic role in connecting southwest China, south China, central China and ASEAN markets. Over the years, Guangxi has established strong ties with 53 ASEAN cities, boosting significantly trade and economic cooperation within these regions.

Some Singapore companies such as PSA and PIL have already put down stakes in Guangxi and started a few projects near Nanning. This is a great testimony of huge business opportunities and attractive investment climate in the Guangxi region.

Guangxi Beibuwan Beibu Gulf Economic Zone - Great Opportunities For Investment

Guangxi Zhuang Autonomous Region’s success has been driven by the development of the Beibu Gulf economic zone, which consists of 6 cities – Nanning, Yulin, Chongzuo, Fangchenggang, Qinzhou and Beihai.

Special Economic Zones (SEZs) was established in 1984 by China. These SEZs are strongly favoured by business owners are they can capitalised on the low labour and land costs. Also, the government will offer attractive investment schemes for foreign investors.

On August 26 2019, Guangxi is one of the 6 new provinces across the country to be added to the pilot free trade zones (FTZs). This move raises the total number of China’s FTZs to 18 – aligns with the government’s ongoing reforms to open up China’s economy.

Guangxi has been tasked to step up cooperation with the ASEAN region in its pilot FTZ, focusing on in-depth cooperation along the border areas, promote innovative reforms in the cross-border fields of trade, logistics, finance, tourism, and labor cooperation, as well as deepen mutually beneficial cooperation with neighboring countries.

The Beibu Gulf economic zone has been developing at an annual economic growth of 11.7 percent over the past decade, owing its fast development to the central government’s decision to include it as China’s first international and regional economic cooperation zone in Guangxi since February 2008.

These cities on the shoreline of Guangxi’s Beibu Gulf have become hot spots for business investment. Qinzhou, Fangchenggang and Beihai ports serve as an important transit in the sea-rail freight routes under the New International Land-Sea Trade Corridor.

These ports now operate shipping routes for 250 ports in over 100 countries and regions.

Nanning Investment & Business Opportunities

Nanning, the capital city of Guangxi, covers a total area of 22,112 square km and has a history of over thousand years. Nanning has won the UN-Habitat Scroll of Honour Award – giving it the reputation for being the best place for human inhabitation in western China. It is also One of the Top 10 National Eco-environmental Friendly Cities, in which 39% of the city is covered by trees.

Economic Growth
Nanning has achieved great momentum in its economic development in recent years through favourable business and investment policies from the government. Regulations formulated are attractive to global companies and supportive of business growth. Incentive schemes and programs are introduced to encourage start-ups and the setting up of businesses too.

Fortune Global 500 Companies
The growth and the potential of a city can be witnessed by the presence of large multinational companies which could be company headquarters, regional business centers, research and development centers, logistics centers and others. Nanning has various types of industries and businesses. There more than 30 Fortune 500 companies including Alibaba, Apple, Bank of China, rolling stock manufacturer CRRC, Nike, Roche, and real estate developer Vanke that have established business here. These companies will have evaluated Nanning for its business attractiveness based on various factors such as its strategic geographical location, economic growth, infrastructure developments.

Strategic Location
Nanning is China’s nearest capital city to the ASEAN countries. The strategic location of Nanning with regards to its proximity to ASEAN is another key factor for business investments here. Also, it is a strategic node in China’s Belt and Road Initiative.

Consumption Growth
The active and acceleration Nanning consumer market represents one of the single most important growth opportunity in China’s domestic market. Irrespective of the growth rates , the size of the consumer market makes it a tremendously attractive market in absolute terms.

Overall, Nanning being a tier-2 city compared to tier-1 urban cities has definite benefits which include favourable demographics, rapid income growth, accelerating consumption growth, a faster pace of urbanisation, and improved accessibility and connectivity.

China and ASEAN Investment Cooperation

ASEAN
The Association of Southeast Asian Nations (ASEAN) was established in 1967 with Singapore, Malaysia, Indonesia, Thailand and the Philippines as founding members. Since then, ASEAN has outgrown to encompass ten nations – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Under the ASEAN Charter, the ASEAN Summit is the supreme policy-making body of ASEAN. It comprises the heads of state or government of each member state. The main aims behind the establishment of ASEAN were to promote economic growth, regional peace and stability, active collaboration, and mutual assistance on matters of common interest to all the members. ASEAN also seeks to maintain close and beneficial cooperation with existing regional and international organisations that share common aims and objectives

In 2018, ASEAN countries have a total population of 660 million people and a combined gross domestic product (GDP) of $2.92 trillion. This makes it the 3rd largest trading bloc in Asia and it is the 5th largest in the world. More significantly, is that ASEAN’s GDP expansion from 2000 to 2017 is 450%. The group has played a central role in Asian economic integration, signing six free-trade agreements with other regional economies and helping spearhead negotiations for what could be the world’s largest free trade pact.

China and ASEAN has continuously work to tap the potential for mutually beneficial cooperation in many areas such as trade, investment, science and technology, tourism, telecommunications, machinery and electronics, medicine, environmental protection and human resource development.

In 2019, ASEAN had already become China’s second largest trading partner with trade valued at US$644 billion. The strategic importance of China ASEAN trade can be witnessed also through the numerous ministerial meetings held such as the ASEAN-CHINA Ministerial Meetings held over the years. In the first three months of 2020, The Association of Southeast Asian Nations (ASEAN) became China’s largest trading partner surpassing both the European Union (EU) and the United States.

The latest Regional Comprehensive Economic Partnership (RCEP) multilateral trade and investment initiative which includes China and ASEAN, in addition to Australia, New Zealand, Japan, and South Korea signals the region’s collective commitment to open trade and investment. In November 2019, the 15 Asian countries agreed to move forward with RCEP. After eight years of negotiations, the regional comprehensive economic partnership (RCEP) was signed on November 15 2020. With its conclusion, we will see greater trade facilitation and stimulation between ASEAN and CHINA.

In recent years, ASEAN countries have intensified their involvement in China’s economic initiatives under the BRI and the Asian Infrastructure Investment Bank (AIIB). Therefore, BRI will contribute to further regional economic development and enhance ASEAN-CHINA relations too.

All these means is that with greater regionalisation and globalisation, ASEAN countries will deepen its engagement with China as one of its most important trade and investment partner.

The CHINA-ASEAN Exposition
With the objective to promote, encourage and enlarge trade cooperation between China and ASEAN, the China -ASEAN Exposition also called CAEXPO for short it is an economic development and trade event between China and the countries of ASEAN. This major event features trade exhibitions, briefings, business discussion, contract signings and other key business engagements activities. As a strategic government-sponsored event, it is well supported by China and the ASEAN nations involve and attracting strong participation from business enterprises.

CAEXPO has been held in Nanning for more than 15 years since 2004, making this city its permanent venue. This strategic annual exposition has boosted China-Asean trade since its inception in 2004. From the day when Nanning was selected as the permanent host city of the China-ASEAN Expo (CAEXPO), this Green City of China, has grown to become a major hub for bilateral trade and relationships between the Association of Southeast Asian Nations (ASEAN) and China.

In 2019, the CAEXPO is its 16th year were held from September 21 to 24 in which over 2.800 enterprises from ASEAN and China showcased their products and items to over 300,000 visitors to the event. Exhibitions and activities at the expo has promoted actively China – ASEAN cooperation in finance, tourism, e-commerce, trade, investment, digital economy, science and technology. The China (Guangxi) pilot free trade zone promotion meeting and investment cooperation negotiation were held whereby Nanning, Qinzhou and Chongzuo in the pilot free trade zone were promoted to help enterprises from all over the world to seek new business opportunities in this area. The contracted projects involved international e-commerce, electronic technology, port trade processing and manufacturing, cross-border logistics, and urban complex, cross-border trade, cross-border tourism and shopping, international professional market and other fields.

In 2020, The 17th China-the Association of Southeast Asian Nations (ASEAN) Expo has been held in Nanning, Guangxi from November 27 to 30. In his speech at the opening ceremony, Chinese President Xi Jinping said that the China-ASEAN Expo and the China-ASEAN Business and Investment Summit are pragmatic platforms for promoting regional economic integration.

China's Economic Growth and 'Belt and Road' Initiative

China’s economic growth has been phenomenal and this can be attributed to the country’s enacted reforms in recent decades in the direction of a more open economy. These reforms have contributed to greater productivity growth and China’s economic growth. The Fortune’s 2020 Global 500 ranking of the world’s largest corporations shows that for the first time, there are more Global 500 companies based in China than in the United States – 124 versus 121 as shown below.

Key Phases Driving China’s Economic growth from 2000:

1) World Trade Organisation entry (2001)
2) Belt and Road Strategy (2013)
3) Made in China 2025 policy (2015)

1) World Trade Organisation Entry in 2001
Globalisation will be key to many countries economic success in the 21st century. Economically, globalisation is the phenomenon in which economies become increasingly interconnected and integrated due to the increase in the international trade of goods and services, the increase in capital flow and the increase in labour flow. Recent studies has segmented the globalisation process into four key components: an increase in international trade, an increase in financial flows across borders, a greater internationalization of production processes, and the harmonization of economic institutions.

The World Trade Organization (WTO) is a global international organization dealing with the rules of trade between nations. Its function is to ensure that trade flows as smoothly, predictably and freely as possible. It provides a forum for negotiating agreements to reduce the obstacles to international trade and to ensure a level playing field to all countries. Free trade is one of the key contributing factors towards a more globalised world as it promotes trade between economies. China has been a global trading partner with nations around the world with its 2001 accession to the World Trade Organisation (WTO).

The rise of international trade and the rise of Multinationals (MNCs) have also intensified globalisation. In 2020, Fortune’s Global 500 ranking included a total of 133 Chinese companies (including those from Hong Kong and Taiwan) surpassing 121 American companies, an indication of the ascent of Chinese firms for global business. These MNCs and their global strategies have become major determinants of trades flow the location of industries and other economic activities around the world. Also, multinationals and organisations know that globalisation is an important step for building brand value and sustainable competitiveness.

2) Belt and Road Strategy in 2013
The Belt and Road Initiative (一带一路), previously known as One Belt One Road or OBOR for short, is a global infrastructure development strategy adopted by China in 2013. The BRI comprises a “21st Century Maritime Silk Road” which is a sea route connecting China’s coastal regions with south-east and south Asia, the South Pacific, the Middle East and Eastern Africa, all the way to Europe, and a “Silk Road Economic Belt” – a trans-continental passage that links China with south-east Asia, South Asia, Central Asia, Russia and Europe by land. The BRI is about openness, development and cooperation, and it calls for pursuing joint development and sharing benefits on the basis of equality and mutual benefit. Since it started, over 60 countries and international organisations have expressed interested to be part of the Initiative, and China has reached cooperative agreements with many of them. The Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB) has been signed, the Silk Road Fund has started implementing specific projects. In addition, a number of major multilateral and bilateral projects are well underway.

Nanning will play a key role with regards to China’s Belt and Road Initiative (BRI) due to its geographical location in relations to the silk roads.

3) Made in China 2025
This was launch to enhance the country’s competitiveness and also increase the proportion of indigenously manufactured components in ten ‘core’ technology sectors to 70% by 2025.

Special Incentives For Foreign Companies

There are lots of business opportunities and business investments in Nanning waiting for you. Be among the first to do business Guangxi Beibu Gulf and Nanning as it will provide you with that first-mover advantage that many businesses can benefit from.

It is now easier for foreigners to set up business in China with reduced minimum capital requirements for registering a limited liability company.

Start-up Rental Subsidy

There is a rental subsidy of RMB 1500 to RMB 2000 for eligible start-ups

Tax Exemption

For all local and foreign companies, there is 100% tax exemption for the 1st RMB 100,000 in the first 3 years of incorporation.

Want To Start A Business In Nanning?

There are many areas you can look into if you are considering to start a new business in Nanning Guangxi as it is still a tier-2 city in China. Take good advantage of the existing attractive and favorable government policies and incentive schemes.

Business and Entrepreneurs Network

We have an strong network of business owners and entrepreneurs from Singapore who are now actively capturing on the opportunities in Nanning and China. The business types represented in our network includes food & beverage, education, health and wellness, professional services and many others. For the benefit of our members in this network, we organise networking events in Singapore and in Nanning to facilitate collaboration of business opportunities.

If you are interested to know to join our next networking session, our business network, or learn more on the numerous Nanning business and Nanning investment opportunities, please contact us.

Find the right business partner or service provider can provide you with a definite advantage in getting started your business in Nanning, China. The right partner can provide insights of the local market including local rules and regulations based on their business experience and contacts of the operating environment. In the long run, having a trusted and strategic local partner can be a critical determinant in your success in Nanning and in the Chinese marketplace. As such, through our extensive network and expertise, we have highlighted trusted and dependable partners that can assist you to set up and grow your business in Nanning. The various categories of services are featured in the next section below and include – Business Consulting, Legal Services, Accounting Services, IT support services, Marketing Services and others.

We believe having the right strategy, the right partners and a realistic business plan implemented with conviction will bring you success in doing business in China and Nanning.