Introduction
Ancient Hebei was ruled by a multitude of various dynasties throughout history. Situated in the north of China, it sits at the mouth of the Yellow River at the Bohai Sea and spans a land area of 187,700 square kilometers, completely surrounding the Beijing and Tianjin municipalities. Made up of 11 cities, it houses a population of 69 million. The major ethnic group within the province is the Hans, and the minority ethnic groups are the Manchus, the Hui and the Mongols.

Economic Overview
Due to Hebei’s geographical location and economic strength, the province’s GDP ranked sixth among all the provinces and municipalities in 2006. Hebei’s GDP reached RMB 1,166 billion, representing a growth of 11.3% from the previous year. Meanwhile, its per capita GDP reached RMB 16,894. Figure 8.2.1 shows the breakdown of GDP in sectors. As illustrated in the pie chart, more than half of its GDP comes from the industry sector and approximately a third from the service sector. Agriculture makes up only 13.8% of the GDP.

In 2006, retail sales of consumer products reached RMB 339.7 billion, with a recorded growth of 15%. The annual per capita disposable income of urban households increased by 13.2% and reached RMB 10,304.6 billion. Sales from retail centers in Shijiazhuang, Tangshan, Handan and Cangzhou totaled at RMB 189 billion, accounting for 56% of the province’s overall consumer sales. Table 8.2.1 shows the composition of per capita expenditure of urban households.

In 2006, Hebei’s fixed asset investments grew by 30.9% from the previous year, amounting to RMB 550.1 billion. Table 8.2.2 shows the five industries in Hebei with the highest fixed asset investment. As can be seen, manufacturing leads the way with RMB 210.2 billion. The other four top industries trail behind with fixed asset investment of less than RMB 100 billion.

Agriculture
With a large area of cultivated land, Hebei is a major agricultural base in China. In 2006, the value-added output of the agricultural sector reached RMB 161.0 billion – an increase of 5.6% from the previous year.

Industry
In 2006, Hebei’s industry sector posted the highest growth among all the sectors. The added value output of the sector amounted to RMB 523.2 billion, recording a growth of 21.6%. Within the sector, heavy industry takes on a dominant position in Hebei’s industry sector, accounting for 77.1% of the overall sector. Table 8.2.3 shows Hebei’s leading sectors by industrial value-added output. Smelting and pressing of ferrous metals comprise almost a third of the industrial value-added output.

Rich in resources, Hebei’s iron and steel industry is one of the key industries within the province. In 2006, Hebei was the largest producer of iron and steel in China. Based in Hebei, Tangshan Iron and Steel Group, and the Handan Iron and Steel Group, are amongst the largest enterprises within the national industry. Meanwhile, Shougang Iron and Steel Group closed its plants that were responsible for much pollution in Beijing. It relocated to a new facility in Hebei, built with an annual capacity of 9.7 million tons. In addition to iron and steel, Hebei is also the largest producer of cement among all the other municipalities and provinces.

Boasting a large quantity of mineral reserves, Hebei offers rich energy resources such as coal, natural gas and petroleum. Within the province, the supply of petroleum and natural gases comes mainly from the Jidong, Jizong and Dagang oilfields.

Other leading industries within the industry sector are the pharmaceutical products and electronics industries. Some established pharmaceutical enterprises within the province include North China Pharmaceutical Group and Shijiazhuang Pharmaceutical Group.


Services
In 2006, the added value output of Hebei’s services sector reached RMB 336.1 billion, growing by 18.2% from the previous year.

Due to its strategic location, Hebei serves as a convenient distribution center for regions in the northern parts of China. With the presence of major retail and commercial centers, total retail sales in the cities of Shijiazhuang, Tangshan, Handan and Cangzhou reached RMB 189 billion, accounting for approximately 56% of Hebei’s overall retail sales value. Besides Chinese departmental chains, many foreign supermarkets such as Carrefour and Trust-Mart have also penetrated the growing retail market.

Foreign Trade and Foreign Investment
In 2006, Hebei realized an overall trade value of US$18.5 billion, recording a 15.3% growth from the previous year. Export value grew by 17.5% and reached US$12.8 billion, with the U.S., Australia, Japan, South Korea and Taiwan serving as major export destinations. Primary exports included iron and steel, crude oil, fabrics and food. Meanwhile, imports were valued at US$5.7 billion in 2006, with the major import markets being Australia, Brazil, U.S., Germany and India.

In 2006, Hebei’s utilized FDI amounted to US$2.4 billion, increasing by 4.6% from the previous year. Most of the FDI was channeled into the manufacturing industry, accounting for 88.4% of the total utilized FDI. Table 8.2.4 shows the utilized FDI by sector.
Within its overall foreign investment climate, Hong Kong was Hebei’s largest source of FDI. Cities such as Shijiazhuang, Tangshan, Qinhuangdao and Langfang continued to receive large amount of foreign investments, while a growing number of investments were pouring into Handan and Chengde. Foreign investments that have established their presence within the provinces include Microsoft, GM and Siemens.


Major Development Zones
One of the state level development zones within the province includes the Qinhuangdao Economic and Technological Development Zone. Established in 1984, the development zone comprises of East and West districts, spanning an area of 56.72 sq km. Key industries include metallurgy, machinery, electronics, chemicals, as well as food processing. Also, LG and Fujitsu are two of the major investors within the zone.

Located in the northeast of Shijiazhuang, the Shijiazhuang High-Tech Park was designated as a state-level development zone in 1991. Spanning a development area of about 18 sq km, major industries within the development zone include IT, pharmaceuticals, electronics and new materials.

Baoding High-Tech Park is the other state-level development zone in Hebei. Established in 1992, the development zone spans an area of about 12 sq km, with key industries including IT, electronics, new energy, new materials, as well as biological engineering.

Education
In 2006, Hebei invested RMB 6.9 billion in research and development endeavors, engaging a total of 89,000 engineers and scientific personnel. By the end of the year, the province had 88 universities and colleges with a total enrollment of 863,000 tertiary students.

One of the leading universities within the province is Hebei University. Founded in 1921, the university offers various courses ranging from engineering, economics, law and medicine to management, history and philosophy. Meanwhile, Langfang city has 2 education bases, namely the Oriental Universities Town and the Tsinghua Science and Technology Park.

Major Cities in Hebei Province
There are 11 cities in Hebei. Table 8.2.5 shows the cities’ GDP, land area, population and utilized FDI. From the table, it can be seen that Tangshan and Shijiazhuang are the two cities with the most developed economies in Hebei, boasting GDPs of approximately RMB 100 billion. The other cities in Hebei lag far behind with GDPs of less than RMB 50 billion.

The following subsection presents a brief overview of the capital city of Hebei provinceIntroduction
Located at the south of Hebei province on the North China Plain, Shijiazhuang is the capital city of Hebei. It serves as the political, economic, cultural and technological hub of the Hebei province.

Investment Climate
Shijiazhaung is an important industrial city within Hebei province. Key industries within the economy include textiles, pharmaceuticals, food processing, machinery, as well as chemical-related industries. Shijiazhuang is home to one of the nation’s leading pharmaceutical manufacturing markets. The North China Pharmaceutical Group and Shijiazhuang Pharmaceutical Group located here possess manufacturing facilities that are amongst the largest in China.

Foreign Investment
Shijiazhuang is one of the more popular destinations for foreign investments in the Hebei province. In 2006, Shijiazhuang’s utilized FDI reached US$4.94 billion, recording a growth of 12.4%. Key industries where foreign investments are encouraged include the development and industrialization of its agriculture industry, high-tech industries such as electronic information, bioengineering and new materials, as well as traditional industries including machinery and textile.

Important Travel Information
Time taken to travel from Shijiazhuang International Airport to: