I. Overview of Zhejiang

Situated in the south of Yangtze River Delta and along China’s southeast coast, Zhejiang was named after the Qiantang River, the biggest river in the province, and known as“Zhe” for short. It covers a land area of 105,500 square kilometers and a sea area of 260,000 square kilometers. Under the direct jurisdiction of the province, there are 2 sub-provincial municipalities, 9 municipalities, 33 counties, 20 county-level cities and 36 municipal districts. Hangzhou, the provincial capital, is the economic, cultural, educational, scientific and technological center and the venue for the 2016 G20 Summit. Zhejiang had a resident population of 55.9 million by the end of 2016. It has a long-standing reputation as "a land of fish and rice, home to silk and tea, a place of rich cultural heritage and a tourist paradise".

Picturesque landscapes. Nature has gone out of its way to carve out a picturesque Zhejiang. Lying in a subtropical zone dominated by a monsoon climate, the province, 70% of which is covered by mountains, 10% water and 20% arable land, is blessed with four distinct seasons, a long and serpentine coastline, rich biodiversity, and islands and islets studded in the East China Sea. Zhejiang is a place where mountains, rivers, lakes, seas, mudflats, forests, caves and springs vie for beauty, exquisiteness and elegance. The glittering ripples of West Lake, vast expanse of Thousand-islet Lake, Buddhist haven of Putuo mountain on the sea, grandeur and quaintness of Yandang Mountain, limpidity of Fuchun River mirroring mountains and the sky, bustling boats rowing the Beijing-Hangzhou Grand Canal, billowing of Qiantang River Tides bounced back by cliffs, mumbling streams and mist wisps of Xixi Wetland, houses nestled along the banks of water town Wuzhen and illustrious fragrance of Tang poems all represent the finest of peaceful coexistence. Zhejiang is home to 19 national scenic spots, 27 national favorable tourist cities, 192 4A or above high-level tourist resorts, 1 national tourist resort, 10 national natural reserves, 28 national park cities, 10 national wetland parks and 39 national forest parks. The forest coverage rate reaches 60.96%. The West Lake, Zhejiang Route of the Beijing-Hangzhou Grand Canal and Zhedong Canal have been selected into the World Cultural Heritage and Mount Jianglang in Quzhou has been inscribed on the World Heritage List. Zhejiang is a magnet for tourists. In 2016, 584 million visits were made to Zhejiang by domestic and overseas tourists, creating 809.3 billion Yuan in revenues.

A brilliant culture and galaxy of talents. Zhejiang is one of the birthplaces of the Chinese civilization. Zhejiang boasts a long history, a galaxy of talents and great material abundance. In the Tang Dynasty (618-907 A.D.), Zhejiang started to refer to an administrative area. The Southern Song Dynasty (1127-1279 A. D.) made Hangzhou (known as Lin’an then) the national capital for 150 years. In the Ming Dynasty (1368-1644 A.D.), the region came to be known officially as “Zhejiang Province”. From the early ruins of the old Stone Age in Qiliting Changxing County (1 million years ago) to the new Stone Age relics in Liangzhu (5000 years ago), to Wuyue culture (907-978 A.D.) and Southern Song Dynasty culture(1127-1279 A. D.), to King Goujian of Yue who bode his time to vanquish his archenemy, to Qian Liu the king who protected his people from raging wars all over the country, to Yuefei the National Hero in Song Dynasty whose patriotism goes down in history, to Yu Qian a Ming Dynasty minister who chose to sacrifice for integrity and a clear conscience, to Shenkuo who authored a landmark book summarizing past scientific achievements, to Qian Xuesen who led the program to develop China’s first atomic bomb and hydrogen bomb, to Wang Yangming who combined profundity with virtue, to Zhang Taiyan the master of studies of Chinese ancient civilization, to patriotic poet Lu You and fighting soul of the nation Lu Xun, to the famous Linyin Temple in southeast China and the sacred place of Xiling Society of Seal Arts, to the legendary Wansong Academy and globally renowned Zhejiang University, fine cultural traditions, unique relic sites and generations of masters and talents find their best expression in Zhejiang. For instance, over 1,000 native Zhejiang writers were written into history since the Eastern Han Dynasty (25-220), accounting for one-sixth of the national total. Among all the academicians (or academic members)  of the Chinese Academy of Sciences and the Chinese Academy of Engineering since the founding of PRC, almost one-fifth are from Zhejiang. Zhejiang has 9 state-level Historically and Culturally Famous Cities, namely, Hangzhou, Ningbo, Shaoxing, Quzhou, Linhai, Jinhua, Jiaxing, Huzhou and Wenzhou, 20 Famous Cultural Townships , 28 Famous Cultural Villages and 4 Historical and Cultural Blocks.

Vitality and invigoration. Zhejiang is an amazing land brimming with vitality, with its people leading the national endeavor of innovation and entrepreneurship. The spirit of breaking grounds and entrepreneurship is in the blood of Zhejiang people. The reform and opening up of China has greatly incentivized Zhejiang people’s enthusiasm for entrepreneurship. Starting with street vendor’s load and drum rattles, Zhejiang people have blazed a trail to richness in spite of daunting obstacles and given rise to many historic national firsts, including the first self-employed individual, first private enterprise, first specialized market, first farmer’s city, and a batch of leading enterprises such as Alibaba and Wahaha Group. The number of market entities in per capita terms in Zhejiang has ranked the first in China for many years in a row. In Zhejiang there is 1 businessman in every 11 people and 1 enterprise for 33 people. 138 Zhejiang-based enterprises made China’s top 500 Private Enterprises List published by All-China Federation of Industry and Commerce in 2015, the biggest number in China for 17 consecutive years. Nowadays, with the rising of distinctive towns and congregation of young makers and high-tech enterprises, mass entrepreneurship and innovation has become a new style, a prevailing value and a historical trend.

Harmony and peace. Zhejiang is one of the safest and happiest provinces in China. People in Zhejiang enjoy richness and progress. The per capita income of urban and rural residents in Zhejiang reached 47,237 and 22,866Yuan respectively, ranking the first among China’s provinces and autonomous regions for 16 years and 32 years in a row and reducing the ratio gap to 2.07:1. Zhejiang has removed the underdeveloped status of 26 counties and obliterated poverty defined by an annual income of 4,600 Yuan or less. People live a happy, safe and free life here. Criminal cases, petitioning by letters and visits, safety accidents in industry have all seen reduction in numbers. With over two thirds of fiscal revenues devoted to people’s livelihood, people in Zhejiang receive proper education, health care, old-age support and due reward for hard work. In each county or county-level city and district, compulsory education and basic healthcare and pension system has been provided for. People in Zhejiang support and care for each other, and touching stories such as the most beautiful mom, the most beautiful dad, the most beautiful college student, the most beautiful driver and the most beautiful traffic policeman have become fashions inspiring a new way of life.

Endeavor for excellence and prosperity. Zhejiang’s 2016 GDP reached 4648.5 billion yuan, growing 7.5%; fiscal revenues 922.5 billion yuan, of which local fiscal revenues 530.2 billion yuan, up by 7.7% and 9.8% respectively. In May 2015, General Secretary Xi Jinping visited Zhejiang and instructed Zhejiang to continue to lead the countries in good practices and economic development. During the G20 Hangzhou Summit, General Secretary Xi Jinping required Zhejiang to uphold Zhejiang Spirit, work hard to lead the country and ride the tide of times. Zhejiang government has made the solemn promise to its people that illegally established buildings, sewage water and a filthy environment will by no means be part of a moderately prosperous society. Firstly, Zhejiang is adapting to the new normal, forge ahead with special programs including renovation of old residential areas, factories and urban villages, dismantling of illegal buildings, five water-treatment programs, investment attraction contributed by overseas Zhejiang entrepreneurs, innovation-driven development, shifting some traditional enterprises to other places and introduce new ones with advanced productivity, replacing traditional labor with machines to improve efficiency, reutilize land to make greater space for development, beautifying the environment along rivers, mountains, roads and railways, crackdown on illegal activities on the sea, and accelerate development in 7 major industries, namely, IT, environmental protection, health, tourism, fashion, finance, and high-end equipment manufacturing, so as to quicken the pace of supply-side reform and gain a vantage point. Secondly, Zhejiang is also promoting the development of Zhejiang Marine Economy Demonstration Zone, New Area in Zhoushan Archipelago, and Pilot Program for Comprehensive Reform in International Trade in Yiwu, Experimental Zone for Comprehensive Financial Reform in Wenzhou, China (Hangzhou) Cross-Border E-Commerce Comprehensive Pilot Zone, and Hangzhou National Independent Innovation Demonstration Zone. Governments are working hard to streamline administration and delegate powers so people will only need to go to relevant department once to get things done.  Zhejiang will actively participate in the Belt and Road Initiative and the Yangtze Economic Belt and reinvigorate its institutional advantage. Thirdly, Zhejiang is making headway in the integration of urban and rural development, implementing the strategy of new urbanization and metropolitan area-driven development, reforming prioritized towns and nurturing small cities, building a beautiful countryside so as to achieve greater balance in the development of urban and rural areas.

II. Overview of Zhejiang’s Commerce Development 

Zhejiang’s commerce departments at all levels have been pressing ahead with supply-side structural reforms, spearheading the Belt and Road Initiative and a new round of opening-up, to maintain the growth momentum and benefit Zhejiang’s people. Many annual events, such as Zhejiang Investment & Trade Symposium, West Lake Expo, China Yiwu International Commodities Fair, Zhejiang Commercial Service Fair, are vital platforms for Zhejiang to engage in the global economy. 

In the first half of 2017, Zhejiang’s trade in goods reached 177.8 billion USD, up 19.5%. Export in goods was 134.8 billion USD, representing 12.9% of the national total, and import was 43.1 billion USD. The exports structure had been significantly improved, with electronic, mechanical and high-tech products as the mainstay and more added value generated in traditional sectors such as textile and apparel. Imported products mainly include resources, energy products, machines and equipment. Trade in services topped 24 billion USD, up 18.2%, of which export was 15.6 billion USD and import 8.3 billion USD.

Zhejiang has been making efforts to facilitate foreign investment for better use of foreign capital. In the first half of 2017, 1,409 foreign-invested enterprises were newly established in Zhejiang with a total FDI of 23.8 billion USD, contract value of 15.7 billion USD and actually utilized FDI of 10 billion USD. By the end of June 2017, there had been 59,459 foreign-invested enterprises in Zhejiang, with a total FDI of 585.5 billion USD, contract value of 334.4 billion USD and actually utilized FDI of 186.3 billion USD. 558 companies have been established by 174 companies of the Fortune 500, with the total investment reaching 29.6 billion USD, and contract value 12.1 billion USD. 

Zhejiang’s outbound investment and international economic cooperation is gaining momentum. In the first half of 2017, 220 enterprises and institutions were filed and approved to make direct outbound investment of 4.3 billion USD. Overseas economic cooperation witnessed a steady growth in the turnover to reach 3.5 billion USD. The overseas project contracting value was 3.4 billion USD, driving the province’s export of equipment, technology, standard and service. The income of expatriate labor sent from Zhejiang was 70 million USD. By the end of June 2017, the province had approved 8,876 enterprises and institutions with a total investment of 65.3 billion USD. Zhejiang’s outbound investment flows to over 144 countries and regions, and both the number and scale of overseas businesses leads mainland China. 

Zhejiang is now home to 21 national economic and technological development zones and 56 provincial economic development zones. The number of national economic and technological development zones, which is only second to Jiangsu across the country, represents 9.6% of the national total. Insides these zones there have been 34,000 enterprises above a designated scale and over 10,000 foreign-invested enterprises. Pillars to local economy, platforms for international development, and regions where industries and land concentrate and functions integrate, these zones take up 62% of the province’s industrial added value, 54% of actual FDI and 47% of foreign trade value, while covering only 7% of the total land area. These zones are further transforming their growth pattern, with cross border business, IT, biomedicine surging and the building of international cooperation parks accelerating.

Zhejiang is home to the fastest growing e-commerce in China. In 2016, e-commerce trade volume exceeded 3 trillion Yuan and online retail sales reached 1.03 trillion Yuan, both ranking the second in mainland China. Online retail sales from local residents reached 525.2 billion Yuan, up 30.9%. In the first half of 2017, online retail sales reached 535.1 billion Yuan. Online retail sales from local residents reached 279.7 billion Yuan, up 28.2%. E-commerce has grown into a sector of which output exceeding one trillion Yuan and was spoken highly of by President Xi during the G20 Summit Hangzhou 2016.

Zhejiang boasts the biggest number of “National E-commerce Demonstration City”, namely, Hangzhou, Ningbo, Wenzhou, Taizhou and Yiwu. Hangzhou is the first city in China to be nominated to launch cross-border e-commerce pilot program and Ningbo is among the second group of such cities. Zhejiang boasts a high concentration of well-developed e-commerce platforms. Third-party platforms such as Alibaba B2B, Taobao and Alipay which belongs to Alibaba Group constitute the world’s largest platforms for B2B e-commerce transaction, online retail sales and payment. Leading websites of particular industries, such as ChemNet China and Efu, spring up. There are 300 e-commerce industrial bases, over 2.1 million online shops across Zhejiang and several hundred enterprises each with sales of over 100 million Yuan. More than 3,000 enterprises, specializing in IT service, warehousing and logistics, sales and marketing, video and art design, provide service for e-commerce enterprises. 

i．Distinctive Towns

In April 2015, Zhejiang Provincial Government issued Instructions on Accelerating the Planning and Building of Distinctive Towns, and fully launched the establishment of distinctive towns. Unlike other jurisdictions, distinctive towns are platforms that integrate culture elements, tourism and community functions for sustainable development of specific industries. The planning area of a distinctive town is around 3 square kilometers, about half the size of West Lake and built according to the criteria of 3A scenic spot. The industries of distinctive towns cover nine sectors, namely, advanced manufacturing, IT, tourism, fashion, environment protection, healthcare, finance, cultural and creative industries, and traditional industries.

There have been 78 provincial–level distinctive towns. In 2016, the 78 towns attracted a total investment of 112.8 billion Yuan and drew sales of 461.5 billion Yuan. Investment in the nine sectors reached 70 billion Yuan and sales 318.3 billion Yuan. More than 10,000 startups were set up and recruited some 20,000 intellectuals.

Ten provincial-level demonstration distinctive towns

Fund Town of South Yuhuang Mountain of Shangcheng District

Yunqi Town of Xihu District

Dream Town of Yuhang District

Intelligent Automobile Town of Ninghai District

Cosmetics Town of Wuxing

Photovoltaic Town of Xiuzhou

Chocolate Sweet Town of Jiashan County

Sock Town of Zhuji County-level City

Rosewood Town of Longyou County

Celadon Town of Longquan County-level City

ii. Economic Cooperation Zones in Foreign Countries 

The provincial government encourages and supports private enterprises to build economic cooperation zones in other countries. As of now, there have been 6 economic cooperation zones (4 at national level and 2 at provincial level) in countries such as Thailand, Russia, Vietnam, Uzbekistan, Nigeria and Serbia, with a total planned area of 21.23 square kilometers, investment of 3.6 billion USD from 454 companies, and created 17,302 new jobs locally. Zhejiang leads mainland China both in number and scale of economic cooperation zones.

National economic cooperation zones in foreign countries

Thai-China Rayong Industry Zone

Vietnam Longjiang Industry Park

Russia Ussuriysk Economic Cooperation Zone

Uzbekistan Peng Sheng Industry Park

Provincial economic cooperation zones in foreign countries

Yuemei (Nigeria) Textile Industry Park 

Serbia Belmax Logistics Center

iii. Parks for International Cooperation 

Zhejiang began to build international cooperation parks and identified first group of 16 such parks since 2015. Currently, the 4 national-level and 11 provincial-level parks, together with those being built, form a “4+11+N” pattern in Zhejiang’s international drive. The parks aim to keep abreast with the industrial transfer of certain countries as well as their investment intentions, and promote the cooperation of industries and high-end projects via interaction among governments, parks and industries. These parks pave the way for foreign enterprises to access China, encourage Chinese local enterprises to go global, and serve as bridges for economic collaboration and cultural exchanges among relevant parties. 

International cooperation parks

China-Italy (Ningbo) Ecology Park

China-Australia Modern Industry Park (Zhoushan)

China-Czech (Pujiang) Industrial Cooperation Park

Singapore-Hangzhou Technology Park

Zhejiang-China-Switzerland (Xiaoshan) Industry Park 

Ningbo-Northern Europe Industry Park 

Wenzhou-ROK Industry Park 

Zhejiang China-Germany (Changxing) Industrial Cooperation Park 

Zhejiang China-Germany (Jiaxing) Industrial Cooperation Park

Zhejiang China-Netherlands (Jiashan) Industrial Cooperation Park

Zhejiang China-Japan (Pinghu) Industrial Cooperation Park

Zhejiang China-France (Haiyan) Industrial Cooperation Park

Zhejiang China-ROK (Quzhou) Industrial Cooperation Park

Zhejiang China-Denmark (Shangyu at Hangzhou Bay) Industrial Cooperation Park

Zhejiang China-Germany (Taizhou) Industrial Cooperation Park

iv．China (Zhejiang) Free Trade Zone Pilot Area

In March, 2017, the State Council of China officially passed approval for seven provinces and municipalities--Zhejiang included--to establish free trade zones. The conference of planning and construction of China (Zhejiang) Free Trade Zone on April 1 marked the official launch of free trade practice in the province. The free trade zone is located in Zhoushan and covers an area of 119.95 square kilometers.

Five aspects of the free trade pilot will be emphasized, namely, transforming government functions, promoting investment facilitation and trade liberalization in the whole industrial chain of oil products, exploring new means of trade and investment and system innovation in finance management and customs clearance supervision. It is expected that with three years’ efforts, the free trade zone will grow into a free trade port in line with the international standard, which would facilitate investment and trade, especially the allocation of bulk commodity such as oil products, form high-end industry clusters, build standard legal environment, and improve financial service. 

The China (Zhejiang) Free Trade Zone will provide Zhejiang with best opportunities to explore for future reform and opening-up. On a higher level, the free trade zone will promote investment from home and abroad and better embrace international economy.

v. Yiwu-Ningbo-Zhoushan Open Corridor

The Yiwu-Ningbo-Zhoushan Open Corridor is a strategic measure to further the implementation of the Belt and Road initiative and Yangtze River Economic Zone strategy and to contribute to a more open economic structure at the provincial level. The Corridor will set Ningbo, Jinhua, Yiwu and Shaoxing as growth centers in order to tap the combined potentials of neighboring platforms such as China (Zhejiang) Free Trade Zone, Zhoushan River-Sea Transport Service Center, Yiwu Comprehensive Reform Pilot for International Trade, Ningbo-Meishan New Economic Zone, National Innovation Demonstration Zone, National Development Zone and industry parks for international cooperation. It is expected that a comprehensive open platform featured with well-developed logistics, highly-concentrated resources and elements of development, prominent urban industries and competitiveness will take shape by 2020.

vi．National E-commerce Demonstration Pilot

Wensan Street Electronic Information Center, Hangzhou

E-commerce Center, Ningbo

E-commerce Industry Base, Jinhua

E-business Service Center, China Yiwu Commodity City 

Hangzhou East E-commerce Park

Hangzhou Northern Software Park

Ningbo Software and Service Outsourcing Industry Park