HUNAN PROVINCE

 

General Background

Hunan - abbreviated as Xiang - is situated at south of the middle reaches of the Yangtze River.  It is laced with lakes, including the Dongting Lake which is the second largest fresh water lake in China.  The province lies on the Dongting Basin which is surrounded by mountains.

 

Changsha is the capital of Hunan.  Changsha and Yueyang are approved by the State Council as inland open cities, enjoying the same preferential policies as in the coastal open cities.

Blessed with a subtropical temperate climate and abundant rainfall and sunshine, Hunan is the fifth largest producer of grain in China. In particular, Hunan is the largest producer of tea, and the third largest producer of oranges. Among its well-known native products are day lily and lotus seeds0. Other popular native products include pig of Niangxiang, buffalos of Binhu, cattle and sheep of West Hunan, geese of Wugang, duck of Lingwu and Sanhuang Hen of Liuyang. Hunan is one of South Chinaˇs main timber bases.

 

Hunan has rich reserves of minerals. Its reserve of bismuth, rubidium, bone coal, fluorite, sepiolite, barite and monazite are the largest in the country. Reserves of manganese, vitriol, rhenium, mirabilite, arsenic and kaolin the second, and that of zinc, aluminum, tin, tantalum, graphite, diamond and cement materials the third.

The production volume of lead, zinc, hard alloy, salt fluorite and ramie textile products of Hunan Province are the first in the country, of tungsten, electric aluminum, electric zinc, mercury and pottery the second.

 

Infrastructure

 

Water Transport ⌒The water transport network of Hunan centres around the Dongting Lake, with the Xiang, Zi , Yuan and Feng Rivers serving as major arteries. Annual handling capacity of the network is over one million tons. The Changlinji wharf in Yueyang city on the bank of the Dongting Lake is the largest export shipping port of Hunan, and can berth a 5000 tons cargo ship.

 

Railways ⌒ Major railways include the Beijing-Guangzhou line, Zhicheng-Liuzhou, Zhejiang-Jiangxi, Hunan-Guizhou and Hunan-Guangxi lines, linking the province to all directions in the country. The construction of the Shashi-Yueyang line is underway.

In the Tenth Five-Year Plan, the Hunan government is going to invest heavily in the construction of railways and highways. The construction of the Shashi-Yueyang line is underway. Another major railway that links Chongqing and Hunan,  the Chongqing-Huaihua lineˇs construction had begun recently. The Hunan section of the Datong-Zhanjiang line is also under construction.

Highways ⌒ Major highways include Changsha-Zhuzhou-Xiangtan, Yueyang-Guangzhou and Changsha-Zhangjiajie lines. Recently, the construction of the Xiang-Zi-Gui Highway, which links Hunan and Guangxi,  has been completed.

In the Tenth Five-Year Plan, Hunan is going to construct the following highways: the Xiang-Lai Line, Lai-Yi Line and Lin-Chang Line, which are main parts of the Beijing-Zhuhai Expressway, the Tan-Shao Line, the Changsha Metro Superhighway , the Hengzao Line, and the Changde-Zhangjiajie Line.

Air Transport ⌒ Hunan's international airport, Huanghua Airport, in Changsha operates regular services to major domestic and international cities including Hong Kong and Bangkok.  Other domestic airports are located at Changde, Hengyang, Lingling and Zhangjiajie.

Telecommunications ⌒ Telecommunications capacities in Hunan has increased substantially in recent years.  Mobile phone services are available in major cities.  Till end-April 2001, there were over 2.18 million subscribers for mobile phone and 830,000 internet users.

 

Industries

In 2000, Hunan's industrial output totalled Rmb170.4 billion (+15.9%).  Industries are mainly located at Changsha, Yueyang, Hengyang, Changde and Zhuzhou.

Metallurgy, machinery and electronics, food, chemicals, textiles, energy and building materials are the pillar industries in Hunan.  Hunan's production of ferro-alloys and household ceramics are the highest in the country.  Other major products include machine tools, automobiles, motorcycles, electric motors, cement, chemical fertilizer, chemical fiber, pesticides and garments.

The machinery-building industry has developed rapidly and can now produce more than 3,000 kinds of products includ­ing electric locomotives, tractors, heavy machine tools and high-precision electronic equipment.

 

Tourism

 

        Hunan contains rich historical heritages and tourism resources.  Historical sites include: Emperor Yanˇs Tomb in Yanling County; Emperor Shunˇs Tomb in Ningyuan County; Memorial Temple of Qu Yuan in Miluo County; Chuangwang Mausoleum, built for farmer leader Li Zicheng at late Ming Dynasty. Yueyang Tower, one of the three historical monuments in South China; Yuelu Academy, one of the top four academies in the Song Dynasty (960-1279A.D.); Aiwan Pavilion, one of top four pavilions in China; tomb of Mawangdui and bamboo slips of the Eastern Han (25-220A.D.). Natural scenic spots include: Mt. Hengshan, one of the top five scenic mountains in China; Doingting Lake, one of top four freshwater lakes; Wulingyuan in Zhangjiajie City had been included in the Almanac of World Historical Cultural Relics. Edited by World Historical Cultural Relics Committee of UNESCO in 1992. Xiangxiˇs traditional customs enjoy high reputation. Besides, there are 88 revolutionary bases in Hunan Province, including the former home of Mao Zedong, which are under protection of the provincial government with some 30 museums.

In 2000, over 454,000 tourists (+17.7%) visited the province and generated revenue of US$221 million (+19.5%).

 

Consumer Market

Retail sales of consumer goods in Hunan rose by 11.2% to Rmb136.5 billion in 2000.  Among which, Changsha and Yueyang are the largest consumer centers.

Major department stores and shopping centres in Hunan include Hunan Changsha Friendship Group, Hunan Commercial Group, Changsha Department Store and Hengyang Department Store.

 

Foreign Trade

Hunan's exports increased by 14.6% to US$1.6 billion in 2000.  Major export goods included garment, textiles, silk, rice, pottery, tea, live pigs, iron alloy and steel products.  Manufactured goods accounted for some 85% of Hunan's total exports.  Major export markets were Hong Kong, the US, Japan, Germany and Republic of Korea.

Imports also rose by 61.9% to US$136 million in 2000.  Major import goods included aquatic products, non-ferrous metals, steel, electronic equipment, chemical raw materials, tobacco, paper and chemical fertilizers.  Major import sources were Hong Kong, the US, Germany, Japan and Australia.

Hong Kong is the largest trading partner of Hunan.  In 1999, Hunan's exports to Hong Kong totalled US$191 million.  In terms of imports, Hunan imported US$18.3 million worth of goods from Hong Kong.

 

Foreign Investment

 

In 2000, Hunan approved 320 (+0.0%) foreign-invested projects with contracted foreign investment of US$665 million (+32.5%).  Actual utilised amount was US$678.3 million (+3.8%) in the year.

Hong Kong was the biggest investor in Hunan. In 1999, Hong Kong signed 171 investment agreements with contractual amount of US$314 million. Hunan also utilized US$310 million of Hong Kong investments. Other major investors were the US, Taiwan and the UK. Changsha, Hengyang and Zhuzhou are popular to attract foreign investment. 

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 current 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
Cities	('000)	(Rmb bn)	(Rmb bn)	(Rmb bn)
Changsha	5,825   (+1.0%)	58.8   (+8.3%)	29.4     (+6.9%)	19.4   (-14.5%)
Yueyang	5,193   (+0.8%)	33.1   (+8.2%)	23.3     (+11.0%)	11.6   (+8.4%)
Changde	5,965   (+0.3%)	31.9   (+4.9%)	13.0     (+8.3%)	10.6   (+7.1%)
Hengyang	7,021   (+0.6%)	32.6   (+8.7%)	10.9     (+1.9%)	11.0   (+7.8%)
Zhuzhou	3,701   (+0.6%)	28.1   (+6.8%)	18.3     (-1.6%)	10.1   (+7.4%)

Note: Figures in  (   ) represent year-on-year growth             Source: Statistical Yearbook of Hunan

 

 

Major Economic & Technological Development Zone (ETDZs)

1.      Hunan Changsha Economic and Technological Development Zone ( Special Investment zone)

This special zone is located in the town area of Changsha county, contiguous to the eastern suburbs of Changsha city.The special zone encourages investment in and development of industry, high and new technologies and service trades. Emphasis is laid on foreign investment in such new industries as microelectronics, new materials, bioengineering, information and communication, new sources of energy, etc. Also welcome is the development of tract of land in the zone by foreign investors along with their own investment projects. Income tax for enterprises in the Special Investment Zone will be levied at the rate of 15%.  The zone levies no charges except reasonable consolidated fees on enterprises in the zone.

2.      Changsha New and High Tech Industries Development Zone

This is a national-level development zone authorized by the State Council. The planned area of the zone is 18.6km^2, including 4km^2 for Yuelu Shan Science-based Industrial Park which is situated on the west band of the Xiang River and by the National Highway No.319.
The zone, with complete infrastructural facilities, rich intellectual resources, powerful technical forces and all the necessary service institutions, holds great attraction for both foreign and domestic investors. Water and power supply, sewage disposal, telecommunications service, and road transportation are all available in the zone and the land has been prepared for ready use. The zone is divided into the industrial district, the multi-functional district, the residential district, etc.

3.      Yueyang Economic and Technological Development Zone

This is a key development zone of Hunan Province. The zone, conveniently located at the junction of the golden waterway the Yangtze River, the 107th National Highway, the Dongting Lake and the Beijing-Guangzhou Railway, is linked to Beijing, Guangzhou, Shanghai, Xi'an and other major cities in China by air, water, rail and road.
The planned area of the zone is 30 km^2 including two sub-zones, Bajiaohu and baishiling. In the zone there are organizations for foreign related services such as the customs, commodity inspection, quarantine and foreign exchange. The zone is assured of water and power supply, because in Yueyang there are two thermal power plants with a total capacity of 700,000kw and water plants which can supply 1.265 million tons of water daily. And a new water plant with a daily production of 400,000 tons is being constructed in the zone. Besides, a telecommunications centre has been set up.

4.      Zhuzhou New and High Tech Industries Development Zone

This is another state-approved national-level development zone in Hunan province. It is located in the city of Zhuzhou, a hub of communications and an important industrial base in southern China. It covers an area of 10 km^2, A 1.78km^2 science-based industrial park has been established recently in the zone, where the infrastructure is good, water and power supply sufficient and IDD and DDD telephone, fax and express mail services available. Now a number of standard factory buildings, the Pioneers' Centre, the Science, Technology and Trade Centre the experts' apartment houses and a living area have already been built.  The zone encourages development of aviation and space technologies, fine chemicals and other hi-tech products.

Other major Economic development zones include:

1.        Xiangtan High and New Technology Industries Development Zone

2.        South Hunan Pilot zone for Reform and Opening Transition

3.        Huaihua Mountainous Area Open and Development Pilot Zone

 

Economic Indicators

 

 

	1999		2000
Economic Indicators	Value	Growth	Value	Growth
		(%, y-o-y)		(%, y-o-y)
Area (sq km)	212,000	--	212,000	--
Population (mn)	65.3	0.5	64.4 ^	-1.4
Gross Domestic Product (RMB bn)	332.7	6.1*	368.9	9.0*
Per Capita GDP (RMB)	5,227	5.5	N/A	N/A
Disposable Income Per Capita
- urban (RMB)	5,815.4	7.0	6,218.7	6.9
- rural (RMB)	2,127.5	3.0	2,197.2	3.3
Fixed-assets investment (RMB bn)	54.1	14.1	63.4	17.2
Added value Output
- primary industry (RMB bn)	77.1	-7.3	78.1	1.3
- secondary industry (RMB bn)	140.6	8.9	146.3	4.1
- tertiary industry (RMB bn)	122.9	12.9	144.4	17.5
Retail Sales (RMB bn)	122.9	9.2	136.5	11.1
Inflation (Consumer Price Index, %)	-2.4		1.4
Exports (US$ bn)	1.4	5.3	1.6	14.2
- by FIEs (US$ bn)	0.1	18.2	0.2	100
Imports (US$ bn)	0.8	20.0	1.4	61.9
- by FIEs (US$ bn)	0.2	0	0.3	50
Foreign Direct Investment
- number of projects	320	-23.1	320	0.0
- contracted amount (US$ bn)	0.5	-54.2	0.7	32.5
- utilised amount (US$ bn)	0.7	-20.1	0.7	3.8

Notes: * In Renminbi real term

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

Sources: Statistical Yearbook of Hunan and State Statistical Bureau

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