City Introduction of Shandong, China: Heze

Major Economic Indicators (2007)

Source: Heze Economic and Social Development Report 2007

Introduction

Heze, a prefecture-level city in the southwestern part of Shandong Province, is at the intersection of Shandong, Henan, Jiangsu and Anhui Provinces. It is adjacent to Jining in Shandong Province to the east, Anhui Province and Jiangsu Province to the south, Henan Province to the west and Liaocheng in Shandong Province to the north. Heze has a temperate continental climate, with cold winters and hot summers. The average temperature is about 12-13 C.

The city is an important railway transportation hub in China. The Beijing-Kowloon Railway and the New Asia-Europe Land Bridge meet in the city. State Highway 105, State Highway 106, State Highway 220 and State Highway 327 run through the city. Jinan Airport, Zhengzhou Airport and Jiaxiang Airport are situated 220 km, 230 km and 75 km from Heze, respectively.

Heze has rich coal, oil and natural gas resources. Heze is a large coal and oil base in north China and has proven reserves of 56.3 million tons of oil and 27.3 billion cubic meters of natural gas. Heze’s Juye Coal Field, has 28.1 billion tons of coal reserves. Heze also has abundant wood resources.

Economic Features

Heze is the third smallest economy in Shandong Province by GDP in 2007. In 2007, the city’s GDP grew 17.1% year on year to RMB 66 billion, comprising 2.5% of Shandong’s GDP and ranking fifteenth among the cities in Shandong Province.

The city is a traditional agricultural base in Shandong Province. The value-added output from the agricultural sector rose 3.0% year on year to RMB 18.2 billion, contributing 27.6% to the city’s economy. The city produced 4.9 million tons of crops in 2007, making up nearly 12% of Shandong Province’s total crop output.

Secondary industry, as the largest contributor to the city’s economy, made up 47.8% of the city’s GDP in 2007, with value-added output of RMB 31.6 billion. Electricity production and supply, equipment manufacturing, raw chemicals and chemical products, petrochemicals, agricultural products processing, coal mining and supply, textiles, and wooden products manufacturing are the major industries in Heze.

The major players in the city’s industrial sector include Shandong Dongming Petrochemicals Group, Shandong Yuhuang Chemicals, Shandong Hongye Chemicals Group, Shandong Caopu Handcrafts and Shandong Yinxiang Weiye Group.

Shandong Dongming Petrochemicals Group, set up in 1987, is a private company specializing in petrochemicals manufacturing, pesticides and herbicides, refined chemicals and construction materials. It has an annual production capacity of 6 million tons of chemicals and petrochemicals. In 2007, its sales revenue amounted to RMB 3.8 billion.

The service sector experienced fast growth in 2007. The value-added output from the service sector grew 22.9% year on year to RMB 16.2 billion in 2007, constituting 24.6% of the city’s GDP.

The city’s foreign trade value soared 30.6% year on year to US$850 million in 2007, comprising less than 1% of Shandong’s total. Exports gained 29.3% year on year to reach US$720 million. The city’s major export products are agricultural products, which comprise 36.6% of the city’s total export value. The E.U. is the largest export destination of Heze. The export value to the E.U. rose 36% year on year to US$181 million, accounting for 25% of the city’s total.

In 2007, a total of 34 foreign-funded projects were approved, with total contractual foreign investments falling 20.2% year on year to US$184 million. The utilized FDI in the city hit US$103.8 million in 2007, a sharp rise of 46.5% year on year. Investments from large multinational companies are still absent in this city.