1. System Advantages:

Zhejiang took the lead in the market-oriented economic reform. A socialist market economic system fundamentally established in the province: the ownership structure with the public sector remaining dominant and diverse forms of the economy developing side by side is constantly improved and perfected, an open market system with orderly competition has been basically set up, a new distribution framework has taken shape, and multi-level social security system has primarily been established. Thus, the province has gained first-mover advantage in the market-oriented reform.

The private economy of our province is where the economy's vigor, advantage and potential lie. In 2005, the GDP of Zhejiang Province reached RMB 1,336.5 billion, up by 12.4% when calculated at comparable prices. The initial estimation showed that among the total GDP in Zhejiang, the state-owned economy was RMB 380.9 billion, accounting for 28.5% and going down by 1.2% compared with the previous year, while the non-public economy reached RMB 955.6 billion, accounting for 71.5% and going up by 1.2 % compared with the previous year. In the non-public sector, the individual and private economy reached RMB 761.8 billion, accounting for 57% and going up by 1% compared with the previous year.

2. Location Advantages

On the southern wing of the Yangtze River Delta, Zhejiang boasts unique geographical advantages for "bordering rivers and seas, bridging the east and the west, and linking the south with the north". The advantages lie mainly in four aspects:

Firstly, the Yangtze River Delta is becoming the most vigorous and promising area in China's economy. Zhejiang, as part of the Yangtze River Delta, is no doubt to enjoy enormous opportunities. With the continual acceleration of the construction of international economy, trade, finance and shipping centers in Shanghai, its huge convergence and radiation capacities are supposed to directly push the Yangtze River Delta area toward sustainable and sound development. 

Secondly, within the Yangtze River Delta, Zhejiang owns resources and advantages different from those in Jiangsu in its economic linkage with the central city, Shanghai. The development of Jiangsu is principally "along the River and roads, while Zhejiang faces the sea and enjoys  ocean advantages, which is of great benefit for Zhejiang to develop the ocean economy, a global-market-oriented economy, port industry and logistics, etc. 

Thirdly, a number of geographical factors that used to encumber Zhejiang from being connected with Shanghai and integrated into the Yangtze River Delta are being removed, and new location advantages are turning into significant strengths in the process of economic integration with the Yangtze River Delta. For instance, the construction of the Bay Bridge will greatly shorten the economic distance between Zhejiang and Shanghai.

Fourthly, the process of economic integration in the Yangtze River Delta is also the process of emergence of city clusters in the Yangtze River Delta with Shanghai as the center. In the urbanization process, industrialization and informatization would inevitably follow. According to international common practice, manufacturing industry will enjoy a prosperous development between the central city and node cities in a city cluster. This provides new opportunities for Zhejiang to construct an advanced manufacturing base, thanks to its location on the southern wing of the Yangtze River Delta and to its mid and final period of industrialization.