Anhui - The link between China's East and West

Located next to China’s wealthiest and most developed cities and provinces, Anhui has long been overshadowed by the affluence and influence of its powerful neighbours. Located in the Yangtze River hinterland, Anhui is considered part of the Yangtze River Delta Region, China’s largest and wealthiest economic zone. However, with the Government’s recent focus on the development of its second and third tier provinces, Anhui is quickly emerging as the key link between China’s rich eastern seaboard and underdeveloped western and central areas. The big cities of Shanghai, Nanjing and Wuhan lie within a 500-km radius of Hefei (Anhui’s capital) and within that radius; there are 500 million people who account for nearly 40% of the nation’s GDP.

About Anhui

Anhui province is considered part of China’s eastern region and is located across the basins of the Yangtze River and the Huai River. The province was established in the 17th century and is the birthplace of the famous Hui group of merchants, the strongest of all merchant groups in China. Anhui is regarded as a 2nd tier province, with a comparably lower GDP than others. However, similar to other 2nd the 3rd provinces, Anhui has a GDP growth rate of approximately 9% per annum.

Anhui’s geographical location boasts two significant advantages:

-          Firstly it lies on extremely fertile and mineral rich land. Over 123 different types of minerals have been discovered in Anhui and the province is considered to have some of the most abundant and rich reserves of coal, iron and copper.  It is no surprise that some of China’s well-known manufacturing corporations such as Ma Steel Group (iron and steel manufacturer) and Conch Group (plastic and cement producer) are based in Anhui.

-          Secondly, Anhui lies along the Yangtze River – China’s longest river connecting 11 provinces from the East China Sea to Sichuan. In September 2014, the Chinese Government launched the ‘Golden Waterway Yangtze River Economic Belt’, a national plan to transform the river region into an economic super zone. Port cities along the River (such as Wuhan and Chongqing) have also made transport and logistical plans to handle and take advantage of the expected increase in activity along the Yangtze. 

Major industries:

1.       Hardware and software – manufacturing and education

With its abundance of primary products and materials, a large population and its strategic location along the Yangtze, Anhui has long been considered as an important manufacturing hub for China. The province is well-known for producing modern equipment, automobiles and home appliances, and manufacturing petrochemicals and machinery. In fact, Anhui products are China’s leading automobile exports – making up 22.1% of the nation’s total. Also, the province’s production of air conditioners, televisions, refrigerators and washing machines accounts for approximately 20% of the national total. Its capital city, Hefei, is considered as China’s biggest production base for household appliances.

In recent years, the Government has made a concerted effort to push Anhui up the production value chain – developing its capabilities, skills and knowledge in the production of green and hi-tech products such as new energy materials, advanced intelligence information technology, biopharmaceuticals and hybrid cars and buses. To foster this growth, Anhui has implemented a strategic provincial plan which includes the establishment of three national technology and innovation zones and an economic district in the north which receives special benefits such as tax incentives and fee exemptions to encourage companies to experiment, innovate and nurture talent. The province is now well-known for its strengths in science and education – it houses over 2000 research institutes and universities and over 40 specialist laboratories and technology research centres, only second behind Beijing for its concentration of scientific education institutes.

2.       Transport

Anhui’s transportation infrastructure has been a popular target for investment and the province is now considered a sophisticated and diverse transportation and logistical hub. The province has six airports, providing passenger services to major Chinese destinations and some overseas cities such as Bangkok, Osaka and Singapore. Anhui also has nearly 400 berths along the Yangtze River with a carrying capacity of over 1,000-tonnes, the most in China’s central or western regions. Perhaps most significantly, Anhui is a major railway terminus, connecting China’s key north-south and east-west routes such as the Jinghu (Beijing-Shanghai) and Ningxi (Nanjing-Xian) lines. Fast trains from the capital Hefei reach Nanjing in only one hour, Wuhan in two hours, Shanghai in three hours and Beijing in less than four hours. There is currently nowhere else in China with such a dense concentration of high-speed railways either completed or under construction.

3.       Tourism

Anhui is a major tourist destination in China and its tourism industry accounts for a major proportion of its services sector’s revenue. Anhui boasts some of China’s most famous scenic areas, including the Yellow Mountain (Huangshan黃山) and Tianzhu Mountain (天柱山). Over the three-day May Day Holiday in 2014, over 20 million tourists travelled to Anhui. The Yellow Mountain alone attracted around 70,000 tourists. The tourism bureau also observed that more tourists were visiting natural and rural sites, rather than urban areas. However, much like China’s tourism industry as a whole, Anhui lacks the quality services it needs to cope with the sheer volume of tourists. The Yellow Mountain, in particular, has been identified as a site needing more sophisticated, streamlined and modern services as more and more tourists visit each year.

The opportunities

In China’s 12th Five-Year Plan, tourism and technology have been identified as target sectors requiring significant development and improvement and China is looking outside of its borders to source foreign talent, knowledge and investment to bolster their own capabilities. Perhaps what is most exciting about Anhui is its geographical location. Everyone knows the unprecedented pace at which China’s eastern seaboard was developed and how the central and western regions were largely neglected and overlooked. However, as part of the government’s “Go West” policy, there has been an enormous push to build up China’s underdeveloped western and central regions, encourage foreign companies to do business in these areas and transform many of these areas into important and specialised industry clusters. As these areas grow and develop, Anhui is poised to be the link between China’s east and west and will undoubtedly benefit from the increasing levels of trade, business and activity.