Changsha - Economy

Economy

Changsha's population nearly tripled between the start of its rebuilding in 1949 and the early 1980s. The city is now a major port, handling rice, cotton, timber, and livestock, and is also a collection and distribution point on the railway from Hankou to Guangzhou. It is a centre of rice milling and also has oil-extraction, tea- and tobacco-curing, and meat-processing plants. Its textile industry produces cotton yarn and fabrics and engages in dyeing and printing. Agricultural chemicals and fertilizers, farm implements, and pumping machinery are also produced.

Changsha has a large thermal generating station linked by a power grid with the nearby industrial centres of Zhuzhou and Xiangtan; the three cities were designated in the 1970s as the nucleus of a major industrial complex. In the 1960s there was some development of heavy industry. The manufacture of machinery, especially machine tools and precision tools, became important, and Changsha became a center of China's aluminum industry. The city also has cement, rubber, ceramic, and papermaking plants and is a centre for many types of traditional handicrafts, producing hsiang embroidery, leather goods, umbrellas, and buttons. Coal is mined in the vicinity.

Changsha is one of China's 20 most "economically advanced" cities. In 2008, Changsha's nominal GDP was ¥300.1 billion (US$43 billion), a year-on-year growth of 15.1% from the previous year. Its per capita GDP was ¥45,765 (US$6,589). Its GDP grew at an average of 14% per year from 2001 to 2005, compared to the national average of 9% in the period. As of 2005, the service sector generated roughly around 49% Changsha's GDP, up 112% from 2001 figures, and it is expected to continue driving the city's economic growth. Leading to a disposable income for urban residents of 12,343 RMB annually. The manufacturing and construction sectors have grown relatively steadily, growing 116% during 2001-2005. The primary sector, including agriculture, forestry, animal husbandry, and fishery, has grown slightly over this same period. In addition, the consumer market has grown dramatically with income levels. With a minimum salary level of 600 RMB per month in comparison to Beijing 640 RMB or Shanghai at 750 RMB per month. Urban residents in 2005 had average income of about USD 1,500, 15% higher than national average, and up 10% from 2001 figures.

Changsha has attracted a substantial level of foreign investment. In 2005, for example, nearly USD 1 billion worth of foreign direct investment (FDI) poured into the city, mainly in hi-tech, manufacturing, food production, and services. This figure is up 40% from 2001. 59% of the total FDI has come from Hong Kong, South Korea, Singapore, and Japan; 28% has come from the Americas and 9% from Europe. By the end of 2008 more than 500 foreign companies had made over USD 10 million worth of investments in Changsha. Changsha had total retail sales of 74 RMB billion in 2006.

Rapid economic growth has made environmental pollution a serious problem in Changsha, caused by rapidly increasing numbers of private cars, widespread construction sites, and numerous industrial facilities on the outskirts of the city.