Province Introduction of China: Anhui

Key Information
























Introduction
Anhui province is situated in the northwest of East China across the basins of the Yangtze River and the Huaihe River. The province has rich mineral resources and the deposits of iron, copper, pyrite, limestone and alunite are among the top five in the nation.    The province has rich mineral resources and the deposits of iron, copper, pyrite, limestone and alunite are among the top five in the nation.
 
Economic Overview
In 2006, Anhui’s overall GDP grew by 14.4% over 2005. The growth of agriculture, industry and service stood at 6.4%, 19.2% and 13.0% respectively, year on year. Figure 11.1.1 shows the breakdown of Anhui’s GDP by sector. The industry and service sectors contribute approximately 40% to Anhui’s GDP, with the remaining 16.7% of GDP coming from the agricultural sector.  
 
In 2006, Anhui’s retail sales of consumer goods ranked 14th in terms of sales volume in China. Major consumer markets in the Anhui province are located in Hefei, Anqing and Wuhu. The first three quarters of 2007 saw the growth of Anhui’s consumer market reach 16.9%, a record peak since 1997.  
 
The sales of construction materials, automobiles, entertainment products and electronic publications grew the fastest among all the consumer products, with growths of 46.5%, 44.0%, 25.6% and 25.1% respectively. 
 
Figure 11.1.2 shows the fixed asset investments by sector. Manufacturing and real estate are the industries with the largest amount of fixed asset investments, contributing nearly 30% each to Anhui’s overall fixed asset investments.    
Other industries with noteworthy amounts of fixed asset investments are logistics, energy supply and public service.















Agriculture
Benefiting from the mild climate, Anhui is rich in agricultural resources and products, and possesses 40,907 sq km of farmland. In 2006, the grain output in Anhui reached 26.1 million tons, ranking it the 5th in China. Many of Anhui’s agricultural products are also famous. These include grapes, pears, pomegranates, tea and crabs. The growth of per capita annual net income of rural households was ranked 4th in 2006.    Anhui’s industry sector has several pillar industries - equipment manufacturing, metallurgy, coal exploration and chemicals.  
 
Industry
Anhui’s industry sector has several pillar industries - equipment manufacturing, metallurgy, coal exploration and chemicals. In the first three quarters of 2007, the growth of designated size industries reached 22.6%, speeding up by 4.3% year on year, 4.1% higher than the national average. Despite the rapid growth, the GDP of Anhui’s industry and industrial share in the total GDP was ranked 5th among the six provinces of Central China in 2006. Table 11.1.2 shows the number of enterprises, industrial output and value-add of industrial outputs of the pillar industries. 
 
Anhui’s equipment manufacturing industry focuses on the manufacturing of engineering machinery, electric appliances and automobiles, with Wuhu city being one of the major air conditioner production bases in China. The industry is highly concentrated in terms of the industrial group of products and has strongly competitive brands. However, there is a low level of creativity and high energy consumption in the industry. Examples of famous manufacturing firms in Anhui are: Anhui HELI Corp (the nation’s top company for forklift manufacturing), Meiling Corp (the top enterprise in the nation’s refrigeration industry), and Chery Auto (one of the major enterprises in the nation’s automobile industry that was ranked 7th place in 2007 in terms of sales).    The output of refined copper products from Maanshan, Wuhu and Tongling accounts for one-third of the nation’s total. 
 
The metallurgy industry in Anhui focuses on steel and copper. The output of refined copper products from Maanshan, Wuhu and Tongling accounts for one-third of the nation’s total. Key enterprises in this industry are Masteel Group Corp and Tongling Nonferrous Metals Group Corp, the country’s 7th largest steel producer and the world’s 8th copper refiner respectively. By the first half of 2007, the revenue of Masteel had already exceeded RMB 20 billion. The coal reserve of Anhui ranks 7th place in China. In 2006, coal output reached 82 million tons and ranked 10th in the country. In the 11th 5-Year Plan, the province defined the coal chemical industry as the key industry to develop. As such, two coal chemical bases in Fuyang and Chaohu will be set up, involving an investment of RMB 220 billion. Upcoming coal chemical projects in Huainan, Huaibei and Fuyang will also enable Anhui to become the largest coal chemical base in East China.  

Services
In Anhui province, finance, insurance and real estate are the key service industries. By the end of 2006, the deposit balance of the financial institutions reached RMB 710.0 billion and the loan balance reached RMB 513.2 billion. The insurance industry also did well, with a gross premium of RMB 16.5 billion in 2006. Out of this, 25% are premiums for non-life insurance and 75% are for life insurance.
The real estate industry saw a gross investment of RMB 63.7 billion in 2006, 38.7% higher than the previous year. There were 2,194 enterprises in this industry with a revenue of RMB 36.6 billion.  

Foreign Trade and Foreign Investment











In 2006, total imports and exports of Anhui reached US$12.2 billion, the highest among all the six provinces in Central China. Major exports included mechanical&electrical products, spinning and fabric and related products, and land vehicles. Major imports were metal ore and metal waste material, and special industrial machinery. Table 11.1.3 shows the major trading partners of the province in 2006. Chile, Japan, Australia, Germany and Brazil are among the major import sources, while the U.S. Japan, South Korea, Hong Kong, and Russia are the key export destinations.   
 
Anhui province receives a large amount of FDI from Hong Kong, with more than half of the total FDI coming from there. Other major sources of FDI are the U.S., Taiwan, Singapore and Japan. See Figure 11.1.3. 
 
In terms of the sectors receiving FDI, manufacturing is the key recipient with 56.9% of FDI being channeled into this industry. Energy supply, real estate, mining and accommodation are other noteworthy recipients of FDI in Anhui. 










Major Development Zones
Hefei has three major development zones – Hefei Economic and Technological Development Zone, Wuhu Economic and Technological Development Zone, and Hefei High-Tech Industrial Development Zone. The area and pillar industries of these zones are presented in Table 11.1.4.
 
Hefei Economic&Technological Development Zone is the second largest of the three development zones in Anhui province, in terms of land area. The pillar industries of this zone are the automobile, engineering equipment, electric appliance, daily chemical and food processing industries. In 2006, its total industrial output reached RMB 43.6 billion, up 27.5% over 2005, accounting for 40% of Hefei’s total industrial output. Besides the strong industrial output, the zone also upholds its quality standards and passed the ISO9001 and ISO14001 authentications in 2005.  
 
Wuhu Economic&Technological Development Zone is located in Wuhu City, one of China’s communication hubs. It has the largest land area among all the major development zones in Anhui province, and in 2006, its GDP, total industrial output value, fixed asset investment and total imports and exports reached RMB 13.4 billion, RMB 51.0 million, RMB 4.2 million and US$704.6 million respectively. The pillar industries of this zone are the new construction material, automobile and parts, electronic and electronic appliance, biological engineering and IT industries.Hefei High-Tech Industrial Development Zone ranks 16th among all the national high-tech development zones. It has more than 200 high-tech enterprises, accounting for 35% of the province’s total. Pillar industries in this zone mainly deal with IT, integration of photo-mechanical-electronics, biological engineering, and new medicine.
 
Education
Anhui has 83 universities and colleges with 663,700 students, including 25,069 postgraduates. There are 959 research institutes. In 2006, the R&D cost reached RMB 16.1 billion, accounting for 2.6% of the province’s total GDP. The University of Science and Technology of China, located in Hefei, is established by the Chinese Academy of Sciences (CAS), and is one of the best universities specializing in science and engineering. Another key university in the province is Hefei University of Technology.  

Major Cities in Anhui
There are a total of 17 cities in the Anhui province. Of these, Hefei had the highest economic growth in 2006, with a GDP of RMB 107.4 billion and utilized FDI of US$375.7 million. Table 11.1.1 shows the cities and their GDP, land area, population and utilized FDI. 







Hefei 

Introduction
Hefei, the capital of Anhui, is the center of its economy, politics and culture. It has a history of over 2,000 years and is named “City of Science and Education” and “City of Garden” for its top universities and good environment.
Investment Climate
Hefei has eight pillar industries - automobiles, equipment manufacturing, electric appliances, chemicals, new materials, IT and software, biological technology and medicine, and food processing. Jianghuai Auto, HELI Forklift, Meiling Air Conditioner and Royalstar are among the city’s well-known brands. Hefei was ranked as China’s 12th largest business process outsourcing (BPO) base in December 2007. According to Hefei’s 11th Five-Year Plan, the business value of BPO in Hefei is slated to reach RMB 10 billion by 2010. Some Fortune 500 companies, such as IBM, GE, Motorola and Mitsubishi, have already shifted part of their BPO into Hefei.  

Foreign Investment
Anhui has established the eastward development strategy to strengthen its cooperation with the Yangtze River Delta. It has become the industry transfer base for the coastal provinces, especially in the textile industry. As the most developed city in Anhui, Hefei has attracted the most investment. In 2006, utilized FDI rose by 115.3% from the year before and in 2007, 121 new foreign-funded enterprises were set up in Hefei with an investment of US$1.7 billion.
 
Important Travel Information

Time taken to travel from Hefei Luogang International Airport to:  
- Beijing  1 hour 35 mins
- Shanghai 1 hour
- Guangzhou 1 hour 45 mins
- Chengdu 2 hours 15 mins
- Xi'an  1 hour 5 mins
- Hong Kong  2 hours