Province animated about its future as pop culture helps it beat the odds

PUBLISHED : Tuesday, 03 June, 2008, 12:00am
UPDATED : Tuesday, 03 June, 2008, 12:00am

Sandwiched between the poor western region and the rich coastal area, the inland province of Hunan has never been known for its economic prowess.

Nevertheless, the past decade has seen the central province chart its own growth path, despite a lack of many obvious natural advantages or policy preferences.

In the beginning - when China started to decentralise its economy 30 years ago - Hunan was as clueless as most other provinces. Although mining and industry had been developed since 1949, Hunan's economy remained mostly agricultural. It consistently ranked first nationally in rice output, exporting a large surplus to other provinces. But a strong agricultural industry did not bring wealth to the province's 65 million people.

'The smartest way to revitalise an economy is to explore what you've got and what you're good at, and build on that,' said Chen Shou , an economics professor from Hunan University.

Besides the right weather and soil conditions for rice paddies, Hunan's almost only other natural blessing is its considerable mineral wealth. The effective exploitation of these resources was given top priority as the provincial leaders juggled options to industrialise its economy.

Today, Hunan Nonferrous Metal has become China's largest producer of indium, tungsten, antimony and lead. Other heavy industries - many privately held - also started to grow in the mid-90s. Among them were Yada Chemicals and Broad Air Conditioning, one of China's top producers of large air-conditioning systems for office buildings. As Hunan's largest taxpayer, Broad is so vital to the local economy that a grateful provincial official once described its chief executive, Zhang Yue , as 'a god'.

'Private enterprises in Hunan are now growing at a booming 20 per cent, compared with 4 per cent for state enterprises,' Professor Chen said of the non-state sector. 'In the future, state enterprises will only play a role in strategic industries,' he predicted.

One state-owned company that has played a vital role in Hunan's economic development for the past decade is Hunan Satellite TV (HST). Finding its niche in producing entertaining and rowdy variety shows, it has flourished at a time when government support for Chinese television has dwindled.

Since it launched in 1997, revenue soared to more than a billion yuan last year, putting it in the national league and ahead of other provincial-level operations.

HST's unexpected success became a major inspiration for provincial policymakers. With TV as Hunan's No1 name card, HST began exploring business opportunities in other areas of pop culture.

Their efforts paid off handsomely in Changsha , the provincial capital, which developed into the country's top animation-production base, housing China's largest animation company, Hunan Great Dreams Cartoon.

The Blue Cat, China's first cartoon trademark, was born in Changsha in 1997, and has been raking in millions in export dollars with its hugely popular Blue Cat-themed merchandise.

'Hunan has been trying very hard to play up its cultural strength in developing its economy,' said Xie Chi , another economics professor from Hunan University. 'The province has become a trendsetter in the entertainment industry, and other provinces have just started to realise it's a hugely profitable business and are now scrambling to copy its formula.'

The growth of Hunan's media and entertainment industry has been momentous. Last year, it generated economic output of 87 billion yuan, up 21.5 per cent from 2006, and accounted for almost 5 per cent of its provincial GDP.

The 'Hunan style' growth path also attracted the attention of Beijing's policymakers. The State Council recently decided to designate the triangle formed by the three large cities of Changsha, Zhuzhou and Xiangtan as an experimental zone for energy-saving and green programmes.

Beijing's choice shows Hunan is back on the central government's radar after a long absence, analysts say.