Capital gains

Location and climate

Beijing is in the northeast of China, largely surrounded by Hebei province. To the southeast lies the municipality of Tianjin, China's third biggest city. Beijing has a continental climate ? winters are cold and very dry, summers hot and humid with heavy rains. A large proportion of the city's domestic heating is generated from coal and coke resulting in high levels of air pollution.

Natural resources

Gold is mined within the municipality and in the past few years production has been more than 4,000 ounces annually.

Industry

The municipality is one of the major manufacturing centres in China. Its industries include: iron and steel, petrochemicals (The Yanshan Petrochemicals Corporation is the largest complex of its kind in China), building materials, machinery, textiles, glass, household goods and foodstuffs.

Energy shortages (demand outstrips supply in Beijing as elsewhere in China), are a recurring problem, but four new power sub-stations (each 110kV) and seven transmission lines were recently completed bringing transforming capacity to 293,500 kV. Eight more sub-stations are under construction.

Tourism is another important industry with the Ming Tombs and part of the Great Wall lying within the municipality. Beijing, together with Tianjin, Hebei, Shanxi and the middle part of Inner Mongolia, forms the north China economic zone planned to
specialise in the production of coal and oil, electronics, chemicals and textiles.

Trade

Beijing plays an important role in China's trade. Total exports in 1990 was US$1.3bn with Hong Kong absorbing US$300m making it Beijing's largest partner. Principal exports are textiles, arts and crafts, animal by-products, mineral foodstuffs, machinery and instruments.

Communications

Beijing is the centre of the national railway and civil aviation networks. It was the first city in China to install a metro system (Balfour Beatty of the UK has recently won a contract on the modernisation of the system). The eastern section of Beijing's ring roads project (13.4km) was completed in September 1989. The city is linked to the port city of Tianjin by the first of China's super-highways.

Projects

There are plans to improve Beijing's metro system. The 40km lines and the Circular Loop line. The Circular Loop was completed in 1988 and the two lines linked up. Under construction is a 1 km section to connect the busy Xidan shopping area with Fuxingmen, and a 12km section from Fuxingmen to Banwangfen. In the long term (by the middle of the next century) there are plans to extend the metro to a total of seven lines with one to serve the northern suburbs, and another to connect the city centre with

rospects

Plans are for Beijing and Tianjin to develop in a complimentary manner with Beijing taking the lead in cultural, economic and political matters while Tianjin will concentrate on trade, commerce and investment. The priority areas in the Beijing Municipality are: the modernisation of food processing, electronics and household electrical appliances, advanced building materials, textiles and special steels.

Foreign investment

There are now 1,700 foreign-funded enterprises in Beijing, 70-80 per cent of which are industrial. Beijing has been a pioneer in the use of foreign investment particularly for jv hotels. The Peking Lotteries Industries, the first wholly owned Taiwanese-funded business in Beijing, is the only mainland Chinese business producing lottery tickets.

Beijing has a large number of businesses financed by Taiwan, Hong Kong and Macao. Foreign companies setting up export orientated or high technology industries are to be allowed to lease land in Haidan District, to the northwest of the city and Tangxian in the east. The Beijing Association of Enterprises with Foreign Investment (which has 235 members) was set up to help with problems faced by JVs. The Beijing Foreign Investment Centre has been appointed as the department in charge of foreign-funded enterprises.