Province Introduction of China: Hunan

Published: 01 Apr 2009 19:57:15 PST

Key Information 
 















































  
 
 
Introduction
Hunan Province is located in the middle reaches of the Yangtze River, with Dongting Lake situated to the north. This location has greatly benefited the water transportation system in the province. Additionally, it is situated in the development belt in the middle of and adjacent to Guangdong Province, making it easy for container trucks to reach Hong Kong within a day. Hunan has rich mineral reserves. Its reserves of tungsten, antimony, zinc and bauxite are among the top in China. Other major deposits of minerals include lead, tin, barite and graphite mineral. Because of this, it has often been called “the country of non-ferrous metals” and “the country of non-metal minerals”. 

Agriculture
Due to Hunan’s fertile soil, the output of major farm and sideline products occupies a leading position in China. In 2006, Hunan had the highest output of rice (reaching 23.2 million tons) and the second highest output of ramie in China. The output of rapeseed, cured tobacco and fresh water fish was also among the five highest in the country.   
 
Economic Overview
In 2006, Hunan’s overall GDP grew by 16.2% from the previous year. The growth of the agricultural, industry and service sectors stood at 6.1%, 21.4% and 16% respectively year on year. Figure 11.4.1 shows the GDP breakdown by sector.
  

 
In the same year, fixed asset investments increased by 26.4% from the year before. Investments were primarily made in the real estate and manufacturing sectors. Figure 11.4.2 shows the fixed asset investments by sector. 

  




 

Due to rises in income and economic reforms, the consumer expenditure pattern is also undergoing structural changes. The share of expenditure on food has declined while the expenditures on services, especially transport and communications and housing, have increased.   
  
 







Industry
Metallurgy, equipment manufacturing and tobacco manufacturing are the three pillar industries of Hunan. Table 11.4.1 shows the number of enterprises, gross industrial output value and industrial value-add of these industries.







  

 
After many years of development, metallurgy has become the pillar industry of Hunan. The industry has an optimized industrial structure and is strongly competitive in China. Presently, the fine and deep processing products with high value-add, and high technology are the focus of this industry. Major companies include Valin Steel Group Corp, Lengshuijiang Steel Group Corp and Hunan Nonferrous Metals Holding Group Corp.
In recent years, Hunan also focused on several categories of products in the equipment manufacturing industry. Primarily, they are engineering machinery (the province has the second largest engineering machinery base in China), electrical appliances, automobiles, and rail transportation equipment. Sany Group Corp, Tebian Electric Apparatus Stock Company, Chang Feng Group Corp and CSR Zhuzhou Electric Locomotive Works are the top players in these fields. The overall strength of Hunan’s tobacco industry ranks second in the nation and its brand competitiveness ranks first. In 2006, the industrial output of the tobacco industry reached 3.0 million TEUs. Famous brands in this industry are Baisha and Furongwang.   

Services
There are several important service industries in Hunan – finance and insurance being the two key ones. By the end of 2006, the deposit balance of the financial institutions amounted to RMB 779.95 billion and the loan balance stood at RMB 523.36 billion. The profits of the financial institutions reached RMB 7.82 billion in 2006, up 271% over last year. The stock market also experienced stable growth, with 47 listed companies having a total financing of RMB 9.63 billion (5 times higher than that of 2005). The annual revenue of the insurance industry was RMB 14.8 billion in the same year, up 16.2% over 2005. 
 
Foreign Trade and Foreign Investment
In 2006, the total imports and exports grew by 35.9% over 2005. The major export products were rolled steel, textiles, manganese, clothing and fireworks, and major import products were iron ore, rolled steel, machine tool, paper pulp and liquid pumps. Table 11.4.2 shows the province’s major trading partners and the total value and weight of each partner’s imports and exports. The major import sources are Japan, Australia, Germany, the U.S., and South Korea while key export destinations include Hong Kong, the U.S., Japan, South Korea and the Netherlands.  










 
By the end of 2006, 40 of the world’s top 500 enterprises had invested in Hunan. Pepsi, NEC, Hutchison Whampoa, Mitsubishi and Time Warner were amongst them. Figure 11.4.3 shows the major FDI sources. As illustrated, Hong Kong is the largest investor in Hunan, making up half of Hunan’s FDI sources. While it has always been Hunan’s largest investor, its investment has further accelerated since the CEPA implementation in 2004. Other noteworthy FDI sources are Taiwan, the U.S. and the Virgin Islands.   
  

 
In terms of sectors, the industry sector has received the highest amount of FDI. It makes up 61.0% of the overall FDI received, while agriculture accounts for only 2.8% of the overall FDI. The service sector has also received a fairly substantial amount of FDI, making up 36.2% of the overall amount. This is illustrated in Figure 11.4.4. 
  

















   
 
Major Development Zones
Hunan has two major development zones – Changsha Economic and Technological Development Zone and Changsha National High-Tech Industrial Development Zone. The areas and pillar industries of these zones are reflected in Table 11.4.3.  





  

 
Changsha Economic&Technological Development Zone is located in Changsha. With an average annual growth of 40%, the zone’s industrial production value, and import and export values account for one-third and half of those of Changsha City respectively.  
 
Its overall investment environment ranks second amongst all the national development zones in Central and West China. Two highways pass through the zone and the nearest train station and airport are just 8 km away. Changsha also has a river port with an annual throughput of 40,000 TEUs.  
 
Changsha High-Tech Industrial Development Zone is located in Changsha and is divided into 4 parks. There are more than 400 enterprises invested in this zone. It is 28 km away from the airport, 10 km from the train station and 10 km from the river port.   
  
Education
Hunan has 96 universities and colleges with 831,000 students, including 38,700 graduates. Key universities in the province include Hunan University and Central South University.   
 
Major Cities in Hunan Province
There are a total of 14 cities in Hunan province. Changsha, its capital, has the highest GDP and largest FDI, standing at RMB 179.90 billion and US$1202.82 million respectively. Other cities in the province are not as economically advanced and lag far behind with GDPs of less than 50% and FDIs of less than 10% of Changsha’s. Table 11.4.4 shows the cities and their GDPs, land area, population and FDIs.

















  
  
Changsha



















 
Introduction
Changsha, the capital of Hunan Province, is located in the northeast of Hunan. Five major railways pass through the city. It also has a convenient water transportation system.  
 
Investment Climate
The engineering machinery, automobile, house appliance, new material, IT and pharmaceutical industries are Changsha’s pillar industries. In 2006, the gross industrial output value reached RMB 127.2 billion and the output value of engineering machinery reached RMB 15.4 billion, accounting for 10% of the nation’s total engineering machinery output. Famous companies in the city include Sany Group Corp and Chang Feng Group Corp.  
 
Foreign Investment
Changsha is one of the major FDI destinations in Hunan. In 2006, the number of newly approved foreign invested projects reached 206 and the investment volume was US$1.8 billion. By the end of the same year, the city had established friendly ties with 13 other cities overseas. Major companies investing in Changsha include LG, Coca Cola, Pepsi, Philips, Bosch and Asahi Glass. 
 
Important Travel Information
Time taken to travel from Changsha Huanghua International Airport to:  
- Beijing
- Shanghai
- Guangzhou
- Shenzhen
- Chengdu
- Xi’an
- Dalian
- Hong Kong  2 hour 5 mins
1 hour 20 mins
55 mins
1 hour 5 mins
1 hour 30 mins
1 hour 30 mins
3 hours 30 mins
1 hour 20 mins