Hunan grasps chance to play catch-up in Africa
Hunan province, the birthplace of Mao Zedong, has never been a front runner in China’s economic development, but it may soon find a niche as a hub for trade with Africa thanks to a plan approved last month by the State Council.
With support from Beijing, Hunan would build a hub with six trade and logistics centres as part of a “pioneering zone for in-depth China-Africa economic and trade cooperation”, said Jiang Wei, director of West Asian and North African Affairs at the Ministry of Commerce, at a recent briefing on the plan.
Jiang said the China-Africa Deep Economic and Trade Cooperation Pioneer Zone’s six centres would be built around three themes – innovation, economic and trade cooperation, and industrial chains – with a conference centre or meeting venue.
By 2027, the zone was expected to be “a significant international platform for opening up and cooperation with Africa”, Hunan authorities said.
And by 2035, the province aims to become a “globally competitive economic and trade hub for collaboration with Africa”.
The African trade hub is part of Beijing’s plan to encourage economic growth in landlocked provinces. Compared to coastal powerhouse regions such as Guangdong, Jiangsu and Zhejiang, Hunan has historically had few international trade links. The province ranked seventh in terms of population in 2022, while its gross domestic product ranked ninth in the country.
However, Hunan’s economic and trade cooperation with Africa has grown by 23.1 per cent annually on average over the past three years. The province’s trade volume with the continent reached 55.67 billion yuan (HK$61.02 billion) last year, ranking first in central and western China.
The African trade hub will leverage the infrastructure and policy innovations of the Hunan Pilot Free Trade Zone, established by the State Council in 2020, and benefit from the province’s industrial and geographical advantages to serve as a test site for local cooperation with Africa, according to Hunan’s government.
The province was the first to establish “green lanes” to boost agricultural imports from Africa by easing import-export rules, establishing a currency clearing hub and making trade deals with African producers.
President Xi Jinping proposed the green lanes at the 2021 Forum on China-Africa Cooperation in Senegal, where he also outlined a proposal for the new trade zone.
Observers said Hunan was possibly chosen for the free-trade zone because of its agricultural links to the continent, as well as its complementary industries.
Hunan has hosted the ChinaAfrica Economic and Trade Expo three times, most recently last year, when 120 deals worth US$10.3 billion were signed.
Yun Sun, co-director of the East Asia Programme and director of the China Programme at the Washington-based Stimson Centre, said Hunan had developed a diverse portfolio for cooperation with Africa across agriculture, industry, infrastructure and training.
“Hunan [has been] the centre of hybrid rice research and development for decades. And the province has deliberately pursued agricultural cooperation as a highlight in relations with Africa,” Sun said.
Hybrid rice technology, which was pioneered in Hunan by the agronomist Yuan Longping, has been exported to 20 African countries. The technology has increased yields in countries such as Madagascar and Burundi.
Sun said Hunan’s industrial sector, including heavy machinery, was another potential area for cooperation with Africa.
Across the continent, it is increasingly common to see excavators or wheel loaders made by Sany Heavy Industry, based in Hunan’s provincial capital of Changsha, deployed at construction or mining sites.
Sun said she would not count hi-tech as a special area of focus, “but with China exploring lithium for electric vehicle batteries, you never know”.
Lauren Johnston, an associate professor at the University of Sydney’s China Studies Centre, said there were “a lot of industrial complementarities” between Hunan’s competitive industries and growth industries in Africa.
“Africa, which is endowed with metals and minerals, including critical metals such as cobalt and lithium that power electric vehicle batteries, can learn from Hunan’s industrial prowess in mineral processing and making of electric vehicles,” she said.
“[China’s] focus on Hunan not only takes advantage of Hunan’s heavy industrial and agri-processing strengths, but also offers Hunan itself more chance to integrate with China’s coastal frontier. It is a catch-up chance for Hunan too.”
Johnston said the zone’s overriding goal was to overcome barriers – in standards, communications, transport, currency, language, talent, and e-commerce – to elevate trade between China and Africa, especially in non-raw commodities.
Carlos Lopes, a professor at the Nelson Mandela School of Public Governance at the University of Cape Town in South Africa, said China typically exported highvalue manufactured goods, while African exports to China were mostly raw materials and commodities, which generally had lower value. He said non-tariff barriers and regulatory hurdles might limit African exporters’ access to the Chinese market, constraining the growth of exports from Africa to China.
“That is the reason Hunan’s China-Africa Deep Economic and Trade Cooperation Pioneer Zone has the potential to enhance China-Africa trade by providing a platform for increased trade and investment, while offering streamlined processes, reduced bureaucratic barriers, and enhanced logistical infrastructure to facilitate trade,” Lopes said.