Go China - Zhengzhou (2012)

Ideal 'place to stay'

City and province trying to end perception as 'providers of human resources'.

PUBLISHED : Tuesday, 06 November, 2012, 3:52pm
UPDATED : Tuesday, 06 November, 2012, 3:52pm

Zhengzhou continues to enjoy impressive growth, with government statistics indicating that the city's gross domestic product last year leapt 13.2 per cent to 491.27 billion yuan (HK$608.91 billion).

The city is building on Henan's place as the fifth-largest provincial economy. Powering the economy is a mix of heavy machinery manufacturing and the production of enormous quantities of agricultural goods, says Jerry Cao, an assistant professor of finance at Singapore Management University.

The city and the province have been working to overcome their historical reputation as "providers of human resources, rather than a place where people stay, that's been the narrative up until now", says Adam Mayer, who works with Steinberg Architects of the United States, which in involved in community projects on the mainland.

That reputation is starting to be turned on its head, with Foxconn setting up new facilities in the city and airlines, such as Dragonair and Taiwan's EVA Air, launching new routes to service Zhengzhou.

Key industries include vehicle manufacturing, energy, steel manufacturing and frozen foods. One of the main economic drivers in the last few years has been the Zhengdong New District, a new and unfolding addition to the city.

"What's built now is a central business district of about 3.5 square kilometres with nice architecture, a convention centre, the Henan Museum and a ring road, but they are talking about a 150-square-kilometre development, notes Wendell Cox, the principal at Demographia, an international public policy firm based in the US city of St Louis.

The district has been a construction jobs boon and a generous source of income for the city coffers, given that "land sales are a major portion of local revenue", says Lynette Ong, a political economist and associate professor at the University of Toronto, Canada.

Still, developing a massive new district is a process not likely to be accomplished overnight and construction often comes in advance of local tenants for the new facilities. "These things often take much longer than anticipated," Cox says. Ong is more guarded, suggesting that "depending on how much the prices drop, they will fill up".

Cox is upbeat about Zhengzhou's prospects in the medium term, noting that it benefits from the central government's support for the Zhongyuan Economic Zone, which has garnered official pledges of support.