Huizhou: Set for an upgrade

With forests, beaches and traditional villages, Huizhou has big potential in tourism. The city is also aiming to ride the tech-upgrade momentum created by the GBA masterplan. Here is a deeper dive into one of the Bay’s more spacious municipalities.

Huizhou, the easternmost city of the Greater Bay Area, is a big place. It could fit Shenzhen, Dongguan and most of central Guangzhou into its borders. It’s only 70% urban, which might sound like a lot for a municipality in the English countryside, but in China, that’s nothing to brag about. And if you look at its satellite image, you realize that 70% number counts only for inhabitable land – much of the space is mountainous.

Indeed, Huizhou doesn’t feel like much of a city outside of the main CBD district. With just 4.83 million people spread out across the municipality, it’s no wonder people call this place Shenzhen’s backyard. It the GBA’s most “green” city, with plenty of forested areas and a coastline longer than Singapore’s (at 281.4km, to be precise).

It’s a great destination for a weekend getaway. Xunliao Bay, in particular, with its Double Moon Bay, has some classy hotels, as does Daya Bay – which is one of the reasons real estate has shot up here in recent years.

Map: Huizhou in the Greater Bay Area (Source: Google Maps)

Huizhou is not much like Shenzhen and Dongguan. Although the city has an industrial structure with a similar weighting between agriculture, manufacturing, and services, its growth during the Reform and Opening era has been nowhere near as fast as its two more urbanized neighbors. And it has clearly been getting left behind in recent years as those two hi-tech stars have been vaulting up the value-added scale.

The past five years have not been easy for Huizhou. A deteriorating external trade environment saw exports fall 1.1% and imports down 4.8% last year. Foreign investment also took a knock, down 8.1%. Little surprise, then, that its GDP grew by 6.01%, well below the provincial average.

Huizhou in Numbers (2018)

  • RMB410.3 billion in GDP, +6.01%
  • Per capita GDP RMB 85,418, + 6.48%
  • Industrial output
    • Agriculture and mining: RMB 17.6 billion, + 3.61%
    • Manufacturing: RMB 216.2 billion, + 6.01%
    • Services: RMB 176.6 billion, + 6.21%
  • Fixed-asset investment: +3.1%
  • Exports: RMB 220.9 billion, -1.1%
  • Imports: RMB 112.6 billion, -4.8%
  • Utilized foreign investment: US$920 million, -8.1%
  • Population: 4.83 million in 2018

This is not to call Huizhou a slouch. There are many places that would like to have +6% growth. But in a region of relentlessly driven devotees to an industrial-upgrade mantra, more is being expected of the “backyard”. Like everywhere else, railway lines are being laid across here at a frenetic pace, connecting Huizhou more closely to the rest of the GBA in the hopes of pulling it tightly into the 2035 masterplan.

Hopes are running high that this year will mark a turnaround. With the release of the GBA masterplan in February, the city’s path has been laid out clearly: it will accelerate its integration with Shenzhen and Dongguan, to form a new urban cluster that can more effectively upgrade its manufacturing base.

Policymaking is getting more ambitious, starting with tax cuts and incentives for the private sector, which has been lagging here. It appears to be having an effect, as the private sector saw both its output and trade numbers shoot up recently. Private-sector output in the first half accounted for 45.5% of the city’s GDP, while foreign trade by private companies jumped 40.9% to RMB19 billion in the first half. Although that is tiny compared with Shenzhen and Dongguan, and just 13.8% of total trade, it’s an encouraging indicator of progress.

Huizhou has a lot going for it. Its natural resources can be better exploited to develop a more valuable tourism industry, while its manufacturing industry is ripe for upgrade, especially as neighboring Shenzhen and Dongguan are running out of space. Once a bastion of labor-intensive, low-margin industries such as footwear, now the focus is on electronics, vehicle production, oil and chemical production, and clean energy. Moreover, Huizhou has a big magnet for heavy industry. The Daya Bay Oil and Chemical Industrial Zone is one of the top 20 chemical industrial parks in China, producing 22 million tons of oil and 2.2 million tons of ethylene each year. It is continuing to grow, attracting some major investments.

Tourism potential

Huizhou has some stunning natural scenery. A long, beautiful coastline, mountains and forests have already attracted global and local hotel chains to set down roots here. There is also a strong cultural heritage, deeply impacted by large Hakka communities, reflected in the local architecture and food.

Walking around here, reminders of a famous Song dynasty scholar, Su Dongpo, or Su Shi, are everywhere in the names of streets, buildings, parks, malls and restaurants. The best-known local delicacy is “Huizhou braised Dongpo pork”, which was apparently created by the scholar, more than 900 years ago. It is basically fat pork tenderloin and Huizhou’s traditional Meicai, a traditional type of pickled vegetable with sweet and salty flavor. Meicai is also an essential ingredient of Hakka Chicken.

No fewer than 10 villages in the surrounding countryside have been recognized as national-level traditional villages, with special features of Hakka and Lingnan style houses dated to the Ming and Qing dynasties. The city has planned a historical area to restore its old city center surrounding the “West Lake”, named after the famous West Lake in Hangzhou. Both are national 5A-level tourism destinations. The city now has 99 scenic spots, which includes 31 national A-level tourism destinations, generating RMB21.4 billion in the first half, up 13.8%.

The Shenzhen-Dongguan-Huizhou Megalopolis

Three high-speed railways and two inter-city railways are planned for the city. It is currently served by a bullet train running along the coastline, between Shenzhen and Xiamen, in Fujian. This whisks passengers from Huizhou South Railway Station to Shenzhen North Railway Station in 30 minutes, running at up to 350km/h. (Shenzhen North connects to Kowloon West in Hong Kong. Get tickets at trip.com). But it only serves the southern part of Huizhou.

The Xiamen-Shenzhen bullet train currently serves only the coastal areas. Source: Apple Daily

Two other high-speed railways are under construction: the Ganzhou-Shenzhen Line and the Guangzhou-Shantou Line. Both are planned to run at speeds up to 350km/h, and will be online in 2021. They will have stations situated in Huizhou’s key industrial areas: Boluo North, Huizhou North, Huicheng South, Huidong South, Luo Fu Shan, and Zhongkai, home to the city’s biggest Hi-tech Zone. They will connect Huizhou more quickly to not only Shenzhen, but the western side of the GBA and the rest of the country to the north and east.

Huizhou is the center of three national hi-speed railway lines.

The other two railways are Intercity lines, running to Dongguan and Shenzhen. They will have slower trains (160km/h) but more stops.

Dongguan-Huizhou intercity railway

Huizhou also has an airport, which has recently opened a new terminal and is seeing booming traffic. Located in the Huiyang District, the Huizhou Pingtan Airport has flights to 31 cities, including newly-added flights to the northeast and eastern areas of China. It served 1.23 million passengers in the first half, up 44.4% compared with last year. The Huizhou airport is also an important logistic center that shipped nearly 4000 tons of freight in the first half, up 66.7%.

The airport is undergoing expansion and renovation, and it is planned as a complementary airport for Shenzhen Bao’an International Airport in the GBA masterplan. Line 14 of Shenzhen metro is likely to be extended to the Huiyang district in the future which will allow passengers to get to the east of Shenzhen more conveniently.

Key industrial projects

Huizhou is envisaged to become a smart manufacturing base integrated with Shenzhen and Dongguan. The city now has two national-level and six provincial-level development zones, as well as cooperation projects with other countries. The biggest are as follows:

1)Daya Bay Economic and Technological Development Zone

Located in the south, nestled against Shenzhen’s Pingshan New District to the west, this is the key marine industrial zone in Huizhou. The marine industry is the backbone of Huizhou’s economy, accounting for more than 30% of GDP last year at RMB133 billion.

Launched in 1993, the national-level Daya Bay Development Zone is the only petrochemical industrial base at the east side of the GBA and is the No.1 chemical industrial park in China. With 90% of its investment coming from Fortune 500 companies and large state-owned companies, Daya Bay currently has 89 major projects, including a USD10 billion project from ExxonMobil and a USD7 billion project from CNOOC and Shell Petrochemicals Company. These large investment projects boosted GDP with an annual growth of 18.3% last year, ranking first in the seven regions in Huizhou. Daya Bay’s GDP reached RMB60 billion for the first time last year at RMB68.57 billion, ranking the second after the Huicheng district.

Map: Location of the Daya Bay Development Zone

Large-scale investment was first introduced here in 2002, when CNOOC and Shell put USD4.35 billion into a petrochemical project. It is also one of the “Green industrial parks” in China with a sustainable economic chain and is China’s first emergency center for dangerous chemicals.

It isn’t only petrochemicals being developed here. Tourism, transportation and a modern fishing industry are all key goals for Daya Bay, while five new industries are being introduced: IT, industrial equipment, new energy, modern service and cultural industry.

Daya Bay is home to Huizhou’s first wind-power plant. On the sea area near the Nianping Peninsula, three 80-meter wind turbines were built in four years. With an investment of RMB8.25 billion, the construction of the in-land operation center kicked off last December, which is expected to generate nearly 1000GWh of electricity per year.

Tourism projects will link with Hong Kong and other bays and islands in the area. The Nianping Peninsula is a key focus, not only for tourism, but also as a tech island, with a series of major tech project planned here, including two major projects from the Chinese Academy of Sciences. A nuclear electric power project, the Guangdong Taipingling Nuclear Power Station was approved to be constructed this year, but it has been delayed due to concerns about environmental impact.

Daya Bay recently welcomed a new headquarters investment from the HC Group, a Hong Kong-listed e-commerce giant. The company will move from Beijing to the Daya Bay with an investment of RMB15 billion to build an integrated IT industrial harbor with a cluster of industrial Internet companies.

2) China-South Korea Industrial Park / Tonghu Ecological Smart Zone

Huizhou has high hopes for its electronics and IT industry, aiming for an output of RMB1 trillion from each in the coming years. Plans are centered on the Zhongkai Hi-tech Development Zone.

Located at the border of Shenzhen, Dongguan and Huzihou, the Zhongkai Hi-tech Development Zone had the fourth largest GDP among the seven regions in Huizhou at RMB63.1 billion last year. However, it had the lowest growth rate at 2.1%, largely due to a slowdown in exports, which had a knock-on effect on investment.

City leaders are on it. The GBA masterplan could not have come at a better time, spurring plans for technological innovation. The city government is stepping up ambitiously, with efforts to establish incubators and collaboration platforms.

Find out more about Zhongkai on its official website.

The Tonghu Ecological Smart Zone is one of the key projects in the zone. It is the primary project of the China-South Korea Huizhou Industrial Park. Listed in Guangdong’s three-year plan for GBA development, the smart zone has industrial parks, innovation centers and supplementary living facilities. The Phase 1 project, the Tonghu Tech Town, was launched last September.

The project’s cornerstone investors are US networking hardware giant Cisco and Foshan-based property developer County Garden, which is investing heavily in tech diversification, especially robotics. The park has already attracted 27 companies, including eight listed companies and 11 national hi-tech companies. Cisco and Country Garden have more ambitious plans. It is expected that the tech town will be established as a world-level IoT and smart control base in eight years, attracting more than 1,600 enterprises and 150,000 hi-tech talents.

A Big Data industrial base is expected to be launched in the tech town next year with a total investment of RMB1 billion. For Hong Kong and Macau talents, a RMB2 billion industrial fund was set up, granting rental-exemption, transportation subsidies, and competition rewards for start-ups from the two SARs in the first three years.

The China-South Korea collaboration platform is building a tech park at the east area of the Tonghu Smart Zone, focusing on modern industries like semiconductors, chips, high-end electronic information, intelligent manufacturing, new energy, and new materials. It has introduced 13 industrial projects with a total investment of RMB7.91 billion, including six foreign-invested projects. Other 53 potential projects are being discussed, including nine projects invested by South Korea investors.

How quickly will all these plans bring Huizhou up to speed with the rest of the Greater Bay? That remains to be seen. But at the moment, there appears to be a lot of momentum in its favor. We will check back in later.

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