By Andy Scott

WUHAN, April 28 - The Expo Central China 2008 came to a close today in the city of Wuhan, the provincial capital of Hubei province. The third of its kind, the expo is an opportunity for the Central China provinces of Anhui, Henan, Hubei, Hunan, Jiangxi and Shanxi to attract investor attention to a region that has historically lagged in development behind China’s coastal provinces. As investor sentiment has waned for China’s coastal regions where the rising costs of doing business are beginning to force large corporations to rethink their China strategy, the Central China region, and especially Wuhan with its perfectly centered location in China, is looking to take advantage. Long considered a secondary market, the completion of the new, expanded Wuhan Tianhe International airport as well as the continued dredging of the Yangtze downriver is turning Wuhan into destination for foreign investment.

The expo’s theme focused on the region’s belief that industry inside China is indeed beginning to shift, and the main focus of many of the provincial officials at the expo was directing inbound investment from the coast. At the opening ceremony, Vice-Premier Wang Qishan stressed that the region needed further reform and opening-up, stressing awareness of reform, innovation, and the rule of law as keys. (more…)

April 7 - Investing in China’s Western regions has long been a favorite topic of China Briefing – the magazine released its first overview of them way back in 2002 in an out-of-print issue that we have resurrected for you. The region was subsequently covered by us again in 2003 and we also produced a financial comparison, again in the magazine, about investing in China’s central and western regions some 18 months ago (click on the relevant cover to download the issue).

Foreign businesses in the Western regions, as the Senior Partner of Dezan Shira & Associates, Chris Devonshire-Ellis advises, have all been centered on the local market, and with just a few exceptions, not for export at this stage of the regions development. (more…)

Chinese New Year passenger travel discouraged in favor of energy supplies – more heavy snowfalls forecast 

February 4th  - China continues to have problems with its worst winter weather for 50 years as further heavy snow hit already stressed cities and towns in much of the country. With the military already deployed and tanks on the roads in some areas to assist with snow and debris clearance, power shortages threaten anew as raw materials such as coal and coke have been delayed in getting to power plants. Rail rolling stock has been diverted away from the normal passenger transit duties as this time of year, with Chinese New Year’s eve just 36 hours away, in order to allow reasonable chances of the power supply being maintained. Up to 60% of all passengers are now expected to stay put rather than travel back to their homes, effectively missing Chinese New Year celebrations with their families. A record number of over 42,000 rail container trucks laden with coal and coke were transported just today (Monday) alone to ensure national power supplies could be maintained – over 25% more than the norm at this time of year. Both army and civilian maintenance crews were also working around the clock to repair broken or damaged power lines in Guangdong, Guizhou and Henan Provinces, where millions of people have been without power for over a week.

Several energy intensive metal producing plants have also been ordered to shut down to conserve fuel, with the aluminum and steel industries worst hit, a situation reflected in the world’s trading bourse, the London Metal Exchange, where futures contracts have shown sharp increases in value and the daily trading rate have shot up by more than 10% in the past few days for these commodities as shortages loom. The supply chain knock-on effect has also led to several auto manufacturers in China to either close or reduce capacity as sheet metals are not reaching their production lines. Nissan, Honda, Toyota, Ford and Mazda have all closed some or all of their plants.   (more…)

By Andy Scott

SHANGHAI, Jan. 29 - The biggest winter storm to hit many parts of eastern China in 50 years brought down buildings, closed train stations and left millions stranded throughout the country just days ahead of the biggest holiday season.

One day after the storm killed at least a dozen people and brought much of central and eastern China to a halt; it continues to wreak havoc on the country’s road, rail and airport networks. Most flights out of Hongqiao Airport were delayed or canceled for a second straight day, while traffic slowly returned to the region’s rail and roadways. Trains out of Shanghai continued to see major delays of up to 10 hours today and travelers found themselves having to make the best of a bad situation, often transferring tickets and taking round-about routes to reach destinations in the Yangtze River Delta. (more…)

By Andy Scott

SHANGHAI, Sept. 11 - China’s new policy restricting processing trade, which took effect nationwide August 23, will most heavily impact Guangdong province. The booming Chinese economy, which has grown at over 10 percent for the last 15 years, has been largely driven by processing trade factories located in South China and the Yangtze River Delta region, importing tax-deductible raw materials to manufacture finished products for export. Of the over 90,000 processing trade firms operating on the mainland, nearly 70,000 are located in Guangdong province according to the National Bureau of Statistics.

However, in its continued efforts to develop the central and western regions which have not profited from China’s economic surge, Beijing has stipulated that the new regulations will not affect enterprises operating in those regions.

With that in mind, we decided to take a look at central China, an area that includes the six provinces of Anhui, Henan, Hubei, Hunan, Jiangxi and Shanxi. It includes 30 airports, 12 inland ports, 460,000 kilometers of highway and approximately 15,000 kilometers of railway. Would it be better for processing trade manufacturers to move their operations inland, or look for other possibilities to dealing with Notice 44? (more…)

The city of Changsha is to become one of the two centers tourism in Hunan province in the next ten years.  According to the Hunan Tourism Industry Development General Plan, approved May 20, Hunan will build tourism around two “cores:” the provincial capital of Changsha and Zhangjiajie, a UNESCO World Heritage Site located in the west of the province.

The goal is to build Changsha into “an internationally attractive capital of Chinese culture and leisure tourism, and Zhangjiajie into an internationally attractive Chinese and world heritage tourism city” according to Xinhua.

The plan, which divides the province into three parts - Changsha, Grand West Hunan, and Grand South Hunan - for tourism development, aims for Hunan to receive 100 million domestic tourists, bringing in 110 billion yuan in tourism revenue by 2010, accounting for 10 percent of the province’s GDP.  (more…)