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Josephine Ma

The Mayor of Yueyang, Huang Jiaxi , knows it is time for his city to take off, especially if the level of state investment is any indication.

  Long neglected by the state and foreign investors, the city in northern Hunan aims to leapfrog others in the province to become second only to provincial capital Changsha.

  The city is famous in China for a Song dynasty essay about the scenic Yueyang Tower. Yet internationally, little is known about it, if the meagre level of foreign investment is a guide.

  Mr Huang's optimism has been boosted by Beijing's decision to invest 30 billion yuan (about HK$27.9 billion) in Yueyang's industry and infrastructure from 1996 to 2000, so far the highest in Hunan.

   'This amount is much higher than Changsha . . . I am very confident that Yueyang will take off in the Ninth Five-Year [Plan],' Mr Huang said.

  Despite Yueyang's fame as an ancient strategic military base and trading port along the Yangtze River, the 2,500-year-old city is young in terms of industrial development.

  It has long been a major agricultural and port base, but the city's industrial development started only in the late 1980s, after Changsha and Zhuzhou.

  Changsha, the province's commercial and trading centre, is built on textiles, machineries and petrochemicals.

  Zhuzhou acquired a reputation as the province's major heavy industrial base when the state located many strategic industries such as machineries and metallurgy there.

  Being late to develop has its advantages, however.

  Yueyang has been spared the crippling burden of a large state sector and has fewer retired workers to support than Changsha and Zhuzhou.

  The city is also one of few, if not the only one, in Hunan to be built using modern town planning methods. Its urban streets are relatively clean and well-built.

  'A late start can be a good thing and a bad thing. Shenzhen is a good example of a village which was turned into a modern city easily because it had no historical burden,' Mr Huang said.

  Yueyang's Gross Domestic Product (GDP) ranked third in the province at about 25 billion yuan last year after Changsha and Changde, which have a much larger area.

   Mr Huang said the city aimed to reach the average economic level of major cities along the Yangtze such as Nanjing, Wuhan and Chongqing.

  'Our agricultural sector cannot surpass Changde, which is at the other side of Dongting Lake, as its size is larger than ours. But our industry has already raced ahead of Zhuzhou as the second in Hunan.'   Yueyang's major advantage was its geographic location, he said.

  The city, named as one of six open ports along the Yangtze by the State Council in 1992, is the only one in landlocked Hunan to have access to the sea.

  It is at the intersection of Dongting Lake, the Yangtze and the Xiang, Zhi, Yuan and Li rivers.

  Yueyang also stands on China's busiest railway and highway, both running from Beijing to Guangzhou.

  Convenient transport has made the development of pillar industries such as petrochemicals possible.

   Baling Petrochemical Corp, a unit of the China National Petrochemical Corp (Sinopec), is in Yueyang because crude oil can be transported through the city's Chenglinji port.

  The port enables coal transport to Huaneng Yueyang power plant, the major electricity supplier in northern Hunan with two 350-megawatt generators.

  Mr Huang said: 'The traditional saying that a place can get rich if it is next to water is always true. Dongting Lake and the Yangtze River have made Yueyang a rich place in history.'   Yueyang, sitting at the eastern bank of Dongting Lake, and Changde, at the western bank, benefit from the fertile Dongting Lake District and are called the 'home of fish and rice' in Hunan.

  Agriculture took up 35.4 per cent of Yueyang's GDP in 1995 while industry accounted for 33.7 per cent.

  The city's industrial strength lies in agriculture-related sectors such as animal feed, fertiliser and food.

  Yueyang has high hopes for Baling Petrochemical, which plans to invest 13 billion yuan in the city by 2000.

  The city plans to list more companies on the stock exchange in an effort to boost its industrial development.

  Yueyang has applied to the provincial government to list Zhenhong Animal Feed Co and Xingchang Co, a unit of Baling Petrochemical, as A shares in Shenzhen.

  Yueyang Hengli Air Cooling Equipment, which issued A shares in Shenzhen last November, was the first Yueyang company to go public.

  Despite the rosy outlook, the city has many hurdles to overcome in its drive to produce an economic boom.

  Foreign investment is minimal. Yueyang's total foreign investment from 1984 to November last year was US$901 million. Of this, more than $700 million is in loans from foreign governments, the World Bank and Asian Development Bank.

  In the first 11 months last year, total foreign investment was $52 million.

  In order to boost foreign investment, the city is eager to make itself known outside China. Last year, it hosted its first international dragon boat race and invited teams from all around the world.

  Officials said the city hoped to use its fame as the origin of the dragon boat festival to attract more foreign investment. The festival is a memorial to ancient poet Qu Yuan, who jumped into the Miluo River in Yueyang.

  Most of Yueyang's pillar industries apart from petrochemicals, animal feed, textiles, paper-making and construction materials are either in difficulty or relatively small in scale.

  Its two ports, Chenglinji and Yueyang, have surplus capacity and have lost business to road transport.

  The city is eager to form its own fleet to transport cargo from Shanghai to ports along the Yangtze. Other cities dominate this lucrative trade.

  It is also keen to increase its power-generating capacity. The second phase of Huaneng Yueyang power plant will increase capacity by 720MW by 2000.



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