Why President Michael D. Higgins of Ireland’s State Visit includes the dynamic metropolis of Hangzhou.
The most beautiful city in China
In the 13th century Marco Polo is said to have described Hangzhou, which is situated in east China along the Qiantang River, as “the city of heaven, the most magnificent in the world”.
While many of the world’s metropolises can also be portrayed as magnificent, Hangzhou, the largest city in Zhejiang province, and one of China’s seven ancient capitals, is beyond doubt one of China’s most eye-catching and affluent cities.
With a GDP per capita of over €12,200 and a population of 8.8 million people, Hangzhou is home to two UNESCO World Heritage Sites:
One of the most picturesque wonders of China, the West Lake Cultural Landscape of Hangzhou, comprising the tranquil West Lake and the hills surrounding its three sides, has inspired famous poets, scholars and artists since the 9th century. It comprises numerous temples, pagodas, pavilions, gardens and ornamental trees, as well as causeways and artificial islands.
Equally breath-taking is the Grand Canal, which was declared a UNESCO World Heritage Site in June this year. Dating back to the 6th century and stretching 1,776 kilometres (1,104 miles) from the southern terminus of Hangzhou north to Beijing, the Grand Canal is the oldest and longest man-made waterway in the world, at least 10 times the length of the Suez Canal and 23 times that of the Panama Canal.
Another symbol of the city is the sight of one of China’s most spectacular natural phenomena, the roaring Qiantang River tidal bore, or Silver Dragon, the world’s largest tidal bore that rising to a height of as much 12 metres (40 feet) rolls upstream every September.
That Hangzhou is also the capital of China’s national drink, tea – its celebrated West Lake LongJing, or “Dragon Well”, green tea, consistently ranking first among China Top 10 leading teas – and home to one of the largest and wealthiest Buddhist temples in China, the stunning Lingyin Temple with a history stretching back 1,600 years, it is no wonder that Hangzhou’s tourism industry caters for upwards of 93.16 million visitors a year.
Beauty and business go hand in hand
On Friday 12th December, on his first state visit to China as a guest of President Xi Jinping, President Michael D. Higgins of Ireland will take a 45 minutes journey on the Shanghai–Hangzhou High-Speed Railway aboard the ‘Harmony’ train. Not only symbolic of China’s rapid technological advancement – the 202 kilometres (126 miles) long line, designed for commercial train service at 350 km/h (217 mph) was built in 20 months – the trip is an explicit induction to the vibrant city of Hangzhou with its strong culture of innovation.
The city has strong economic growth of 8%, a business-friendly and farsighted government, an abundance of research and development facilities, and proximity to business professionals throughout the Yangtze River Delta, all of which have contributed to Hangzhou’s recognition as both the capital of China’s online industry, and a celebrated hub of entrepreneurship.
A study published last August by Spear’s (in association with leading wealth consultancy company WealthInsight source: http://www.spearswms.com/news/new-data-reveals-where-the-worlds-billionaires-are-born-4345872#.VA0nMEi5_Mlhttp:// ) ranks Hangzhou 15th of the top 25 global cities “where billionaires are born”, the city being home to six billionaires, all of whom are self-made.
Nobody typifies the new breed of Chinese entrepreneurship in a global era more than former Hangzhou-born school teacher Jack Ma, now China’s wealthiest man, who as the Founder and Executive Chairman of Hangzhou-based E-commerce behemoth Alibaba Group – arguably the world’s largest online and mobile company – leads a group of companies that reached a market value of €188 billion in September 2014. More than at any other of his meetings with China’s political elite, it is likely that at his meeting with Mr. Ma, President Higgins, who will be accompanied by Ireland’s Minister for Finance Michael Noonan, will come to truly appreciate the intrepid, confident, innovative consumerist spirit that makes China an essential market for Irish goods and services exports.
China’s ‘Silicon Valley’, Hangzhou is the stronghold from where Mr. Ma and his colleagues direct the online revolution that is turning China’s retail industry on its head: On the 11th November 2014 Alibaba’s Tmall business-to-consumer platform, an increasingly important platform for foreign retailers to penetrate China, ‘Singles Day’ online retail event achieved sales of around €7.6 billion. They are also plotting Alibaba’s expansion to become a truly global company. Investments in Europe and the USA beckon.
Twenty-seven years ago, when Zong Qinghou, a native of Zhejiang province, was 42, he made his living selling soft drinks and ice cream to schoolchildren in Hangzhou. Today, according to Forbes, Mr. Zong, as Chairman and Chief Executive Officer of Hangzhou Wahaha, China’s leading beverage company that employs over 60,000 people and has over 64 manufacturing facilities, or “China’s drinks king”, is reputed to have a personal fortune of €9 billion making him the sixth wealthiest person in China.
Consistently topping the World Bank’s list of Chinese cities with the best investment climate, and rated by Forbes as one of the top 10 cities on the mainland for doing business, at the end of 2013 there were more than 12,000 foreign direct investment companies operating in Hangzhou while foreign investment surpassed €4.2 billion. Moreover, the city’s total foreign trade volume was almost €50 billion.
80,000 free bicycles, 2,000 electric public buses and 500 electric taxis
Maintaining Hangzhou’s advantage as a great place to do business in constantly requires improving the living environment and quality of life of its residents and visitors, an obligation that does not come without its challenges.
No challenge is more taxing then tackling the ecological problems associated with administering China’s 10th most populated city, and one of the most visited tourist cities in the world, not to mention the country’s deteriorating air quality and ecological environment.
For instance, with well over two million private cars on its roads, making it the second worst traffic congested of any major city in China, Hangzhou’s Leadership has taken a serious attitude on combating the issues by adopting zero-emissions public transportation, namely electric buses and taxis. Last June, in one of the world’s largest all-electric fleets ever ordered, Hangzhou purchased 2,000 long-range, battery-electric transit buses and 1,000 long-range, pure-electric taxi cars from BYD, the Chinese automaker backed by Warren Buffett’s Berkshire Hathaway Inc., whose buses have already hit the streets of London and California.
Anybody who believes that bike-sharing is a European transportation phenomenon should set foot in Hangzhou. Recently rated by USA Today as the world’s best public bicycle sharing system, comprising 80,000 free bicycles leased up to 400,000 times a day, Hangzhou Public Bicycle, which was only launched in 2008, is also likely the most extensively utilised bike-sharing scheme, anywhere.
Another ground-breaking project that is a testimony to the vibrancy of Hangzhou’s advancement is its subway system which opened in 2012, following five years of construction. By 2020, the city plans to five subway lines operating at a total length of 200 kilometres (124 miles).
Ireland and Hangzhou
For Irish exporters struggling to seize upon the lucrative sales opportunities to be had in what is now arguably the world’s largest economy, Hangzhou provides an ideal foretaste of the extraordinary growth in the purchasing power of China’s increasingly affluent middle classes.
The average price of a new home in Hangzhou is about €2,700 per square metre; with daily flights operated by KLM from Hangzhou to Amsterdam, Paris and London are high on the list of preferred destinations for Hangzhou’s high spending tourists; while Rolls Royce, Maserati, Aston Martin, and Gucci showrooms all report brisk business, doubtless boosted by the scores of millionaires recently created by Alibaba’s September IPO.
As individual prosperity rises, people are becoming increasingly conscious about their health and quality of life. For instance, local demand for imported high-quality food and beverages such as dairy and nutritional food products present significant opportunities for Irish suppliers, as do local government –backed projects actively encouraging fuel efficiency, cleaner water, and better sanitation. There are also considerable opportunities in Hangzhou for services-related exports in the tourism and education sectors. With regard to the latter, 36 tertiary colleges and universities with close to 450,000 students are located in Hangzhou, including China’s second best university, Zhejiang University, one of China’s leading medical schools, Zhejiang Medical University, and the renowned China Academy of Arts, the most influential fine arts academy in China.
The challenges for any Irish exporter entering what is still a relatively immature market are apparent. China’s rapid growth since its 1978 opening to the world has not meant greater transparency. Given that the available market information is generally unreliable or misleading, making sound business decisions can be difficult, while a simple misunderstanding of local business practices can harm efforts to develop solid business relationships. As such there is an inherent need for proximity to the customer base for Irish exporters.
The Irish Exporters Association and Accurate Group, an Ireland China market making consultancy have been on the ground in Hangzhou for close to seven years building strong relationships with key business and Hangzhou government decision-makers. Consequently, Hangzhou’s Leadership, including its Party Secretary and Mayor, has visited Ireland on a regular basis.
President Michael D Higgins of Ireland’s State Visit to this fabled city not only is a clear recognition of Hangzhou’s long and illustrious history, it is also a statement acknowledging the potential for extending the hand of trade and friendship between Ireland and Hangzhou, a new gateway for Irish business into China.
For more information about President Higgins of Ireland’s State Visit to China click on the following YouTube video-clip:
– By Niall O’Reilly
Niall O’Reilly, Managing Director of Accurate Group, China Market Makers, and Director for China, Irish Exporters Association, has been based in Hangzhou since 2007.
Managing Director, Accurate Group – Ireland China Market Makers
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