WFIT

Wu-Where? Opportunity Now In China's Inland Cities

Aug 7, 2012
Originally published on August 7, 2012 9:00 pm

China became a majority urban country this year. No nation has shifted so quickly from rural to urban than China, where more than half of the people now live in urban areas.

Everyone is familiar with megacities like Beijing and Shanghai, but they are just a tiny part of China's urbanization story. The country has more than 160 cities with populations of a million or more — places most of the world is only vaguely familiar with, if at all.

One such place is Wuhan, a city of about 10 million people — more than New York City — that lies along the Yangtze River about 750 miles inland by high-speed train from Shanghai.

Today, cities like Wuhan are among China's fastest-growing and home to significant economic activity. Local planning officials estimate Wuhan's economy is growing at about 12.5 percent annually, and that gross domestic product should double in the next five years.

A variety of factors are driving that growth, everything from cheap land prices and low-cost labor to the tremendous demand for infrastructure. Imagine Manhattan without its vast subway system or Chicago without the "L," and you begin to picture the needs of Wuhan.

These days, the city feels like an open construction site as the local government tries to put in its first three subway lines. Many citizens can't wait.

"Developed cities all have subway systems," says Jiang Wei, 29, who was making his way across town one afternoon on Wuhan's lone light-rail line. "Wuhan needs to join the rank of big international cities."

Jiang, who sells construction materials, says the trip he's making this day takes two hours by car, one hour by light rail, and will take even less by subway.

When the underground opens, he says, "I will definitely stop driving."

Morphing Into A Metropolis

Years ago, most rural people in China bypassed inland cities like Wuhan and flooded toward the factory towns along the east coast where the jobs were. But now, central cities like Wuhan have become magnets of their own.

At the foot of a light-rail station, a man named Abdullah from far-western China's Xinjiang region has set up a tent where he sells dates and nuts to commuters.

Abdullah has worked in southern China's bustling Guangdong province, but he says he prefers Wuhan because there is less competition but still lots of customers.

"We grow walnuts, grapes and dates, and they sell very well here," says Abdullah. "Wuhan has lots of money, and it is good for my business. Business in Wuhan is great."

Chinese migrants aren't the only people who have moved here. Foreign businesspeople have as well, and you can find some of them at the Aloha Diner, where the "Texas-size Burger" comes on toasted focaccia and a surfboard hangs over the bar.

The diner is run by Janie Corum, who moved here nearly nine years ago from Hawaii and also heads the local American Chamber of Commerce.

U.S. companies in Wuhan include the giant engine manufacturer Cummins, General Electric and TRW Automotive. According to Corum, they will soon be joined by General Motors.

The French automaker Peugeot-Citroen has two factories in Wuhan. Pfizer has a research and development facility here as well.

China's east coast is no longer a cheap place to do business, so companies are increasingly looking inland to cut costs. Panalpina, a global logistics firm that helps companies move freight by air and sea, moved its China back-office services here several years ago.

"The talent pool and the lower cost in terms of salaries and rent were the two predominant factors," says Beat Rohrer, a Swiss executive with Panalpina who runs the back-office operation. "Wuhan has over 60 universities and roughly 1 million students. We probably operate at one-third of the cost that you would spend in Shanghai."

Urbanization Highlights Possibilities

Yun Peng, 26, moved to Wuhan seven years ago from western China to study. He has a girlfriend and is getting a master's degree in human resources at Central China Normal University. Yun is interning with a head hunter and recently helped Amazon hire about 200 workers for an operations center here. His girlfriend is from Wuhan, and he says he plans to stay.

"I see opportunities in this city," Yun says over lunch with fellow students. "It's urbanized quickly in recent years."

But Wuhan's rapid growth is taking a toll. Earlier this summer, a yellow, post-apocalyptic smog enveloped the city, sparking fears that there had been an industrial accident. Some of Yun's fellow interns want to move to coastal cities where life is better and there's more to do.

Wang Lulu, 21, is applying for jobs near Shanghai. She says people in Wuhan still fight to get on a bus and refuse to give up seats to elderly passengers. She thinks people on China's east coast are more polite.

"There is a lot more greenery there than here in Wuhan," Wang says. "Secondly, the personality of people there is milder. People interact in a more refined and courteous way."

Attracting Shoppers And New Locals

That said, Wuhan does have attractions. The newest is a shopping complex called Han Street, which seems like a cross between a Disney theme park and Las Vegas.

Han Street is lined with faux European architecture, pulsating lights and stretches for several football fields. Foreign brands include everything from Dairy Queen and Zara to Starbucks and the Gap.

Yu Xiaoqin, 24, works as a cashier at a steakhouse here. She thinks Han Street is great.

"Most people came here to see this kind of European architecture," Yu says, "because, before in Wuhan, we didn't have much."

Wuhan's government bulldozed old dormitories for a state-owned machinery factory to make way for Han Street. Many of the people who come here are tourists from China's wealthy east coast.

When Yu took a job here, she nearly doubled her salary to about $320 a month. But a denim dress at the Gap would cost her a week's wages, so she mostly window-shops.

"I like Marks & Spencer," she says, referring to the famed British retailer. "But I rarely buy things from the store. For me, it's expensive."

Han Street is a symbol of the ambitions of central Chinese cities like Wuhan, and the ambitions of the foreign brands that want to tap this emerging market.

But people like Yu are a reminder that most folks in this part of China still don't make that much money, and that — for all its fast-paced growth — Wuhan remains a work in progress.

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AUDIE CORNISH, HOST:

Time again for the NPR Cities Project.

(SOUNDBITE OF THEME SOUNDS)

CORNISH: China became a majority urban country this year. More than half of the people now live in urban areas. There is no country where people have moved from the countryside to the cities more quickly than in China. Here in the U.S., we've often heard about the rapid growth of cities such as Shanghai and Beijing. Today, we go to a place that's not nearly so well known but with more people than New York City.

Here to tell us about this city is NPR's Frank Langfitt. And, Frank, exactly where are you in China?

FRANK LANGFITT, BYLINE: Well, right now, I'm in the downtown area of Wuhan. It's a city of about of 10 million along the Yangtze River. It's about 750 miles inland from Shanghai by train. And to give you sense of the growth of population, if you went back to the '80s, there were may be three-some-million here. Now, were at about 10 million. And these kind of cities here in central and inland China are where the growth is happening in the country today.

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LANGFITT: Right now, I'm looking out on what's going to be one of the city's first subway lines. And if you can imagine New York City or Chicago without a subway or an L, that's kind of what traffic is like right now in Wuhan. And so, there's a big focus on infrastructure and trying to catch up with all this growth.

CORNISH: So, with that kind of population growth, what does that mean for the economy?

LANGFITT: A lot. I mean, I've been working my way around town and I was talking to a planning official. And he said growth here now is averaging about 12.5 percent. And GDP should double in the next five years. And what you're seeing driving in is a mix of things. You have a lot cheaper land here than you do in a place like Shanghai or Beijing, lower wages. And there are also a lot of universities, so there is a better labor pool. And what you're seeing is more Chinese and foreign companies setting up shop here. There's also a growing consumer market that they want to tap.

And so, the key to kind of managing this growth, though, really is the infrastructure, and particularly transportation.

(SOUNDBITE OF TRAFFIC)

LANGFITT: Wuhan has public transport. It's got thousands of taxis. It's got public buses. I just stepped on its light rail and people on the train appreciate it. But they say traffic is still really bad in this town and they're really looking forward to having a subway.

Here's a guy I just talked to named Mr. Jiang.

JIANG WEI: (Foreign language spoken)

LANGFITT: Developed cities all have subway systems, Mr. Jiang says, and Wuhan needs to join the rank of big international cities.

Jiang Wei is 29 and sells construction materials. He says his trip today would take two hours by car. Jiang says he can't wait until the subway opens.

WEI: (Foreign language spoken)

LANGFITT: I'll definitely stop driving and instead take the subway, he says.

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LANGFITT: Wuhan's growth is drawing people from different parts of the country. Right now, I'm standing at the foot of a light rail station and I've just met a man named Abdullah, and he's from western China. And it took him several days to get here by train. And he set up a tent in the rain and he's selling dates and nuts to commuters.

ABDULLAH: (Through Translator) The wage level in my hometown is very low. We grow walnuts, grapes and dates and they sell very well here.

LANGFITT: Abdullah is listening to music from his native Xinjiang autonomous region. He came to Wuhan because there's less competition than on China's bustling east coast, but still lots of customers.

ABDULLAH: (Through Translator) Wuhan has lots of money and it's good for my business. Business in Wuhan is great.

(SOUNDBITE OF MUSIC)

LANGFITT: Chinese migrant workers aren't the only people moving to Wuhan. So are foreign business people. You can find some of them at the Aloha Diner.

JANIE CORUM: My name is Janie Corum.

LANGFITT: Corum moved here from Hawaii nearly nine years ago. She runs a business services company and this diner, where the Texas size burger comes on toasted focaccia and a surfboard hangs over the bar. Corum runs the local American Chamber of Commerce. She says U.S companies here include Cummins, the giant engine manufacturer, and more are on the way.

CORUM: Well, I know General Motors is getting ready to come in but - that's going to be a big operation. TRW just came in. General Electric has a large contingency here in central China, particularly in Wuhan.

LANGFITT: China's east coast is no longer a cheap place to do business, so companies are increasingly looking inland to cut costs. Panalpina is a global logistics firm, which helps companies move freight by air and sea. It moved its China back-office services to Wuhan several years ago.

Beat Rohrer - a Swiss executive who runs that back-office operation - explains why.

BEAT ROHRER: The talent pool and the lower cost in terms of salaries and rent were the two predominant factors. Wuhan has over 60 universities and roughly one million students. We probably operate at about one third of the cost that you would spend in Shanghai.

(SOUNDBITE OF A CONVERSATION)

LANGFITT: I met a few of the city's many students at a Chinese restaurant to see what they make of Wuhan. Yun Peng studies at Central China Normal University. He's interning with a headhunter who recently helped Amazon hire about 200 workers for an operations center here.

Yun came from western China to study. But now he has a local girlfriend and plans to stay.

YUN PENG: (Through translator) I've spent seven years here and now I'm emotionally attached to the place. I also see opportunities in this city, which is very important. It's urbanized quickly in recent years. You can see, and even predict, that there will be more and more opportunities.

LANGFITT: But some of Yun's fellow interns are looking to move on to cities where life is better and there's more to do. Wuhan's rapid growth is taking a toll. In June, a post-apocalyptic smog enveloped the city, sparking fears there'd been an industrial accident.

Wang Lulu is applying for jobs near Shanghai. She says people in Wuhan still fight to get on the bus and refuse to give up seats to elderly passengers. She thinks east coasters are more polite.

WANG LULU: (Through translator) There's a lot more greenery there than here in Wuhan. Secondly, the personality of people there is milder. People interact in a more refined and courteous way.

(SOUNDBITE OF MUSIC)

LANGFITT: When I was talking to the students, they said there are more fun things to do these days in Wuhan. They directed me to a place called Han Street, and here I am. It opened about six months ago. It's a giant shopping street about maybe several football fields long and it's full of faux European architecture and it's loaded with foreign brands. Right now I can see H&M. Down the street is Marks and Spencer. There's a Dairy Queen, a Haagen-Daz, you name it.

I bumped into Yu Xiaoqin. She's a 24-year-old cashier who works at a steakhouse here. She thinks Han Street is great.

YU XIAOQIN: (Through translator) Actually, most people came here to see this kind of European architecture because before in Wuhan, we didn't have much.

LANGFITT: The government here bulldozed old dormitories from a state-owned machine factory to make way for Han Street. Many of the people here, to be honest, seem to be wealthier tourists from the east coast. When Yu took a job here, she nearly doubled her salary to 320 bucks a month, but a denim dress down the street at the Gap would cost her a week's salary, so she mostly window shops.

XIAOQIN: (Through translator) I like Marks and Spencer, but I rarely buy things from the store. For me, it's expensive.

LANGFITT: Han Street's a symbol of the ambitions of central Chinese cities like Wuhan and the ambitions of foreign brands that want to tap this emerging market, but people like Yu are also a reminder that most people in this part of China still don't have that much money. And for all of its fast-paced growth, Wuhan remains a work in progress.

At Han Street in Wuhan, China, this is Frank Langfitt for the NPR Cities Project.

CORNISH: You can follow the Cities Project on Twitter @NPR Cities and you can contribute photos from the heart of your city. Go to NPR.org/NPRCities to learn how. Transcript provided by NPR, Copyright NPR.