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Party chief sets goal for province's development

By Gao Changxin and Zhou Lihua ( China Daily )

Updated: 2012-03-06

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Party chief sets goal for province's development

Central China's Hubei province will step up efforts to attract foreign investment in a bid to double its gross domestic product by 2016, the province's Party chief said.

Referring to Hubei's aim to take over manufacturing capacity from the eastern coastal area, Li Hongzhong, secretary of the Communist Party of China Hubei provincial committee, said "the time has come for Hubei to leapfrog in its development".

"We are glad to be in such a great era, and will do our best to live up to what we are given," he added.

Li made the comment as soaring labor costs in the eastern coastal area are pushing enterprises, both domestic and foreign, to move manufacturing capacity into central and western areas, where labor costs are lower.

The ongoing trend provides inland provinces, such as Hubei, with a great opportunity to receive investment and crank up economic growth.

Li believes Hubei has the potential to become the destination of the industrial migration because the province of 60 million people has a "huge amount" of cheap yet high-quality labor and abundant natural resources.

A relatively sound infrastructure and investment environment, combined with a vast market, also give Hubei the upper hand over other inland provinces. In 2010, the province announced a 12-trillion-yuan ($1.9 trillion) investment budget, with 30 percent to be invested in infrastructure.

An expected influx of investment will help Hubei double its GDP to 3 trillion yuan by 2016, Li said. Last year, Hubei's GDP increased 13.8 percent, the highest among central provinces and beating the national average by 4.6 percentage points.

"Hubei's economy will further benefit from the inflow of international capital and industrial migration from the Yangtze River Delta and the Pearl River Delta regions," said Li.

Zhu Jianfeng, general manager of Gold Emperor Shoes, a shoemaker based in Wenzhou, Zhejiang province, said the company is exploring the possibility of moving its factories to inland provinces, including Hubei.

"We are raising our salaries by 20 percent this year, which will cost us tens of millions of yuan annually. We are looking to see if we can move somewhere where wages are lower," he said.

Foreign investment in Hubei has already started to increase significantly. In 2011, up to 339 foreign investment projects were launched in the province. The projects have a total investment of $4.66 billion, with 12 of them investing more than $100 million each.

Last month, the province signed a $1.5-billion cooperation agreement with companies based in Silicon Valley, California, covering the semi-conductor industry and medical technology.

You may contact the writers at gaochangxin@chinadaily.com.cn and zhoulihua@chinadaily.com.cn.

(China Daily 03/06/2012 page3)

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