Industrial agglomeration attracts more foreign investment in Central China

ZHENGZHOU -- An industrial waste recycling facility funded by the German company Befesa has started operation, another foreign-funded project in Central China's Henan province.

Located in the Changge circular economy industrial park in the city of Xuchang, the 350-million-yuan ($50.8-million) project will recycle and process 110,000 tonnes of de-dusting ash generated from steel refining every year, from which 40,000 tonnes of zinc oxide will be extracted. The annual sales revenue is expected to reach 400 million yuan.

"Befesa Zinc Henan not only plays a key role in the future growth of Befesa but also contributes to the development of environmental protection in middle and northern China by recycling hazardous waste from the steel industry and recovering the valuables materials from it," said Javier Molina Montes, executive chair of Befesa.

Under China's initiative to develop the central and western parts of the country in recent years, many industries have moved from the eastern coastal area to these regions. The industrial agglomeration effect is therefore emerging, with the industrial chains extended and more foreign businesses attracted.

Data from the Henan Provincial Department of Commerce show that in 2022, the foreign investment in actual use reached $1.78 billion in the province, up 118.2 percent over the previous year.

In the city of Luohe, known for its food industry, 24 foreign-funded food companies have been established.

Cargill Food (Luohe) Co Ltd, an ingredient supplier of Swire Coca-Cola, is just a wall away from Swire Coca-Cola.

"With a pipeline built to transport our product to Swire Coca-Cola, we can save a large amount of money in transportation," said Zhang Xiaobin, a manager in charge of production with the Cargill Food (Luohe) Co Ltd.

At Kaifeng Zhucheng Wiring Systems Co Ltd, a Sino-Japanese joint venture in the city of Kaifeng, workers are busy producing integrated wiring harnesses for automobiles.

Tian Ming, a manager with the company, said the labor surplus in Henan was an advantage for the labor-intensive assembly in the past. But now, with the upgrading for intelligent manufacturing, the longer industrial chain keeps them investing.

New energy vehicle producers such as BYD, which has invested in a factory in the provincial capital Zhengzhou, are all potential partners, he added.

Local government has also stepped up efforts to serve foreign-funded projects, providing "one-stop" services. Earlier this year, the provincial department of commerce set up four industrial parks for international cooperation, such as the Henan Sino-German (Xuchang) International Cooperation Industrial Park, to attract more foreign investment.

Sun Jinglin, deputy head of the provincial department of commerce, said establishing international cooperation parks is important in expanding the opening-up of the inland areas.

"As related industries continue to move to the central and western regions, the industrial agglomeration effect of these regions is gradually emerging," said Sun.