Decoding central China's evolution into a global industrial powerhouse
Peking Ensight explores central China's rise to the forefront of China's industrial landscape. Join us as we unravel the secrets that have brought the heartland onto a fast track of development.
Among China's list of 45 industrial clusters encompassing coastal metropolises and provincial capitals, the inclusion of a tier-3 city might seem unexpected. However, Zhuzhou definitely merits its presence.
Situated in central China's Hunan Province with a modest 3.9-million population, the city of Zhuzhou has emerged as a key player in China's industrial scene by successfully establishing two world-leading industrial clusters.
Currently, the city's rail transit equipment manufacturing cluster has exceeded 140 billion yuan (19.73 billion USD) in value, with products holding an over one-fourth share in the global market. The city also boasts China's largest research and production cluster for small and medium-sized aircraft engines, manufacturing approximately 90 percent of such equipment used across the country.
Zhuzhou's progress epitomizes the exceptional transformation unfolding across central China, which comprises six provinces: Shanxi, Henan, Anhui, Hubei, Jiangxi, and Hunan.
Strategically located and rich in resources, this heartland region boasts a glorious past as a heavy-industry hub. Rather than succumbing to the fate of becoming another "rust belt,” the region has opted for a different path.
Over the years, central China has committed to industrial upgrades and innovation, effectively advancing tech-fueled revitalization. Zhuzhou exemplifies this progress, with the city's total R&D investment witnessing an annual growth rate of above 9 percent in recent years. Moreover, it has set up over 270 national and provincial tech innovation platforms, which significantly diversify and enrich its talent pool.
The central region is increasingly pivotal to China's development strategy, focusing on nurturing industrial clusters that prioritize advanced manufacturing sectors such as electronic information, new materials and AI.
While presiding over a symposium in Changsha, Hunan earlier this week, Chinese President Xi Jinping outlined the latest blueprint for the development of the central region.
During his speech, Xi highlighted the region's pivotal role as the country's important "grain production base, energy and raw material base, modern equipment manufacturing and high-tech industry base, and comprehensive transportation hub".
He called for synergy in "promoting high-quality development and writing new chapters of energizing the central region in the process of advancing Chinese modernization".
Here is a summary of the essential points from his speech (Click here to read the full text of Xi's speech at the symposium and Click here to read the English version):
Sci-tech innovation
The central region should push forward industrial innovation led by scientific and technological innovation, and actively cultivate new quality productive forces.
Expand and strengthen advanced manufacturing; actively promote new industrialization; transform and upgrading traditional industries; cultivate emerging industries; advance the layout of future industries; accelerate the construction of a modern industrial system supported by advanced manufacturing.
Place more emphasis on the integration of sci-tech innovation and industrial innovation; make more breakthroughs in science and technology to provide greater support for the innovation-driven industrial development.
Consolidate enterprises' pivotal role in innovation; build an innovation mechanism with close upstream-downstream cooperation; promote industry-university-research innovation; accelerate the transformation of sci-tech achievements into real productive forces.
Carry out major technological upgrades and large-scale equipment renewals in the manufacturing industry; Promote high-end, intelligent and green development of manufacturing to inject new vitality into traditional industries.
Connectivity
Bolster its connectivity with the Beijing-Tianjin-Hebei Region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area; Contribute more to the development of the Yangtze River Economic Belt, as well as the ecological protection and high-quality development across the Yellow River basin.
Strengthen the construction of modern transportation infrastructure; consolidate the region's position as a major passageways.
Improve inter-provincial cooperation mechanisms within the region; facilitate regional coordinated development.
Promote the development of urban clusters in the middle reaches of the Yangtze River and the Central Plains; strengthen coordination and interaction among metropolitan areas; Bring surrounding areas onto the development path.
Opening-up
Advance thorough reforms and high-level opening-up in a coordinated manner; build the central region into an inland gateway for opening-up with greater competitiveness.
Deepen market-oriented reform for factors of production; improve the basic system of the market economy; comprehensively rectify local protectionism; Encourage cross-regional flows and optimal allocation of all factors of productivity; actively participate in the development of a unified domestic market across the country.
Steadily expand institutional opening-up; integrate deeper in the Belt and Road initiative, foster stronger connection to the new Eurasian Land Bridge and the New International Land-Sea Trade Corridor; build pilot free trade zones with high standards; build more high-standard platforms for opening-up and cooperation.
Strengthen the development of a market-oriented, law-based and world-class business environment to attract both domestic and foreign capital and resources.
In 2021, China's State Council issued a set of guidelines aimed at promoting "high-quality development of the central region in a new era." These guidelines outlined strategies to facilitate economic, social and ecological progress across the region, singling out five development models as top priorities (Click here to read the full text of the 2021 guidelines):
Innovation-driven development: Establish a modern industrial system underpinned by advanced manufacturing; strengthen autonomous innovation capabilities; foster the growth of industrial clusters; promote seamless integration between advanced manufacturing and modern service sectors.
Coordinated development: Encourage balanced urban-rural development; improve the quality of urban spaces; expedite agricultural and rural modernization; promote collaboration between provinces and the coordinated development of border areas.
Green development: Build ecological security barriers; strengthen partnerships in ecological and environmental governance; incentivize eco-friendly production methods and lifestyles; create a "beautiful central China" characterized by sustainable practices.
Open development: Expedite the establishment of inland channels for global cooperation; create high-level platforms for inland opening-up; optimize the business environment for investors.
Shared development: Enhance basic public services; prioritize the provision of high-quality public services; integrate innovative methods into social governance.
The guidelines specifically designate Wuhan and Hefei, capitals of Hubei and Anhui, respectively, to establish cutting-edge manufacturing clusters. Wuhan aims to develop an "Optics Valley," focusing on optics and photonics technologies, while Hefei is tasked to cultivate a "Speech Valley," revolving around automated speech recognition and natural language processing.
Three years into its development, Optics Valley has evolved into a global hi-tech hub and has significantly expanded its business scope. Initially centered on photonics, Optics Valley now incorporates burgeoning sectors such as biopharmaceutics, telecommunications and advanced equipment manufacturing. It is further supported by various sci-tech centers, including the East Lake Science City.
Located approximately 320 km northeast, Hefei's Speech Valley, China's first national AI industrial cluster, has attracted over 1,000 companies with a combined value exceeding 100 billion yuan. A prominent example is iFLYTEK, a worldwide frontrunner in providing AI solutions for speech recognition and processing.
In addition to encouraging tech innovation, the six central provinces are dedicated to becoming gateways to overseas market. To realize this ambition, they have implemented an array of measures to enhance their openness and global connectivity.
A case in point is Henan, a landlocked province traditionally known for agriculture, which is bolstering its transport and telecommunications infrastructure to improve its global connectivity. The province is accelerating the development of four "Silk Roads" designed to improve air, internet, land, and maritime connections to better link itself with the rest of the world.
Likewise, Shanxi and Anhui are actively promoting foreign trade through the implementation of favorable policies for trading companies and the establishment of multiple zones dedicated to opening-up. These moves demonstrate the steadfast commitment of these central provinces to exploring the global market and sharing growth opportunities with the international community.
Written by Shaun G