The new-age out­look in old Hu­nan

In­dus­tries and cities in the cen­tral China prov­ince con­nect around the world

China Daily (Hong Kong) - - BUSINESS - By JOSEPH CATANZARO, TRA­CIE BAR­RETT and GAO AN­MING in Chang­sha

fac­tory floor in Chang­sha re­ver­ber­ates with the thun­der­ous rum­ble of mys­te­ri­ous ma­chin­ery, re­lent­less ro­botic arms turn­ing out enough build­ing ma­te­rial ev­ery 72 hours to make an en­tire sky­scraper. Some­where in Rus­sia, and in parts of Africa and South Amer­ica, the pieces of pre­fab­ri­cated con­crete wall the fac­tory spits out will be­come of­fices and homes.

In a cav­ernous workshop in Zhuzhou, tech­ni­cians swarm over the cara­paces of new elec­tric trains, as­sem­bling and out­fit­ting rigs that will ride the rails across China and other lands.

On the floor of a ware­house in Xiang­tan, gi­ant wind tur­bines wait. Al­ready the en­gines of a greener China, from next year, they will claw at French skies and power their homes.

In a pro­cess­ing plant in Changde, men and women in white coats over­see a river of rice prod­ucts that will feed peo­ple in Europe and South­East Asia.

And on the docks in Yueyang, men with weath­ered faces load ships that will take goods down the Yangtze River to Shang­hai and across the sea.

Th­ese five cities, linked to each other and in­creas­ingly con­nected to all cor­ners of the globe, are lo­cated in one Chi­nese prov­ince. This is Hu­nan, where pieces of your world are made ev­ery day.

Rich in an­cient and mod­ern his­tory, Hu­nan is home to a group of prom­i­nent fig­ures who went on to change and shape China, Mao Ze­dong fore­most among them. But while cit­i­zens, lead­ers and in­dus­try king­pins are proud of their re­gion’s past, all eyes are now on Hu­nan’s fu­ture.

Change and in­no­va­tion are tak­ing shape be­hind the of­ten-closed doors of the re­gion’s big busi­nesses, pre­sent­ing op­por­tu­nity and com­pe­ti­tion alike for the rest of China and the world.

Lo­cated in China’s sub- trop­i­cal mon­soon zone along the mid­dle reaches of the Yangtze River, boast­ing a pop­u­la­tion of about 72 mil­lion, Hu­nan has one of the most dy­namic economies in the cen­tral and western re­gions. Last year, its GDP of more than 2.2 tril­lion yuan ($362 bil­lion) and av­er­age growth rate of 13.3 per­cent placed it in China’s top 10 per­form­ing prov­inces for the fifth con­sec­u­tive year.

Xie Jian­hui, di­rec­tor- gen­eral of the Hu­nan Com­merce Depart­ment, says be­tween Jan­uary and Septem­ber this year, the prov­ince’s GDP reached 1.69 tril­lion yuan, a year- on- year growth of 10.2 per­cent.

But China, and the world, is chang­ing. While Hu­nan is an eco­nomic pow­er­house, lo­cal of­fi­cials re­al­ize they have to change with the times, or face be­ing left be­hind. Xie says as a re­sult of this for­ward-look­ing men­tal­ity, Hu­nan is in­creas­ing be­com­ing a global trader with bi­lat­eral in­vest­ment links to a range of coun­tries.

Dur­ing the first three quar­ters of this year, Hu­nan’s to­tal vol­ume of im­port and ex­port reached $17.17 bil­lion, she says. “With a year-onyear growth of 18.4 per­cent, the growth rate (in im­port and ex­port) ranks first in cen­tral China.”

Europe is fast be­com­ing a key lo­ca­tion for Hu­nan’s out­bound in­vest­ment, Xie says. Eighty-one en­ter­prises in the prov­ince have in­vested a to­tal of $733 mil­lion in the EU.

But the lion’s share of the prov­ince’s to­tal for­eign in­vest­ment still goes to Asia.

“We have 529 en­ter­prises that have in­vested in the Asian re­gion, ac­count­ing for more than 60 per­cent of all the en­ter­prises in Hu­nan that have in­vested over­seas,” she says. “The to­tal con­tracted in­vest­ment has now reached $4.02 bil­lion. The ma­jor coun­tries and re­gions that our en­ter­prises have in­vested in are Hong Kong, Laos, Viet­nam, and Thai­land.

Con­versely, for­eign in­vest­ment in Hu­nan is also be­ing en­cour­aged by the pro­vin­cial gov­ern­ment’s move to cut red tape.

“There are 131 en­ter­prises of the For­tune 500 en­ter­prises in Hu­nan,” Xie says. “From Jan­uary to Septem­ber, the uti­liza­tion of for­eign cap­i­tal reached $6.5 bil­lion, with year-onyear growth of 19.1 per­cent. We have un­der­taken 2,518 in­dus­trial trans­fer projects, among which 309 are in­ter­na­tional projects.”

Be­tween Jan­uary and Septem­ber this year, Xie says 351 Asian in­vest­ment-backed projects went ahead in Hu­nan, rep­re­sent­ing al­most 86 per­cent of all for­eign in­vest­ment.

Chen Zhaox­iong, vice-gov­er­nor of Hu­nan, says the cur­rent eco­nomic con­di­tion of the prov­ince “pro­vides a solid foun­da­tion for fu­ture de­vel­op­ment”.

Much of the suc­cess is at­trib­uted to a plan that was set in mo­tion about six years ago. At the end of 2007, the State Coun­cil ap­proved a blue­print to de­velop three Hu­nan cities — Chang­sha, Zhuzhou and Xiang­tan — into a pi­lot zone for build­ing a re­source-sav­ing and en­vi­ron­men­tally friendly so­ci­ety.

The plan, called the “two- ori­ented so­ci­ety”, was later ex­panded to in­clude another five cities — Changde, Yiyang, Yueyang, Loudi and Hengyang — all within an hourand-a-half drive of Chang­sha, Zhuzhou or Xiang­tan.

The in­ter­con­nec­tiv­ity of the cities, and their abil­ity to share re­sources and re­duce re­dun­dan­cies, has been the lynch­pin of a se­ries of changes and re­forms in the prov­ince that have en­abled the mar­ket to be­gin to drive ahead and in­no­vate. More than 80 in­dus­trial zones and parks with vary­ing in­cen­tives and fa­vor­able tax­a­tion con­di­tions have fur­ther stim­u­lated growth.

On the floor of a fac­tory in Chang­sha, the founder and CEO of Hu­nan Far­soon High-Tech Co proudly shows off a fu­tur­is­tic-look­ing ma­chine that epit­o­mizes the kind of in­no­va­tion Chen is keen to see more of.

Es­tab­lished in 2009 by Dr Xu Xiaoshu, Far­soon is now China’s big­gest and the world’s third-largest man­u­fac­turer of se­lec­tive laser sin­ter­ing equip­ment, the tech­nol­ogy driv­ing the 3D print­ing in­dus­try that many have her­alded as the dawn of a new in­dus­trial rev­o­lu­tion.

“Our com­pany does not make prod­ucts; our com­pany makes the ma­chines and the ma­te­ri­als,” Xu says.

He says busi­ness is boom­ing and Far­soon is ex­pand­ing to keep pace. “We move to a new fa­cil­ity next year and will be able to make 40 at a time.”

The com­pany’s own for­mula of SLS Ny­lon pow­der, which its ma­chines can turn into any­thing from mov­ing car parts to pro­to­types for pros­thet­ics, has been ex­ported to over­seas mar­kets in­clud­ing the US, Swe­den and Italy since last year.

Next year, the ma­chines will be avail­able for sale over­seas, too. At present the roar­ing de­mand in China cou­pled with lim­ited pro­duc­tion ca­pac­ity means each of Far­soon’s ma­chines are sold for more than 1 mil­lion yuan.

With the US push­ing hard to main­tain an edge on what is tipped to be a tech­nol­ogy ca­pa­ble of rev­o­lu­tion­iz­ing the man­u­fac­tur­ing and med­i­cal pros­thet­ics in­dus­tries, Xu says his work is vi­tal to China.

“Metal, ceram­ics, all of th­ese ma­te­ri­als are in re­search (for use in 3D print­ing) right now,” he says. “We have al­ready made some metal parts. If we want to keep man­u­fac­tur­ing jobs in China, we need to im­prove tech­nol­ogy. This tech­nol­ogy will re­place tra­di­tional in­dus­try in the long run. In the­ory, you can use it to make a car or a plane. But at the mo­ment it’s too ex­pen­sive. We in­vest a lot in re­search and de­vel­op­ment.”

Down the road at Broad Homes, CEO Fen Tang says its au­to­mated lines are pump­ing out pre-fab­ri­cated walls that are fast be­com­ing the build­ing blocks of a greener China and a cleaner world.

“We are a link be­tween tra­di­tional and new sec­tors,” she says, tout­ing the en­vi­ron­men­tal cre­den­tials of the com­pany’s prod­uct.

The con­struc­tion in­dus­try ac­counts for one-third of all waste gen­er­ated in Chi­nese cities, Broad Homes says. In com­par­i­son with tra­di­tional


Top: Work­ers weigh rice in a rice pro­cess­ing plant in Changde. Above: Rice prod­ucts of Jin­jian Ce­re­als Co on dis­play at a trade fair in Hu­nan.

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