China wants to develop a central hub in response to the large volumes of traffic coming from the west via the New Silk Road. It has selected Henan province, a province with relatively little economic activity until now.

Letty Zhu, who works as a lecturer at the Breda University of Applied Sciences is up to date about the latest developments in China. She will speak about the Henan hub and other plans of China at the New Silk Road Conference, that takes place on 27 September in Tilburg, the Netherlands. In an interview, she explained what the hub entails.

Distribution

“China has already developed the east coast, and later on the south-east of the country for the purpose of trade. It is now focussing on a centrally located province, from where all other destinations in China can be reached. This is the province of Henan: it is connected to all of China by rail”, she explained.

As more and more shippers move their goods via rail in the eastward direction, import volumes in China are on the rise. Meat products, wine and beers, diary, flowers, greenhouse equipment or milk powder for infants are among the products destined for the Chinese market. These need to be distributed across the country.

Infrastructure

“Henan already has the infrastructure to support its position as a hub. There is an extensive railway network to all corners of the country. Nine of the mainlines run through the province, in addition to four sublines. Moreover, it hosts a high density of highway, spanning six thousand kilometers. Henan also has the advantage of being flat, in contrast to the mountainous south of the country.”

However, Henan is economically underdeveloped in comparison to other regions. It has been dependent on agriculture up till now. But this is all the more reason for the government to invest in the area, said Zhu. “The land is cheap and the salaries are low. These are good investment conditions. The province is now more internationally oriented.”

Attracting business

“Henan province now aims to attract foreign investment in the region”, the lecturer explained. The focus is on increasing economic activity, and providing the facilities for companies to settle in the province. “There is still little competition, which is an advantage for companies. But the processes may in its infant shoes, Zhu said. The hub should be realised by 2020.

Do you want to hear more about the central hub in China, other developments or about the New Silk Road in general? The latest developments will be discussed at the New Silk Road Conference on 27 September in Tilburg, the Netherlands. More information about this conference can be found here. Here you can register for the event.