China’s Regions: Overview

Tuesday, October 31, 2006 0:33

With the cities of China once surrounded by walls, parts of the country separated by the various sections of the great wall, and the different geographic condition found in China created regional access to resources, it should come as no surprise that the various regions and people of China have evolved at different paces.

Different climate conditions, proximity to raw materials, access to trading ports, China’s vast size, and poor logistical infrastructure, and you still have a formula for regionalization of resources, markets, and investment.

Even with all the differences though, many economists, politicians, and executives still characterize China as one market or the “China market”, and to do so is to fail to understand the dynamics of China.

For many looking to sell into China, it will be imperative to understand the difference between the regions above. Believing that one logistics provider or agent can cover “China” will lead to failure as each region has different economic conditions, consumer markets, logistical infrastructure, and distribution networks.

For the purposes of the post, and for the future posts, we are going to break the mainland “China” market into 5 sub-regions:

China Regional Map

  • Northeast: Heilongjiang, Jinan, and Liaonning
  • East Coast: Jiangsu, Zhejiang, Fujian, Guangdong, Hebei, Beijing, Tianjin, Shanghai, and Anhui
  • Central: Henan, Hubei, Hunan, Jiangzi, Shaanxi and Shanxi
  • Southwest:Sichuan, Chongqing, Guangxi, Guizhou, Yunnan
  • Outer Provinces: Gansu, Inner Mongolia, Ningxia, Qinghai, Tibet, and Xinjiang

Of course within these categories, it is possible to drill down further to the provincial level, and then the city level (we are currently preparing 15 cities), however it is through our experience that we have created the above categories and over the next 5 weeks we will highlight one region a week.

As recently discussed by Mei Fong of the WSJ in her article Retail’s One-China Problem, one of Wal-Mart’s biggest hurdles will not only be to customize their offering to the local market, but also be able to traverse the difficulties a regionalized China will have on its supply chain.

With China in many ways like the E.U., a truely successful entry strategy will be dependant upon the level of understanding one has about China and the ability to use that knowledge to create a strong strategy to capture the “China” market. Rather than trying to do so all at once with a blanket strategy though, the comapnies that succeed will be those that implement regional (multi-provincial, provincial, or city level) customization of the product or service and rollout over a period of time.

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One Response to “China’s Regions: Overview”

  1. Third Party Logistics News - 3plwire.com says:

    November 1st, 2006 at 7:01 pm

    […] The wise folks over at All Roads Lead to China have some valuable advice for those looking to offer products or services in China: Even with all the differences though, many economists, politicians, and executives still characterize China as one market or the “China market”, and to do so is to fail to understand the dynamics of China. […]

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