Market Profiles on Chinese Cities and Provinces
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12.2008

HUBEI PROVINCE

Major Economic Indicators

Economic Indicators

2007

Jan - Aug 2008

Value

Growth
(%, y-o-y)

Value

Growth
(%, y-o-y)

Gross Domestic Product (RMB bn)

923.1

14.5 1

497.2 3

13.9 1

Per Capita GDP

16,206

14.6 1

Added Value Output
- Primary industry (RMB bn)

137.8

4.7 1

56.9 3

3.9 1

- Secondary industry (RMB bn)

396.7

15.1 1

232.0 3

19.0 1

- Tertiary industry (RMB bn)

388.6

17.7 1

208.3 3

10.9 1

Value-added Industrial Output 2 (RMB bn)

282.3

23.6 1

257.2

23.0 1

Fixed-assets Investment (RMB bn)

413.1

15.6

322.8

30.6

Retail Sales (RMB bn)

402.9

18.1

305.6

22.9

Inflation (Consumer Price Index, %)

4.8

7.7

Exports (US$ bn)

8.2

30.6

7.6

50.3

- By FIEs (US$ bn)

2.8

36.5

2.6

47.8

Imports (US$ bn)

6.7

21.5

6.0

42.1

- By FIEs (US$ bn)

2.8

6.2

2.4

33.0

Utilized Foreign Direct Investment (US$ bn)

2.8

12.9

2.0

12.4

Notes: 1 In real terms 2 For all state-owned enterprises and other forms with annual sales over RMB5 million
3 First half of 2008
Sources: Hubei Statistical Yearbook 2008, China's customs statistics 8.2008

General Background

Hubei has a total area of 185,900 square kilometers. Total population stood at 60.7 million in 2007.

The fertile Jianghan Plain in the province is one of the major agriculture and aquaculture bases in China, producing grain, cotton, oil-bearing crops, fishes and vegetables. The province is also very rich in mineral resources. Deposits of phosphate, salt, silica, garnet and marlstone are among the highest in China.

Wuhan, the capital city of Hubei, is historically a trading hub reaching out to provinces in central China. Now, it is a major commerce, distribution and transport center on the Yangtze River waterway. Many of China's rail lines go through Wuhan.

According to Hubei's 11th 5-Year Plan, it will focus on the development of hi-tech industries like telecom, biotech and optical electronics, as well as further development of existing pillar industries of auto, steel and petrochemicals. Traditional industries like textiles will be upgraded.

Industries

In the past two decades, tertiary sector was the most fast-growing sector, its share in GDP expanded from 18.3% in 1980 to 42.1% in 2007.

Composition of GDP (%)

1980

2005

2007

Primary

35.7

16.6

14.9

Secondary

46.0

43.1

43.0

...Industry

37.9

37.4

37.4

Tertiary

18.3

40.3

42.1

Source: Hubei Statistical Yearbook 2008

The province has developed into an important industrial production base. Major industries include metallurgy, automobiles, chemicals and construction materials, foodstuff, machine-building, textiles, electronics and ship-building. Hubei's abundant supply of hydroelectricity (Three Gorges Project) is conducive to heavy industry, which accounted for 74.0% of the total value of industrial output in 2007.

Value-added Share of Leading Industry Groups (2007)

% share of industrial
value-added

Transport equipment manufacturing

15.5

Productions and supply of electric power and heat

12.7

Food and beverage manufacturing and processing

8.8

Smelting and pressing of ferrous metals

8.1

Chemical raw materials and chemical products

6.2

Textile

4.1

Source: Hubei Statistical Yearbook 2008

Hubei has formed a relatively comprehensive iron and steel industry production chain including geological prospecting, designing, construction, mining, separation, smelting, rolling. The Wuhan Iron and Steel Corp. is one of the most famous steel giants in China.

Hubei is an important base of auto production in China. Hong Kong listed Dongfeng Motor Corp. and Aeolux Automotive Co. are the two key players, especially in western China. Hubei's output of automobiles reached 773.8 thousand in 2007. The concentration of automakers has also led to the development of the auto parts industry. Hundreds of auto parts manufacturers, local or foreign, have emerged in Wuhan.

The textiles and garment industry has developed into a comprehensive range of products including cotton textiles, wool textiles, linen textiles, knitting, silk textiles, printing and dyeing, chemical fiber, fabric material processing. It has successfully undergone a transformation, from concentrating on clothes to diversifying into intermediate products, e.g. coverings used by auto interiors.

In recent years, new and hi-tech industries have shown rapid growth. In 2007, value-added of hi-tech industry reached RMB 86.1 billion, an increase of 26.3% from 2006. A national laboratory in optical electronics was established in Wuhan, and is expected to make the city a national center in optical electronics and laser products.

Tourism

Hubei is rich in tourism resources. The famous Three Gorges takes the lead in the top 10 famous places of interest in China. Mount Wudang, Yellow Crane Tower and Jinzhou Ancient City are all renowned places for tourists.

2007

% change

Number of domestic tourist (million)

101.4

19.8

Income generated (RMB bn)

60.9

18.5

Number of overseas tourist (thousand)

1,318.2

24.9

Foreign exchange income (US$ mn)

412.6

29.0

Source: Hubei Statistical Yearbook 2008

Foreign Trade

Major exports included textile, garment, machinery, electronic component and device and medicinal raw material. Major export markets included the US, Hong Kong and South Korea.

Major imports included synthetic fiber, machinery, chemicals and pharmaceutical raw material, electronic equipment and instrument, ferrous and non-ferrous metal. Major import sources included Japan, France and Germany.

Foreign Direct Investment

Foreign investments mainly involved in the sectors of manufacturing (in particular chemicals, transport equipment and food and beverage production and processing etc), real estate and construction. Multi-national enterprises such as Coca-Cola, McDonald, Siemens, Philips and NEC have invested in Hubei.

FDI in Hubei

Item

By the End of 2007

2007

No. of contracts

11447

420

Contracted amount (US$ bn)

23.7

3.5

Utilised amount (US$ bn)

18.5

2.8

Source: Hubei Statistical Yearbook 2008

Hong Kong is the largest source of FDI in Hubei. Hong Kong companies such as New World, Shui On, Wharf, Sun Hung Kai and China Resources all have projects in Hubei. Other major investments came from France, the US, Japan and Taiwan.

Wuhan is the major destination of FDI in Hubei. In 2007, the city's utilized foreign investment amounted to US$2.3 billion. Besides Hong Kong, France is another major investor in the city. French investment in Wuhan mainly engaged in automobile industry. Famous enterprises include PSA Peugeot-Citroen, Renault, Carrefour, Societe Generale and the Total-Elf Group.

Consumer Market

In 2007, retail sales of consumer goods in Hubei rose by 18.1% to RMB 402.9 billion and per capita disposable income of urban households reached RMB11,485 (+17.2%).

Composition of Per Capita Expenditure of Urban Household (%)

1996

2007

Food

46.6

39.7

Clothing

14.7

12.0

Household articles

7.5

6.3

Medicine & medical services

3.0

6.0

Transportation & communications

4.7

10.4

Recreation, cultural & education

11.8

12.9

Residence

7.7

9.8

Source: Hubei Statistical Yearbook 1997, 2008

Wuhan has been a major distribution center in central China. It attracts a number of domestic and foreign retail enterprises to invest there in order to tap the market potential of the region. For instance, Jiali Mall of Hong Kong's Luks Industrial, New World Shopping Arcade of New World Development Group and Wuhan Mall of Tak Shun Group. Shanghai Commercial City from Shanghai and Wangfujing Department Store from Beijing have also set up their branches in Wuhan.

Major local retail enterprises in Wuhan include Wuhan Department Store, Wuhan Zhongnan Commercial Group, Wuhan Hanshang Group, Wuhan Zhongxing Department Store, Wuhan Yamao Shopping Center.

Economic Indicators of Major Cities (2007)

Cities

GDP
(RMB bn)

Per Capita GDP (RMB)

Value Added Industrial Output(RMB bn)

Retail Sales
(RMB bn)

Exports
(RMB mn)

Wuhan

314.2

35,582

119.7

151.8

4,753

Huangshi

25.4

35,261

12.5

10.4

490

Shiyan

25.6

48,629

13.2

8.6

24

Yichang

43.7

32,804

25.5

16.7

611

Xiangfan

47.4

22,500

21.4

18.8

277

Jingzhou

17.1

15,268

6.9

10.8

487

Source: Hubei Statistical Yearbook 2008