On behalf of the organizing committee of this procurement fair, I'd like to extend my gratitude to leaders from the Ministry of Commerce and the Provincial Government as well as representatives from the retail industry for attending this high-level roundtable meeting. Vice Governor You in his speech acknowledged the positive results and the regional influence of the procurement fair. We are greatly encouraged and inspired. Taking this opportunity, I'd like to give you a brief introduction of the environment and trend of Shenzhen's retail business.
Firstly, development of Shenzhen's comprehensive retail industry.
Shenzhen is a city which boasts the fastest development and the highest level of openness in the retail business. During the past 25 years' since Shenzhen's opening up, the annual growth rate of Shenzhen's retail business has been 30.5%. In 2003, the retail volume of social consumer goods reached 80.177 billion yuan, ranking Shenzhen 7th among all the large and medium-sized cities across China. From January to July this year, Shenzhen has moved further up to the 6th. A most important aspect for the growth of retail business is the rapid development of chain enterprises which enjoy an average annual growth rate of 25%. According to statistics from our network planning survey, by the end of 2003 there had been over 200 chain retail enterprises, which opened about 6,800 shops of all kinds in Shenzhen. The retail volume of these chain enterprises accounted for over 40% of the total retail volume of the whole city. Shenzhen was the first in China to open up the retail business for foreign participation. In 1990, McDonald entered Shenzhen. Since 1996, a dozen large foreign enterprises as well as enterprises from Hong Kong and Taiwan, including Wal-Mart, Carrefour, B&Q, Aeon and Parknshop have entered the Shenzhen market. Others like Metro, OBI, IKEA, Decathlon and Kadit are all actively planning to settle down in Shenzhen. The entry of these multinational enterprises has enhanced the modernized development Shenzhen's retail business and stimulated industrial innovation.
Secondly, Shenzhen enjoys a favorable environment for development of the retail industry.
First, the economic development and market response are very fast. Since we entered the new century, the average annual growth rate of Shenzhen's GDP has stood at over 20%, with retail volume of social consumer goods increasing at an annual rate of over 15%. Shenzhen's GDP in 2003 totaled 289.5 billion yuan. The per capita GDP for the first time exceeded 50,000 yuan, ranking the first across the nation. Shenzhen's population of consumption is about 10 million with an average age of 30. This population group, with a fashionable consumption style, has relatively greater purchasing power in China's mainland.
Second, we have an open market featuring fair competition. Shenzhen's retail business is highly opened up with its local enterprises enjoying rapid development through fair competitions with retailers from all around the world. In 2003, fifteen retail enterprises in Shenzhen ranked among China's top 100 retail enterprises. Among those fifteen enterprises there were five foreign funded companies and ten domestic ones. The Shenzhen retail market now boasts great openness and environment of fair competition.
Third, we enjoy a favorable sourcing environment. First, Shenzhen is the key manufacturing base of light industry products. The industrial output in 2003 was 561.3 billion yuan, as calculated to the current price level, ranking Shenzhen the second in China, only after Shanghai. Shenzhen's products like garments, furniture, clocks and watches, toys, jewelry, suitcases and bags, etc. account for a large proportion of production in China and the world as a whole. Shenzhen's production capacity, once closely combined with the resources of manufacturing in the Pearl River Delta, which account for 1/3 of China's export, enables Shenzhen to form a coordinated manufacturing chain, which boasts various products and abundant supply. Second, Shenzhen's logistics are developing rapidly. Shenzhen has a complete and advanced land transportation network. The two key rail lines, Beijing-Kowloon railway and Beijing-Guangzhou railway, join here in Shenzhen. Expressways connect major cities in the Pearl River Delta Region. In only 80 minutes' ride one can get to Hong Kong, Macao, Guangzhou or Zhuhai. The handling capacity of Shenzhen Port will exceed 13,000 TUEs this year, ranking Shenzhen fourth in the world. Bao'an International Airport is the fourth largest airport in China, with seven international freight routes to the US, Canada and South Korea as well as 120 domestic air lines. In the past five years, the international air freight volume has been increasing at an annual rate of 30%. Third, Shenzhen's conference and exhibition business is prospering.
It is expected that this year more than 70 large scale trade exhibitions will be held in Shenzhen, taking up a total floor space of 5 million square meters. Among them, 15 exhibitions will take up over 20,000 square meters of floor space. The Hi-tech Fair, the Consumer Goods Procurement Fair, garment fair, furniture fair, clocks and watches fair, leather products fair, jewelry fair, and a number of other comprehensive as well as specialized fairs have gained importance in China and have had certain influence in the global market. The development of the conference and exhibition business has greatly improved the sourcing environment and stimulated the development of commerce and trade.
Thirdly, Shenzhen's bright prospect in retail business development.
Shenzhen's economic development in recent years has contributed to the increase of residents'income, upgrading of the consumption level and the enhancement of the consumption capacity. Meanwhile, the expansion of local markets and increased market capacity have served to improve the internal restructuring of consumption. From January to October, Shenzhen's retail volume of social consumer goods has increased by 15% as compared with the same period of last year. It is expected that the retail volume of social consumer goods will double in the next five years. We are dedicated to fostering a favorable business environment for the growth of Shenzhen's business enterprises.
Currently, bearing in mind the general plan of the Ministry of Commerce and the strategic requirement for building Shenzhen into an international city, we are now actively carrying out the planning of business operation. The key of the our plan is to develop several business centers famous in and out of China, restructure business operation, improve community commerce featuring modern chain stores and develop modernized shopping malls with sound planning. We will develop urban commerce characterized by rational distribution, fair competition, balanced aggregates, significant advantages and perfected functions.
Distinguished guests, ladies and gentlemen, Shenzhen never swerves in opening up to the outside world. We warmly welcome retailers from home and abroad to our city to seek further development. The retail business and sourcing sector in Shenzhen enjoy great potential. We are working hard to build Shenzhen into Southern China's commercial center, sourcing center as well as a city known for its conference and exhibition business. This roundtable meeting will surely promote the healthy development of Shenzhen's commerce and trade as well as the retail business. We look forward to advice and opinions from our distinguished guests so that we may make further progress in Shenzhen's retail industry. I believe this roundtable meeting will surely bear rich fruit. I wish you a healthy and happy stay in Shenzhen. I wish the Procurement Fair a complete success.
(Full text of the remarks by Sheng Bin, Director-General of Shenzhen Bureau of Trade and Industry at the Roundtable Summit of the "3rd China Consumer Goods Procurement Fair" on November 8, 2004)