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Henan offers peek into whole nation
By Xin Zhiming ( China Daily )
Updated: 2011-01-27

If there is one province in China that could demographically represent the world's most populous country, it might be Henan.

Henan offers peek into whole nation

Guo Gengmao is governor of Henan province.

With more than 100 million people, the most among all the provincial-level regions, the Central China province is, like the country as a whole, facing challenges such as fast growth and low per capita income.

But Henan plans to increase its opening-up and further sharpen its competitive edges - such as a low cost of production - to catch up with other regions in the world's second largest economy, said Guo Gengmao, governor of the province.

It will, meanwhile, continue to focus on building its grain production capacity so it can contribute to the nation's grain stockpiles, Guo said.

"The year 2010 saw us attract the most foreign capital and sign the most cooperative contracts (in our history)," he said.

Henan is estimated to have attracted $6 billion in foreign direct investment in 2010, up 25 percent year-on-year, according to Guo.

Its economic performance was sound, with its GDP registering a year-on-year growth of 12 percent to reach 2.2 trillion yuan ($333 billion), among the top five in the country. But its per capita GDP ranks as one of the lowest.

"We must accelerate our development in the 12th Five-Year Plan (2011-2015) to catch up with other provincial regions (in terms of per capita measurements)," he said.

One of its plans for faster growth is to take advantage of its low labor and land costs, rich resources as well as convenient transportation to attract more outside investors, including those from abroad.

The province benefits from rich resources such as coal and nonferrous metals, and it has the longest high-speed road system in the country.

As a sign of Henan's rising attractiveness amid rising production costs in coastal factory belts, electronics maker Foxconn International Holdings, a subsidiary of Taiwan's Hon Hai Precision Industry Co, agreed in June of 2010 to build a new plant in the province, which will eventually employ 300,000 people.

"To secure the Foxconn deal, we have managed to get a comprehensive bonded zone, the first in the central regions, approved within 100 days," Guo said.

He said the province is also improving the local aviation networks and customs facilities and even considering setting up a foreign exchange settlement center to cater to potential demand from foreign investors.

Guo said he is optimistic about the foreign investment prospects given the large market of the province. "It's our biggest advantage."

While developing its overall economy, the province will continue to improve its grain production capacity to help the country feed its 1.3 billion people.

Its grain output accounts for one-tenth of the national total. Its wheat output makes up one-fourth of the nation's overall wheat production.

"Agriculture doesn't have a comparative advantage in terms of increasing GDP, but we must think for the whole nation, not Henan itself," Guo said.

 
 
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