Anhui punching above weight in steadily moving up the industrial value chain

Businesses have been benefiting from high-quality opening-up in Anhui province.

Sinotrans Logistics upgraded its branch in the province's capital city of Hefei into its Central China headquarters in 2019.

The company took the decision to upgrade its branch after a top symposium was held in May 2019 in Nanchang, Jiangxi province, which focused on the rise of the central part of China.

The region includes the provinces of Anhui, Henan, Hubei, Hunan, Jiangxi and Shanxi.

"The central region's increasingly robust manufacturing sector has been bringing more opportunities for logistics companies, while Anhui could lead the growth," said Tang Na, general manager of Hefei-based Sinotrans Logistics Central China Ltd.

He said the company's 2020 operating revenue in Anhui alone reached about 200 million yuan ($30.6 million) and the performance in the first quarter of this year is expected to improve even more.

Currently using rented storage plants, Tang said his company is now building multiple facilities of its own across Hefei, which will see a total investment of 1.7 billion yuan.

Included in the country's ambitious blueprint for the rise of the central region, Anhui is also, even more often, regarded as a part of East China.

China has vowed to step up the integrated development of the Yangtze River Delta region, which includes Shanghai along with the provinces of Anhui, Jiangsu and Zhejiang.

As a result of recent reforms and opening-up measures, cargo transported to and from the eastern coastal areas can now complete Customs clearance in Anhui conveniently, which means importers and exporters can save time and storage costs, Tang added.

Though not a customer of Tang's company, personal computer manufacturer LCFC (Hefei) Electronics Technology has been a major exporter.

In the last week of 2020, the Hefei-based manufacturer announced that its annual sales revenue had for the first time surpassed 100 billion yuan.

Founded in 2011 in the Hefei Economic and Technological Development Area, LCFC is Lenovo's largest PC manufacturing base in China. With a foreign trade volume of $8.5 billion in 2020, LCFC had remained the province's largest company for imports and exports for seven consecutive years as of 2020, according to provincial government statistics.

The province's annual foreign trade volume climbed 14.1 percent year-on-year to 540.6 billion yuan in 2020, according to official statistics.

By improving its opening-up level, the provincial government aims to increase Anhui's annual foreign trade volume to more than $100 billion during the 14th Five-Year Plan (2021-25) period.

In recent years, Anhui's imports have been expanding more quickly than exports, which is not a common phenomenon in the central region.

The province's 2020 import volume saw a year-on-year growth of 15 percent to 224.5 billion yuan, in contrast to the export sector's growth of 13.5 percent to 316.1 billion yuan, according to the local government.

Chery Holding Group, holder of Chinese auto brand Chery based in Wuhu, Anhui, has been one of the largest beneficiaries of the enhanced opening-up policy.

The company has been exploring two-way trade, a model through which it exports vehicles overseas before getting other commodities instead of currency with equivalent value imported to China, since 2019.

Wang Zhibin, who is in charge of Chery's cross-border e-commerce business, said the group recorded two-way trade volume of about 900 million yuan last year.

"Two-way trade volume has significant room for future growth, as the group exported more than 114,000 vehicles," Wang said.

During a conference on April 1, the Standing Committee of the Communist Party of China (CPC)Anhui Provincial Committee underlined some major measures to enhance its contribution to Central China's high-quality development.

To improve the quality of opening-up, Anhui authorities at the conference vowed to make full use of the China (Anhui) Pilot Free Trade Zone, which kicked off in September after receiving approval from the State Council, and includes areas from the province's cities of Hefei, Wuhu and Bengbu.

So far, the State Council has given the green light to four of the six provinces in the central region to establish pilot FTZs as part of broader steps to expand the region's opening-up.

"The policies of the pilot FTZs could enable Chery to build up its two-way trade platform to serve more of the province's exporters and importers and help local manufacturers expand further," Wang said.

Tang said Sinotrans Logistics Central China has also been doing more import business via contract logistics services for retailers.

"Living in Hefei, I see that imported products have becoming cheaper and more popular for local consumers," Tang added.