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Henan: Market Profile

Major Economic Indicators

Table: Major Economic Indicators
Table: Major Economic Indicators

 

General Background

Henan has a total area of 166,000 sq.km. Total population stood at 94.36 million at the end of 2014. Zhengzhou, the capital city of Henan province, is an important railway hub of China.

Henan is rich in mineral resources. Its reserves of molybdenum, marble trona, asbestos, aluminum, natural gas, cesium, bauxite, coal, perlite and refractory clay are among the largest in China. The Zhongyuan Oilfield (中原油田) is one of the largest oilfields and Pingdingshan Coal Mine is one of the four largest coal mines in China. About half of the aluminum oxide output in China comes from Henan.

Industries

Henan is one of the country's main commercial crops production areas. Major agricultural products include cotton, peanuts, mushrooms, tobacco and fruits. Henan has developed into an important food processing base in China, producing meat, frozen food, instant noodles, biscuits and seasonings etc.

Henan’s industry is dominated by heavy industry, which accounted for 66% of the total value-added industrial output in 2014. In the last ten years, the industrial sector has been developing rapidly in Henan with its share in GDP increased markedly.

 

Table: Composition of GDP (%)
Table: Composition of GDP (%)

 

Table: Value-added Share of Leading Industry Groups (2014)
Table: Value-added Share of Leading Industry Groups (2014)

 

Major industries of Henan comprise foods, chemical, automobile and parts, machinery production and textiles. Electronics and communication equipment is another area of fast growth. In 2014, the growth rate of high-tech industry reached 22.6%. Exports of high-tech products grew by 6% to US$22.2 billion. Foxconn from Taiwan has established its assembly plant of mobile phones in Zhengzhou of Henan since 2010, stimulating the growth of related industries.

Tourism

As the birthplace of the Han people, Henan has many cultural heritages and scenic spots. There are three capital cities of ancient China in the province: Luoyang, Kaifeng and Anyang, all of which have many sites of great historical value, e.g. the Longmen Grottoes is one of the World Heritage Sites.

In 2014, Henan received 456 million (+11.6%) domestic tourists with tourism receipts of RMB432 billion (+12.7%) while overseas tourists grew by 9.7% to 2.27 million with tourism receipts of US$725 million (+9.9%).

Foreign Trade

Major exports included base metals, machinery, textile materials and chemical products. Exports of machinery, electric equipment & accessories accounted for about 67% of Henan’s total exports in 2014. Mobile phone is one of the leading export items.

With more relocation of manufacturing activities from the coastal region in recent years, processing trade accounted for 62% of total exports in 2014, up from 19% in 2010. Foreign-invested enterprises accounted for 62.2% of exports in 2014, up from 24.3% in 2010.

The US was the leading export market in 2014, followed by Japan.  In 2014, exports to Hong Kong grew by 18.1% to US$1,718 million, accounting for 4.4% of the total exports.

Major imports were electronic parts and components, electric equipment products, chemicals, plastics & related products, minerals and base metals. Major import sources in 2014 were Australia, South Korea, Japan and Taiwan.

Foreign Investment

Inflows of FDI have recorded marked growth in recent years. In 2014, investment from other provinces in China grew by 16.3% to RMB720.6billion.

Chart: Utilized FDI of Henan
Chart: Utilized FDI of Henan

 

Foreign direct investments mainly engaged in manufacturing (68.4% of total investment in 2014) and real estate (7.1%). Industries of high efficiency and low consumption of energy are encouraged, and more FDI are expected to flow into services sectors.

Hong Kong is the largest source of foreign direct investment in Henan. In 2014, actual investment from Hong Kong amounted to US$10.62 billion (+10.6%), accounting for 71% of the total. Other major sources of investment included Taiwan, the US and Singapore.

Consumer Market

Major consumer markets are located in Zhengzhou, Nanyang and Luoyang.  In 2014, annual per capita disposal income of urban households reached RMB24,391 (+8.9%).

Zhengzhou is traditionally a major distribution center in central China. It was approved by the state to be the pilot center for distribution reforms. Major retail operators include Jinboda Commercial Mansion (金博大), Denis Department Store (丹尼斯百貨), Dashang Group New Mart Shopping Plaza (大商集團新瑪特購物廣場), Carrefour and Walmart.

 

Table: Composition of Per Capita Expenditure of Urban Household (%)
Table: Composition of Per Capita Expenditure of Urban Household (%)

 

Table: Economic Indicators of Major Cities (2014)
Table: Economic Indicators of Major Cities (2014)
Content provided by Picture: HKTDC Research
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