City Report: Xiamen

Tuesday, December 26, 2006 22:22

Xiamen is located on the southeastern coast of China across the Taiwan Strait from Taiwan and covers a total area of 1,565 square kilometers. With a population of 1.5 million urban residents, Xiamen has six districts: Siming, Huli, Jimei, Haicang, Tong’an and Xiang’an.

As one of the first four special economic zones (SEZ) in China, Xiamen has enjoyed a high amount of concentrated FDI from Taiwan and Korean companies setting up light and medium manufacturing sites. Xiamen enjoys provincial level autonomy and local legislative power in economic administration, and has become one of the most important ports in China for international trade and cross-Straits trade.

Economic Overview:

the three pillar industries as electronics information, chemical and machinery using high-tech and advanced technology.

Of the 200 or so electronics industry, 2 are ranked among the “Top 100 National Electronics Companies”, 5 among the “Top 100 Foreign-invested Electronics Enterprises in China” and 4 among the “Top 100 Enterprises of Electronic Components in China”. It contributes nearly 40% to Xiamen’s total industrial output value.

Xiamen is the home to famous domestic and international brands as Xoceco, Amoisonic, Dell, Matsushita, TDK and FDK. The production and sales of digital TV, faxing machines, auto audio, disc players, telephones, compact discs, transformers, capacitors, IC fix frames, relays and photo-electric equipment list Xiamen among the top in China.

Xiamen has about 180 machinery and metallurgy companies and it is superiorly established in various sectors including engineering machinery, power distribution equipment, large and medium-sized buses, tungsten products and aviation maintenance. Encouraged areas of investment: engineering machinery, power distribution equipment, aviation maintenance, hard alloy, automobile, ship maintenance and building, and new tech mechanical products

Xiamen MAcro Graph

Main chemical products manufactured are:

  • inorganic chemicals
  • organic chemicals
  • chemical fertilizer
  • terylene chemical fiber
  • photosensitive chemicals
  • rubber products
  • fine chemical products, etc

Foreign Presence:

Xiamen is the Asia headquarters for two multi-national companies: Kodak and Dell. The numbers of foreigners living and working in Xiamen continues to expand. The city is considered one that is very comfortable to live in climate wise and already has large Taiwanese and Korean communities.

Xiamen’s investment has historically been higher than other cities due to its port, location, and ties within the Taiwanese business community. Due to its location, the primary investors have been Taiwanese and Korean companies.
Xiamen FDI graph

Recent investors have primarily been from high technology industries and are investing in high dollar value investments. Investments have continued to grow steadily, with 453 contracts signed in 2004 for 1.80 billion USD. As Dell and other high tech OEMs continue to invest in Xiamen, it can be expected that many of the small and medium suppliers will soon follow with their own investments.

Wrap Up:

Xiamen is a beautiful coastal city that will continue to be critical to China’s success as a trading port for the Pearl Delta and high tech manufacturing. Historically it has enjoyed the attention of not only Taiwanese investment, but also the investment of the Chinese government (Taiwan is across the straight). With the rise of China’s stance as the world’s “factory floor”, Xiamen developed rapidly from Taiwanese and Korean investment.

There is little doubt that Xiamen will play a critical role in China’s future as the port alone will be a strategic exit port for goods manufactured south of Ningbo and North of Guangzhou. As the costs of manufacturing rise in Shanghai and Guangzhou, the areas around Xiamen will continue to grow, and this will allow for Xiamen’s port to continue seeing heavy trade flow.

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3 Responses to “City Report: Xiamen”

  1. China Law Blog says:

    December 29th, 2006 at 10:55 am

    China Law Blog Sliding: Adds The Humanaught To Blog List…

    Explanation required. When I started this blog nearly a year ago, I vowed our blogroll would be sacrosanct. This is a blog about law and business in China and there would be no what I call observational blogs on my…

  2. Chongqing’s Investment Zones | All Roads Lead To China says:

    May 30th, 2007 at 2:54 am

    […] Stay tuned for part IV… Xiamen (Macro-profile here) […]

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    June 6th, 2007 at 5:01 am

    […] up..Xiamen (Macro-profile here) Bookmark […]

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