Macro-Economy
The new-age outlook in old Hunan
Last Updated: 2013-12-23 09:25 | China Daily
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Industries and cities in the central China province connect around the world

The 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.

 

Workers weigh rice in a rice processing plant in Changde. Photos by Wang Jing / China Daily

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 South-East 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-on-year growth of 18.4 percent, the growth rate (in import and export) ranks first in central China."

Eu rope 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.

 

Rice products of Jinjian Cereals Co on display at a trade fair in Hunan. Photos by Wang Jing / China Daily

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-on-year 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 hour-and-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 epito mizes 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 construction, the company says its process requires 80 percent less water. The insulation quality of the finished product also generates a 70 percent energy saving over the lifetime of its buildings.

With nine manufacturing bases across China and a new factory being built in South America, Fen says by 2015 the Hunan heavyweights will have a 5 percent market share of the Chinese construction industry and will continue to expand overseas operations in regions such as Russia, Africa and the Middle East.

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