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Inland regions along Yangtze arise as rising stars
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AFTER working in Shanghai for seven years, welder Wang Ting got a job offer from the inland city of Wuhan. He did not think twice before accepting, not only did it mean he could return to his hometown but the area has emerged as an economically promising region with plenty of opportunities.
“Export companies in Shanghai have been struggling, and salaries in Wuhan have caught up,” said the 35-year-old from Hubei Province. “It’s easy to find a job there and it’s close to my hometown, so why not?”
For decades, the eastern metropolis of Shanghai on the Yangtze River Delta has abounded with high-paying jobs that made it a magnet for workers from upstream cities like Wuhan. The situation is now being reversed.
As rising costs and waning exports dragged down economic growth in coastal China, inland provinces along China’s longest river, the Yangtze, have emerged as rising stars thanks to the convenient water routes, lower costs and booming markets.
Take GDP growth in the first three quarters for instance: the riverside municipality of Chongqing (11 percent) and provinces of Jiangxi (9.2 percent) and Hubei (8.8 percent) have overtaken their coastal peers Shanghai (6.8 percent) and Guangdong (7.9 percent), and now rank among the fastest growing parts of China. They also stood out as other inland regions, such as northeast and north China, struggle with industrial restructuring.
Both workers and investment are following the river upstream from the coastal regions. Wang’s new employer, an auto parts factory, is a supplier to Shanghai General Motors.
Despite the slowing car sales in China, the Sino-US joint venture invested US$110 million into its fourth China factory, in Wuhan, which is capable of producing 240,000 cars a year. Another injection of US$120 million will double its capacity by 2017.
“The company’s strategy is clear: China’s coastal market are saturated, so it is eying the huge, untapped market in central and western China,” said car industry analyst Jia Xinguang.
“It is moving production there, and the best location is the middle reach of the Yangtze, which boasts good transportation links, low costs and proximity to the central and western markets,” he said.
This strategy is similar to the approach of Beijing Hyundai, a joint venture between Beijing Automotive Group and South Korea’s Hyundai Motor Co, which is building a new factory in Chongqing, a sprawling city in the upper reaches of the Yangtze that aims to become “China’s Detroit.”
Easy flow
Many inland provinces along the Yangtze are under the “Yangtze River Economic Belt,” an area earmarked as a new economic powerhouse with the potential to offset the current downturn.
Covering 11 provinces and municipalities, the belt has a mature transport network centering around the Yangtze.
Compared with railways and air transport, water transport can support higher volumes at a fraction of the cost. However, the waterway’s potential is hindered by poor infrastructure, said Tang Guanjun from the Ministry of Transport.
In response, the central government has prioritized waterway and port upgrading. The river’s Jingzhou and Luzhou sections are being deepened to take larger ships, and a number of ports and highways are being constructed along the 6,300-kilometer waterway.
Many firms are moving to the region to benefit from the infrastructure boom.
Ezhou City, located on the southern bank of the Yangtze in Hubei, has seen warehouses spring up as courier companies and online shopping platforms relocate there.
Chinese courier SF Express is building an airport complete with a logistic center in Ezhou’s Yanji Township.
“We picked Ezhou for its convenient water, road and railway connections and the bright prospects of the Yangtze River Economic Belt,” said Liu Zhiming, a managing director with SF Express.
On the national level, the waterway, which links the wealthy and industrialized delta and the less-developed inland, has been highlighted for buoying the economy and supporting development.
Qin Zunwen, vice dean of Hubei’s Academy of Social Sciences, said the Yangtze belt will likely become a key pillar of the Chinese economy.
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