HENAN PROVINCE

General Background

 

Henan - abbreviated as Yu - is situated in the central plain of China in the middle reaches of the Yellow River. Situating between the Yellow River Valley and the Yangtze River Valley, Henan is the place where the Chinese Civilization was established. Ruins and remains of the Shang Dynasty, dated around 2000 B.C., are located in Henan.

Henan possesses rich water and hydraulic resources and there are four rivers passing through the province : the Yellow River, Hanshui River, Huaihe and Weihe.  Besides, the province has a temperate climate with heavy rainfall in summer.

The provincial capital is Zhengzhou.  Other major cities include Kaifeng, Luoyang, Xinxiang and Nanyang.

Henan is rich in natural resources.  With mild weather and fertile land, the province becomes the major grain producer in China.  Its grain output ranked second in 1999, after Shandong.  Major agricultural products include wheat, beans, ramie, oil and cotton.

Henan is an important production base of cotton in China and a national cotton market has been established in Zhengzhou.  In 1999, its cotton output reached 707,000 tons and ranked second in the country. 

Henan's reserve of molybdenum, marble trona, asbestos, aluminum, natural gas, cesium, bauxite, coal, perlite and refractory clay are among the largest in China.  In 1999, the province's coal output reached 80 million tons and ranked the third in China, after Shanxi and Shandong.  Besides, the Zhongyuan oilfieldm is one of the largest oilfields in the country.  Currently, half of aluminum oxide output in China comes from Henan. 

 

Infrastructure

 

Water Transport ⌒ River transportation is available with easy access to the Yellow River, Huaihe, Weihe and Hanshui River.

To enhance water transport, Henan had invested RMB 50 million to improve transportation along the Huaihe River. Upon its completion by 2004, the provinceˇs western region will become an important inland water transport center.

Railways ⌒ Zhengzhou is one of the most important railway transportation hubs in China, even in Asia.  The Beijing-Guangzhou line, the Jiaozuo-Zhicheng line and the Beijing-Kowloon railways cross the province from north to south.  Other railways include the Lanzhou-Lianyungang, the Jiaozuo-Xinxiang-Heze and the Mengmiao-Baofeng-Luohe-Fuyang lines run through Henan from west to east.  The Euro-Asia Land Bridge also passes through the cities from Lianyungang in Jiangsu to Rotterdam in the Netherlands.

Highways ⌒ Major highways in Henan include the Kaifeng-Luoyang Expressway, the Zhengzhou-Luoyang Expressway, the Anyang-Xinxiang Expressway, the Xuchang-Luohe Expressway and the Luoyang-Sanmenxia Expressway.

Construction of the Sanmenxia-Lingbao Expressway is in progress.  The section is part of China's longest expressway linking Lianyungang, Jiangsu, in the east with Horgos in Xinjiang to the northwest.  The expressway will link Henan with neighboring Shaanxi Province to the northwest area as well.

Air Transport ⌒ Henan has airports in Zhengzhou, Luoyang and Nanyang and international flight services are available at Zhengzhou.  Chartered flights to Hong Kong and Macau are also available. 

Telecommunications ⌒ Telecommunications services have made remarkable progress.  In the first quarter of 2001, there were 1.73 million subscribers for mobile phone services, ranked the sixth in the country.  Recently, Henan had opened a new broadband IP network thatˇs among the biggest in China.

Electricity ⌒ With rich coal resources, Henan acts as a centre for thermal power generation in China.  In 1999, the installed generating capacity in Henan reached 14.8 million kWh, ranking the sixth in the country.  Power stations are constructed at major cities in Zhengzhou, Kaifeng, Luoyang, Pingdingshan, Anyang, Hebi, Xinxiang, Jiaozuo and Sanmenxia.  

 

Industries

In 2000, Henan's industrial output totalled Rmb349.5 billion (+12.6%).  Pillar industries in the province include food processing, coal, metallurgy, machinery, chemicals, petroleum refining, building materials, textiles and electronics.  Industries are mainly located at Zhengzhou, Nanyang, Luoyang, Jiaozuo and Xinxiang.

The  output of ham sausage, gourmet powder, glass shell of color TV tube, large size tractors, heavy tyre, grinding wheel, bearing, alumina, type fabrics, machine-made paper and paper board are high in the country.  A group of brand products such as Xinfei electrical appliance, Lotus Flower gourmet powder, Chundu ham sausage and Shuanghui ham sausage are famous at home and abroad.

The province plans to capitalise on its advantages to further improve its agriculture and processing of farm products, raw materials production and energy industries.

 

Tourism

As the birthplace of the Han people, Henan has many historical relics and scenic spots. There are three ancient capital cities in the province: Luoyang, Kaifeng and Anyang, all of which have many sites of great historical value. Famous tourist sites include the ruins of the Shang Dynasty in Zhengzhou, the Longmen Grottoes in Luoyang, the ruins of the Yin and Shang Dynasties in Anyang, the Shaolin Temple in Dengfeng and the White Horse Temple in Luoyang.  In 2000, over 325,000 (+8.3%) tourists visited the province and generated revenue of US$124 million (+8.8%).

To further develop its tourism, the Henan government plans to invest RMB 60 million to 80 million per year in the triangular area of Zhengzhou, Luoyang and Kaifeng, which contained most of the famous historical sites of the province.

 

Consumer Market

In 2000, retail sales of consumer goods in Henan rose by 10.6% to Rmb178.7 billion.  Major consumer markets are located in Zhengzhou, Nanyang and Luoyang.

Zhengzhou has long served as a major distribution center in central China.  It was approved by the State to be the pilot trade centre for reforms.  Besides, 102 wholesale markets including the agricultural wholesale market and building materials wholesale market were built.

Not that long ago, sino-US Henan McDonald's Food Co. Ltd., cooperation between the US fast food giant and the Zhengzhou Friendship Commercial Group Corp., has been set up in Zhengzhou.  In the coming three years, McDonald's will open ten outlets in Henan.

Major commercial centres include Zhengzhou Commercial Mansion, Zhengzhou Asia Supermarket, Zhengzhou Hualian Commercial Mansion, Zhengzhou Tianran Commercial Mansion, Zhengzhou City Department Store, Zhengzhou Central Trade Warehouse and Zhongyuan Transaction Center.

 

Foreign Trade

In 2000, Henan's exports rose by 33.3% amounting to US$1.6 million.  Major export goods included agricultural products and processed agricultural products, textiles, ceramics, machinery, metals and coal. 

Hong Kong was Henanˇs 2nd biggest export market. In 1999, Henan exports to Hong Kong was US$178 million. Other major export markets were the US, Japan, the EU, Russia and Republic of Korea.

Imports rose sharply by 25% to US$1.5 billion in 2000.  Major import goods were electronic parts, chemicals, salt, copper, etc.  Major import sources were the US, Australia, Hong Kong, Japan and the Holland.

 

Foreign Investment

In 2000, Henan approved 237 (-9.2%) foreign-invested projects with contractual foreign capital of more than US$699 (+16.7%) million.  It actually used more than US$560 million (+8.2%) of foreign capital in the year.  

Hong Kong was the biggest source of investment for Henan. In 1999, Hong Kong investors signed 73 contracts with contractual amount of US$258 million. Henan also utilized US$305 million of Hong Kong capital. Other major investors were the US, Taiwan, Malaysia, etc.

Investments were mainly engaged in the sectors of agriculture, electronics, petrochemical, machinery, building materials and infrastructure.  A number of well-known multinational enterprises such as Mitsui, Sumitomo and C Itoh & Co. Ltd. from Japan, General Electric and the International Telephone & Telegraph (ITT) from the US, Renault from France have also invested in the province. 

Henan's cities such as Zhengzhou, Luoyang, Xinxiang, Nanyang, Xinyang and Shangqiu are popular for foreign investment.  Luoyang is a well-known tourism city in Henan.  So far, the city has approved 532 overseas-funded projects with contractual foreign investment of about US$2 billion.  Those projects mainly engaged in energy, telecommunications, machine building, agriculture and real estate.

In coming years, Henan will continue its efforts in the reform of its transportation, telecommunications and energy industrial system to provide a better investment environment for overseas investors with simplified procedures, high efficiency, good service, and preferential policies. 

To boost the development of the central and western regions in China, the State Council has granted further tax incentives to foreign-invested enterprises (FIEs) in China.  Under the existing policy, FIEs are entitled to a three-year tax reduction and exemption.  The new policy allows foreign-invested enterprises in the central and western regions to enjoy another three years of preferential tax rate when the existing preferential term expires.  The tax rate can be further reduced to 10% if an enterprise is proved to export more than 70% of its annual output in terms of value.

 

Economic Indicators of Major Cities (1999)

 

 

 

 

Population

GDP

Industrial Output

Retail Sales

Actual utilized

Cities

('000)

(Rmb bn)

(Rmb bn)

(Rmb bn)

FDI (US$mn)

Zhengzhou

6,320       (+1.4%)

64.0    (+3.2%)

88.7    (+1.1%)

31.2    (+9.1%)

201.1    (-15.5%)

Nanyang       

10,450     (+0.3%)

48.5    (+4.1%)

61.4    (+5.5%)

16.7    (+13.6%)

14.5      (-79.0%)

Luoyang       

6,140       (+0.7%)

37.7    (+3.3%)

55.4    (+3.9%)

16.5    (+13.0%)

2.01      (-89.1%)

Xinxiang       

5,330       (+0.8%)

26.3    (+2.7%)

30.8    (-6.1%)

9.6      (+5.5%)

47.7      (+12.5%)

Jiaozuo          

3,250       (+1.5%)

21.2    (-15.5%)

31.7    (-30.3%)

6.9      (+7.8%)

14.5      (-76.2%)

Kaifeng         

4,640       (+0.7%)

19.9    (+5.3%)

21.3    (+2.4%)

7.6      (+8.6%)

1.7        (-51.4%)

Note: Figures in  (   ) represent year-on-year growth                       Source: Statistical Yearbook of Henan,2000

 

Major Economic & Technological Development Zones (ETDZs)

There are two state-level economic and development zones in Henan :

1.    Zhengzhou New and Hi-Tech Development Zone

Approved by the State Council in March 1991, the zone targets to develop technology and products of new materials, electronic information and biological engineering.  Priority is given to hi-tech industries such as science of electronics and electronic information, the science of materials and the technology of new materials, medical science and biomedical engineering.  Besides, the zone also concentrates in developing electronics and the technology of electronic display, computers and computer softwares, super-hard composite of artificial diamond and bioengineering.

2.    Luoyang New and Hi-Tech Development Zone

Approved by the State Council in 1992, is the centre of scientific research in Luoyang.  The zone aims to form a scientific research and production system with the scientific institutions and the new hi-tech enterprises as the backbone and new material industry, the integrated photo-electricity and electro-mechanics, electronic information, bioengineering as the supporting pillars.

Other development zones in Henan are located in Hebi, Luohe, Kaifeng, Puyang, Nanyang, Xinxiang, Pingkingshan and Zhumadian.

 

Economic Indicators

 

 

 

 

1999

2000

Economic Indicators

Value

Growth

Value

Growth

 

 

 

 

(%, y-o-y)

 

 

(%, y-o-y)

Area (sq km)

167,000

--

167,000

--

Population (mn)

93.9

0.8

92.6^

-1.4

Gross Domestic Product (RMB bn)

457.6

5.6 *

512.6*

9.4 *

Per Capita GDP (RMB)

4,899

4.8

N/A

N/A

Disposable Income Per Capita

 

 

 

 

 

 

 

 

  - urban (RMB)

4,532.4

7.4

4,766.3

5.2

  - rural (RMB)

1,948.4

4.5

1,985.8

1.9

Fixed-assets Investment (RMB bn)

77.4

4.4

88.5

14.3

Added Value Output

 

 

 

 

 

 

 

 

  - primary industry (RMB bn)

112.4

5.0

116.0

3.2

  - secondary industry (RMB bn)

209.0

4.0

240.1

15.3

  - tertiary industry (RMB bn)

136.7

8.7

155.6

13.8

Retail Sales (RMB bn)

161.6

8.0

178.7

10.6

Inflation (Consumer  Price Index, %)

-3.8

 

 

-0.8

 

 

Exports (US$ bn)

1.2

-7.5

1.6

33.3

  - by FIEs (US$ bn)

0.2

-4.0

0.3

50

Imports (US$ bn)

1.2

50.6

1.5

25

  - by FIEs (US$ bn)

0.2

0

0.3

50

Direct Foreign Investment

 

 

 

 

 

 

 

 

  - number of projects

261

-23.5

237

-9.2

  - contracted amount (US$ bn)

0.6

22.0

0.7

16.7

  - utilized amount (US$ bn)

0.5

-15.4

0.6

8.2

Note:  * In Renminbi real terms                 

 ^ Latest population census, 1999 figure was estimate based on previous survey.

Sources:     China Statistical Abstract, CEIC database

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