Province Introduction of China: Hubei

Key Information













































 
  
 
 
 
Introduction
Hubei lies in central China, spanning two major river systems - the Yangtze River and its largest tributary, Hanjiang River. The world’s largest hydropower station, the Three Gorges Hydroelectric Power Station, is situated in this province. Hubei derived its name (which means “north of lake”) from its location as it is situated to the north of Dongting Lake. About 10% of the province consists of lakes, lending it the nickname “province of a thousand lakes”.
 
Hubei adjoins Henan to the north, Anhui to the east, Jiangxi to the southeast, Hunan to the south, Chongqing Municipality to the west and Shaanxi to the northwest. The province is a central zone in China as it connects the south with the north and the east with the west. Wuhan is the capital of this province.
 
Hubei is very rich in history. It was once the capital for the Chu Kingdom during the Warring States Period (475-221BC). It also played an important strategic role in the Three Kingdoms Period (AD190-280). As one of the key places where ethnic Chinese originated, about 60.5 million people live in this province today. They include many minority ethnic groups such as the Miao, Tujia, Dong, Hui and Mongolians.  
 
Due to its geographic location, it enjoys favorable environmental conditions and diversified natural resources suitable for the plantation of different crops. It is a main production base for grain, cotton and oil crops, and as such, Hubei has long been known as “the land of rice and fish” in China.
 
Together with some cities in Hunan, the Wuhan City ring, covering 100 kilometers around Wuhan, won the State Development and Reform Commission’s approval to become the trial zone for the state’s construction of a resource conservation and environmentally friendly society on Dec 14, 2007. The circuit area, covering nearly one third of the territorial area and more than half of the population in Hubei, will serve as the strategic base for the resurgence of the central region in China, which indicates the central government’s determination to boost the development of this area.   
 
Economic Overview
Hubei witnessed rapid economic development since the opening up of the Yangtze Economic Belt and the construction of the Three Gorges Dam project. The soaring investment, consumption and exports have pushed the regional economy to grow at an average growth rate of over 10.5% during the 2000 to 2006 period. In 2006, its GDP reached RMB758.1 billion, up 13.2% over the previous year. Figure 11.3.1 shows the GDP breakdown by sectors. Industry and service lead Hubei’s economy, contributing more than 40%. Agriculture also remains a moderately significant contributor to the economy with 15.0% of the GDP.   
  

 
In 2006, Hubei’s total investment in fixed assets rose 24.92% year-on-year to RMB334.4 billion. As a manufacturing hub in central China, Hubei injected RMB89.6 billion into its manufacturing sector, up 20.3% from 2005. Other substantial investments in fixed assets were made in the following industries as well: real estate (RMB 69.2 billion), logistics (RMB 44.3 billion) and wholesale and retail (RMB 9.0 billion). Figure 11.3.2 shows the breakdown of fixed assets in 2006 by the respective sectors.   















  

   
 
Agriculture
Hubei’s Jianghan Plain is one of the main agriculture and aquaculture production bases in China. Grain, cotton and oil-bearing crops, in particular, flourish in this area. Hubei produced about 22.1 million tons of grains and 449,000 tons of cotton, up 1.5% and 19.6% respectively in 2006. Cultivated land in the province totaled 4.95 million hectares, accounting for 3.81% of the total cultivated land in China. 

Industry
Hubei has developed into an important industrial production base in central China with major industries including automobiles, steel, textiles, food&beverage, electronics, shipbuilding, and chemical raw materials and
 
Automobile
Hubei is one of the major automobile production centers in China. In 2006, the output of automobiles rose by 36.3% year-on-year to 541,700 units. This figure includes 240,500 sedans and 192,100 trucks, up 69.8% and 0.7% year-on-year respectively, accounting for 7.4% of the country’s total automobile output. The concentration of the automobile industry in Hubei has also resulted in the rapid growth of the auto accessories industry. There are a total of 431 auto parts manufacturers located in this province, and sales revenue of this industry has risen 25.2% to RMB27 billion.
 
Dongfeng Motor Corporation, which was launched in 1969, is one of the Big Three Auto Groups in China. Its subsidiaries in Hubei include Dongfeng Peugeot Citroen Automobile, a joint venture with the French car maker, Peugeot, and Dongfeng Honda Automobile Co. Ltd, a joint venture with the Japanese car giant, Honda. 
 
Steel&Iron
Since the launch of China’s first iron plant (Hanyang Iron Plant) in Wuhan in 1891, Hubei has developed into a comprehensive iron and steel production base in China. In 2006, Hubei produced 16.58 million tons of crude steel, 15.79 million tons of pig iron and 16.9 million tons of steel products, accounting for 4%, 3.9% and 3.6% of the nation’s total respectively. A key player in this industry is Wuhan Iron and Steel Group. It has an annual production capacity of 20 million tons, and is ranked the third largest iron and steel consortium in China after nearly 50 years of development. By the end of 2006, its steel output amounted to 177 million tons.
 
Steel products, totaling US$790 million in 2006, is a key export of Hubei, accounting for 11% of the province’s total export value within the same year. The exports of Wuhan Steel&Iron Group and Hubei Xinyegang Co. Ltd, the two major players in the province, contributed 59.6% and 10.9% to Hubei’s total export value respectively. 
 
Services
Hubei’s service sector is developing rapidly and steadily. In recent years, it has kept up a two-digit growth rate and in 2006, the sector realized an added-value output of RMB299.3 billion, up 11% from the previous year. Retail and tourism are the key industries that have aided the sector’s growth the most.  
 
In the same year, retail sales of consumer goods in Hubei expanded 15.1% to RMB341.2 billion. The total sales revenue of retail enterprises (with above designated size) increased 17.5% year-on-year to RMB47.4 billion. Many overseas retail enterprises such as the New World Development Group, Tak Shun Group, Carrefour, Wal-Mart and Metro were also attracted to invest in Hubei. The rich tourism resources in the province have brought RMB 51.4 billion worth of income from 84.6 million domestic tourists and US$320 million worth of revenue from 1.06 million overseas tourists. These revenue figures represent a 14.1% and 15.8% year-on-year increase respectively. 
  
Foreign Investment&Trade
Like other provinces in China, Hubei conducts a great deal of trade with many countries in the world. Main export destinations include the U.S. (US$879.0 million), Hong Kong (US$488.0 million), South Korea (US$474.4 million), Japan (US$389.0 million) and Germany (US$339.5 million). Major import sources are Japan (US$887.5 million), France (US$742.1 million), Germany (566.1 million), Australia (US$425.4 million) and Taiwan (US$336.6 million). Among all the exports, the export of machinery and electrical appliances expanded the most, increasing 78.1% to US$2.43 billion and accounting for 38.8% of the total export value.  
 
Major imports included iron ore (US$906.5 million), auto accessories (US$637.3 million), copper ore (US$453.4 million) and piston engine components (US$188.3 million).In 2006, the utilized FDI in Hubei reached US$2.45 billion, 12.1% higher than in 2005. FDI sources included Hong Kong (US$831.8 million), Japan (US$455.8 million), the Virgin Islands (US$253.3 million), Britain (US$113.5 million) and France (US$112.2 million).  
 
The manufacturing sector accounted for 69.7% of the total actualized FDI in 2006, with a utilized FDI of US$1.71 billion, up 48.7% year-on-year. About 26% of FDI floated to the service sector, with a focus on the hotel, retail, logistics and real estate industries.   

Major Development Zones
Hubei has 3 development zones at the state level, 24 development zones at the provincial level and 38 others at the city level. Figure 11.3.1 shows Hubei’s 3 state-level development zones and their land areas, pillar industries and industrial outputs of 2006.  






  

 
Wuhan East Lake New Technology Development Zone is the smallest state-level development zone in Hubei. However, it has the highest industrial output among all the state-level development zones. Pillar industries in this zone include optoelectronics, IT, energy, environment protection, software and biotechnology.  
 
Wuhan Economic and Technological Development Zone focuses on the automobile, electronic, food and beverage processing, pharmaceutical, and biotechnology industries. It had an industrial output of RMB 57.1 billion in 2006.
 
Xiangfan Hi-Tech Development Zone is the largest state-level development zone in the province. Its pillar industries are the automobile and auto parts industry, high-technology industry and textile industry. Its industrial output in 2006 reached RMB 37.0 billion, accounting for 20.5% of the combined state-level development zones’ industrial output.  

Major Cities in Hubei Province
There are a total of 15 cities in the Hubei province. Wuhan is the provincial capital as well as the province’s most economically advanced city. It has the highest GDP among all the cities (RMB 259.0 billion), which is nearly RMB 200 billion more than that of the city with the next highest GDP. Table 11.3.2 presents the cities’ GDP, land area and population. The table also illustrates the rankings of the cities in Hubei in terms of GDP. 
 

 

















 
Wuhan


















 
Introduction  
Wuhan, the capital city of Hubei, is the most important transportation hub, and industrial and commercial center in Central China. In 2006, its GDP reached RMB 259.0 billion, ranking it 16th in China and 1st in Central China in terms of GDP.  
 
Investment Climate  
Wuhan’s major industries include the IT, automobile, steel, optic-electronics, biology engineering and new material industries. It is an important steel production base and in 2006, it produced 10 million tons of steel products.
The automobile industry in Wuhan is also deserving of attention. In 2006, it produced 268,056 automobiles, accounting for 3.7% of the country’s total. An industrial output of RMB 42.8 billion was generated from the automobile industry in Wuhan, an increase of 62% from the previous year. Major players in this industry include Dongfeng Honda Automobile and Dongfeng Peugeot Citroen Automobile, two units under Dongfeng Motor Corporation.  
 
In recent years, the city has diversified its industries and begun expanding into the hi-tech sector. It has now become the biggest optical-electronic information industry base in China. China Optics Valley, lying in the East Lake Hi-tech Development Zone in Wuhan, is the country’s largest optic telecoms R&D base and the largest laser industry base. Wuhan’s optical fiber and optical fiber cable products hold 50% of the domestic market share and 12% of the global market share.  
 
Knowledge and research complement the commercial vitality of the city. There are 3 state-level development zones as well as 52 institutes of higher education inclusive of the Wuhan University, Huazhong University of Science&Technology, China University of Geosciences (Wuhan) and Wuhan University of Technology. The city is ranked the third or fourth in China (whether Wuhan or Xi’an ranks third is debatable, while there is consensus that Beijing and Shanghai rank first and second respectively) in terms of its comprehensive strength in science and technology.
 
Foreign Trade&Foreign Investment  
Wuhan’s total foreign trade exceeded US$8 billion in 2006, up 29.5% year-on-year, accounting for more than two-thirds of Hubei’s total foreign trade turnover. Exports hit US$3.78 billion, up 48.7% year-on-year, while imports stood at US$4.24 billion, up 16.1% year-on-year.  
 
As a major city in Hubei for attracting foreign investors, Wuhan utilized US$2 billion of foreign investment in 2006, 15% higher than the previous year. Meanwhile, 69 Fortune 500 enterprises have made investments in the city, including Intel, Siemens, Kerrry Group and HSBC.
 
Hong Kong is the largest foreign investment source for Wuhan. By the end of 2006, Wuhan had approved 2,523 Hong Kong funded firms, including New World Development, Luks Industrial and Tak Shun Group, accounting for 51% of the total number of foreign-funded enterprises in the city.  
 
The contractual value amounted to US$4.8 billion, contributing 43% to the total value of foreign investments. France is the second largest foreign investor in Wuhan. France’s investment in Wuhan accounts for nearly one third of its total investment in the Chinese mainland and much of it is floating into the automobile industries.  
 
Famous French firms investing in Wuhan include PSA Peugeot-Citroen, Renault, Carrefour, Societe Generale and the Total-Elf Group. As a result of heavy French investment, Wuhan is considering launching a “French Industrial Park”.  
 
Important Travel Information  
Time taken to travel from Wuhan to the following destinations:
- Bangkok
- Beijing
-Chengdu
- Chongqing
- Dalian
- Guangzhou
- Haikou
- Hangzhou
- Hong Kong
- Qingdao
- Shanghai
- Seoul
- Shenzhen
- Xian  3 hours
2 hours
1 hour 25 min
1hour 35 min
1 hour 40 min
1 hour 35 min
1 hour 50 min
1 hour 5 min
1 hour 50 min
1 hour 35 min
1 hour 20 min
3 hours 10 min
1 hour 40 min
1 hour 15 min