Once a railway town, Zhengzhou now busy air hub thanks to ‘Applemania’

PUBLISHED : Wednesday, 10 September, 2014, 10:10am
UPDATED : Wednesday, 10 September, 2014, 10:20am

While Apple chief executive Tim Cook stood at the epicentre of the tech world in Cupertino, California with the iPhone 6 product launch on Tuesday, 10,000km away in Zhengzhou in central China, workers have been busy since the start of September loading trucks and planes with the new smartphone, and the whole city is expecting a boom from another wave of “Applemania”.

Zhengzhou, capital of Henan province, is where Apple’s contract manufacturing giant Foxconn produced 96.45 million iPhones last year, or two-thirds of the total number sold worldwide that year. The arrival of Foxconn to the city in late 2010 has led to the take-off of an aviation economy in Zhengzhou that was previously known as Asia’s largest railway junction.

“I heard Foxconn has added thousands of new workers to the assembly line for the new iPhone,” said Huang Qing, deputy director of the management committee of the pilot Zhengzhou Airport Economic Zone, where Foxconn’s factory is located.

Foxconn, which could not be reached for comment, employs 200,000 people in the zone and single-handedly contributed 60 per cent of Henan province’s import-export value with its industrial output value of 180 billion yuan (HK$226.5 billion) last year, according to Huang.

Zhengzhou has become the preferred port by the market
Zhang Dawei

Zhengzhou has long been the most important transport hub in central China, located at the intersection of the country’s north-south and east-west trunk rail routes. Seven million people are within reach of a two-hour high-speed train ride and two thirds of China is within a 1.5-hour flight radius.

Zhengzhou airport saw cargo traffic triple in the past three years, far ahead of its passenger traffic growth. In the first seven months of this year, tonnage at the airport increased more than 120 per cent, 20 times more than the national average of 6 per cent, making it by far the country’s fastest growing cargo airport.

“The trans-shipment ratio is 81.5 per cent for cargo coming in and 64.3 per cent for cargo going out of Zhengzhou,” said Zhang Dawei, deputy director of the Henan provincial congress standing committee. “Given that there are important airports nearby, this means Zhengzhou has become the preferred port by the market, likely due to the low cost of international transportation and convenience of domestic distribution from here.”

Zhengzhou airport now serves 161 domestic and international routes, including 28 freighter-only ones. With one runway at the moment, it plans to add four more, including one dedicated to freighters. The 415 sq km airport economic zone, the country’s first such zone approved by the state council in March last year, is aimed at attracting key industries including aviation logistics, high-end manufacturing and modern service industries.

UPS, DHL, and Russia’s AirBridgeCargo have set up bases in the zone while Europe’s largest cargo airline Cargolux has made Zhengzhou its other hub outside Luxembourg after the Henan government bought a 35 per cent stake last year.

“We aspire to become the world’s largest smartphone manufacturing base that will have annual production capacity of 50 million phones in five to 10 years,” Huang said. Shenzhen, currently China’s largest, accounts for 40 per cent of the smartphones produced in the country.

Huang said the target this year is to manufacture 150 million mobile phones, with Foxconn planning to make 110 to 120 million iPhones. More than a dozen Chinese smartphone manufacturers have also set up factories in the zone, he said.

An industry insider, who declined to be named, said; “It is very risky to rely too much on one enterprise. Shenzhen became too expensive so Foxconn came [to Zhengzhou]. When Zhengzhou becomes too expensive, where would it go next and what would happen to all this?”