This is the first article in a series of five where we have a closer look at Chinese cities, and what opportunities they hold for importers. Today we cover Shanghai, the showpiece and financial center of Mainland China.
What kind of suppliers can I find in Shanghai?
Unlike most other major Chinese cities, its economy is not based on manufacturing or agriculture but finance, retail, services and real estate. Few suppliers in Shanghai are manufacturers, most are in fact Trading Companies or Representative Offices of Manufacturers in neighboring Zhejiang and Jiangsu Province. Most of them are purchasing from manufacturers, or operate a factory, in the following cities: Hangzhou, Ningbo, Jinhua, Taizhou or Wenzhou in Zhejiang Province or Changzhou, Nantong, Suzhou, Wuxi, Xuzhou, Yangcheng, Yangzhou or Kunshanin Jiangsu Province.
Some suppliers are still manufacturing within Shanghai Municipality, but exclusively in the outer districts such as Pudong, Fengxian, Jiading, Songjiang or Baoshao Disctrict.
Shanghai is a huge city and traveling to suppliers within Shanghai can take hours. That’s quite different from cities in Guangdong province, where you often can find manufacturers within a 15 minutes drive from the airport.
My experience tells me that suppliers based in Shanghai keep a higher standard than their inland counterparts. They are easier to communicate with thanks to their relatively westernized culture and decent English proficiency. Shanghainese suppliers are also more aware of certification and quality requirements in Europe and North America. The fact that quite a few are Trading Companies rather than manufacturers is in general a good thing. Many of them are competitive simply because of their product knowledge and focus on international business. This is in stark contrast to many inland manufacturers who sometimes lack export licenses and speak no other language than Chinese.
What kind of products can I find in Shanghai?
As we have already stated, rather than being a manufacturing center itself, Shanghai is more of a gateway to Zhejiang and Jiangsu, two of China’s most industrialized provinces with a combined population of more than 130 million people. These two provinces have dozens of clusters where you find a multitude of industrial products, agricultural products, vehicles, chemicals and consumer products.
Shanghai offers a very diverse selection of products and you can find suppliers from basically any industry, except for consumer electronics which you better source in Guangdong province.
How do I get to Shanghai?
Flying to Shanghai is easy since it has one of China’s three (truly) international airports, that is Pudong Airport. Shanghai is also a major railway hub and you can take the (cheap) high speed train to manufacturing centers such as Taizhou, Jinhua, Ningbo, Changzhou and Yiwu. You’ll most likely end up doing that if you want to see a bit more than water coolers and product samples.
- Airports: Pudong International Airport.
- Train Stations: Hongqiao Railway Station & Shanghai Railway Station.
How should I prepare a business trip to Shanghai?
The first question you should ask a potential supplier is where their factory is located. Certain industries tend to be concentrated in industrial clusters, within Shanghai or in the neighboring provinces. The transportation network is well developed, but traveling through Shanghai, Zhejiang and Jiangsu provinces are time consuming, so I strongly suggest you:
- Begin your trip with visiting suppliers that are manufacturing within the Shanghai Municipality. Taxis might be hard to come by in the outer districts. Hiring a driver for a few days could also be a good idea.
- Make a traveling plan for inspections in Zhejiang and Jiangsu province. Spend more time in cities that are industrial clusters and avoid suppliers that are located outside of these areas. That way you don’t have to travel for hours between each and every supplier and can visit 2 – 3 factories in one day.
Shipping & Logistics
Shanghai is currently the largest port in the world. Naturally, any supplier based here ship from Shanghai. Suppliers in Zhejiang, Jiangsu and Anhui are also likely to ship from Shanghai, even though Shanghai’s southern neighbor, Ningbo, is becoming increasingly competitive.
Pros of Shanghai
- It’s a gateway to the manufacturing centers in Zhejiang and Jiangsu provinces, which are easily reached by the high speed train.
- Shanghai based suppliers, including provincial companies with representation in Shanghai, tend to be more reliable, speak better English and have a better understanding for North American and European certification and quality requirements.
- It’s easy to get here as there are plenty of international flights.
Cons of Shanghai
- There is a limited number of manufacturers in the city. Expect a few days of traveling in the neighboring provinces if you wish to visit any factories.