Petrol and phones

HUIZHOU: Two 1.2-million-ton capacity petroleum refining projects in this east Pearl River Delta city next year will increase the city's total refining petroleum capacity to 2.4 million tons, the biggest in Guangdong province, Huizhou Mayor Li Ruqiu says.

China National Offshore Oil Corp (CNOOC) expects one refinery in Huizhou's Daya Bay to open in October and construction of the second will begin next year, says Li.

"We have reserved 5 sq km for future petrochemical projects," Li says. "We will become the most important base for the petrochemical industry in the province."

With $4.3 billion already invested in a CNOOC-Shell Nanhai petrochemicals joint-venture project that went into production in 2006, Li predicts the city's petrochemical projects will earn more than 100 billion yuan in 2010, meaning a significant boost for the city's GDP.

The petrochemical industry is known as a heavy polluter, but the mayor says the city and CNOOC have "carried out many environmentally friendly methods to keep the plants clean" and also located the facilities in Daya Bay, far from Huizhou's downtown.

Another key group in Huizhou is the digital industry. Top firms such as electronic appliance giant TCL Corp and others including Desay and Foryoung, are significant players.

Before Huizhou became a city in 1988, it was a small agricultural township. But it has become the world's largest production base of batteries, Asia's biggest base of telephone and computer motherboards and China's biggest base for television sets, hi-fi systems, and cameras.

The city exported 6.12 million cellphones in the first three months this year, up 225 percent from the same period last year, according to the city's exit-entry inspection and quarantine bureau.

Huizhou's exported cellphones account for 15 percent of China's total.

The city has nine cellphone manufacturing plants that focus on exporting, while only five existed there last year.

The bureau says Huizhou's phones were exported to 50 countries in the first quarter this year, and South Korea is the biggest market.

However, most of Huizhou's exported phones are original equipment manufacturing (OEM) products and Huizhou's own brands, such as TCL, have not had a significant impact on the global market yet. While it's a problem for Huizhou's cellphone industry's development, it also encourages entrepreneurs to develop their own brands.

Huizhou's GDP last year was 108.5 billion yuan, ranking sixth in the province and following Guangzhou, Shenzhen, Foshan, Dongguan and Zhongshan.

"We are confident we will be in the top five within two years," Li says. "The GDP is expected to achieve 180 billion in 2010."

Li said the petrochemical and digital industries will be the city's core industries.

Though the Pearl River Delta eager to change its economic focus to technology-intensive, Li says Huizhou's economy has been on the technology-intensive development track for a long time.

"We don't have the problem of changing our economic model," Li says.

(China Daily 04/21/2008 page10)