Zhengzhou City in China’s Henan Province will help Foxconn Technology Group (富士康科技集團) recruit more than 100,000 workers next year for its local factory, matching the number it helped the maker of Apple Inc iPhones and iPads hire this year.
Zhengzhou has a large workforce, with labor costs that are about two-thirds those in China’s coastal cities, Zhengzhou Deputy Mayor Xue Yunwei (薛雲偉) said in an interview. That has given the city an advantage in luring manufacturing investment, he said.
“You can not find entry-level workers in Shanghai offering a monthly salary of only 1,500 yuan [US$237],” Xue said in Beijing on Thursday. “But we can.”
Efforts to encourage companies including Foxconn, Intel Corp and Ford Motor Co to invest in the Chinese hinterland rather than move production to nations such as Vietnam and Bangladesh as wages rise in China’s coastal areas could help to sustain economic growth that has averaged 10 percent annually over the last three decades. In addition to helping find workers, authorities are offering reduced tax rates and provide preferential access to land to attract companies.
Zhengzhou’s economy could grow 13 percent this year and stay in double-digits for the “next few years,” Xue said. The national economy is set to grow 9.2 percent this year and 8.5 percent next year, according to the median of 15 economists surveyed by Bloomberg.
Foxconn, which began exporting goods from its Zhengzhou factory in August, has been a major factor behind the city’s growth, Xue said. Zhengzhou’s exports and imports combined would exceed US$15 billion this year, triple the level of last year, he said.
Foreign direct investment in the city, with a population of more than 8 million, grew 43 percent in the first 11 months of this year, Xue said.
Zhengzhou City Government has encouraged some of the more than 21 million people from Henan Province working in other parts of China to return home. The government has also arranged for students from 40 universities and more than 100 technical-training high schools in the province to do internships at the plants in the city, he said.
The average annual salary of an urban manufacturing worker at private companies in Guangdong Province was 21,644 yuan last year, compared with 15,495 yuan in Henan Province, according to government data.
“Nobody was available to meet with us three to five years ago when we wanted to persuade them to do business here,” Xue said. “But now, all kinds of foreign and domestic companies visit us every week.”
The city also wants to spend as much as 30 billion yuan over the next decade to expand its airport to accommodate more cargo transport, Xue said. Approval has already been given for plans to start building a second runway at Zhengzhou’s airport next month, he said.
The local government has not taken on much debt to make these investments, Xue said. Zhengzhou plans to merge about 10 companies set up by the city to finance projects into three larger entities, each with assets in the tens of billions of yuan, he said. These three companies will then invest in selected industries, infrastructure projects and property development, he said.
Xue said the city government wanted to turn Zhengzhou an industrial base, a transportation hub and a large metropolis.
“That is our vision,” he said.