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The Yangtze River Delta (YRD) encompasses the municipality of Shanghai and the provinces of Zhejiang and Jiangsu on China's east coast. With only 10 percent of China's population, the YRD region accounts for a quarter of China's GDP, nearly half of its foreign direct investment (FDI), and more than a third of its foreign trade .
The YRD is rapidly becoming an integral part of the global value chain of most major multinational corporations. High-tech parts are imported from Japan, Taiwan, and South Korea, while raw materials and commodities are imported from Australia, Southeast Asia, and South America . These imports feed into YRD-based assembly and processing functions across almost all industrial sectors. Foreign-invested enterprises (FIEs) assemble consumer electronics, microprocessors, automobiles, and other products requiring large amounts of skilled and semi-skilled labor . Domestic Chinese firms, concentrated in the dynamic private sector of Zhejiang, create light-industrial goods, such as textiles, and supply components to foreign manufacturers. Finished goods are exported to the United States, the European Union, Japan, and, increasingly, Southeast Asian and other emerging markets.
The YRD is rapidly expanding up the value chain with new, advanced production facilities capturing market share from some imported high-tech products from Japan, South Korea, and Taiwan. The YRD is, however, feeling the strains of rapid growth--averaging more than 10 percent each year for the past three years and coping with transport bottlenecks, land scarcity, power shortages, and, increasingly, fierce competition for talent .
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