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John Kasarda tells us more about the exciting plans to create a dynamic economic zone around Zhengzhou Xinzheng International Airport in China’s Henan Province.

China’s mushrooming air traffic has led to an airport construction boom that in the last five years alone has led to more than $43 billion being invested in modernising and expanding existing airports and building new ones. 

More than $12 billion is being expended in 2016 and this annual amount is expected to grow. Indeed, the Civil Aviation Administration of China (CAAC) reports that 66 new airports will come on line by 2021, including major ones in Beijing, Chengdu, Dalian, Qingdao and Xiamen. 

CAAC also reports that 52 of the mainland’s 206 current commercial airports will receive significant upgrades. 

It would be a mistake, however, to assume that such huge investments are being made solely to meet the nation’s expanding aviation capacity needs as China’s leaders view their airports much more broadly than as air transit infrastructure to move growing volumes of passengers and cargo. 

They also consider them to be industrial magnets and strategic infrastructure to capture 21st century global business. As a result, the nation has fully embraced what it calls the ‘Airport Economy’ model with over 90 airports presently containing or planning some form of airport economic zone.

Zhengzhou’s dynamic zone

The largest and arguably most ambitious of these is the 415 square kilometre Zhengzhou Airport Economy Zone (ZAEZ) being developed on and around Zhengzhou Xinzheng International Airport (CGO), about an hour’s flight from Beijing and Shanghai. 

The ZAEZ represents a pioneering collaborative effort between China’s central government, Henan Province (105 million residents) and Zhengzhou city (9 million residents) to generate economic transformation, global integration, and greater prosperity for the province and its capital city. 

These objectives are being accomplished by establishing an international air logistics hub at CGO, modernising and expanding its passenger and air cargo facilities, and developing surrounding clusters of high-end manufacturing and advanced business service industries. 

Together with integrated surface transportation infrastructure, Western-style education institutions, and new urban centres, an aerotropolis (airport-centred urban economic region) is being created to become a dynamic growth pole for central China’s economic advancement.

In less than six years since being established as a bonded zone and airport city, the ZAEZ has experienced remarkable growth in industrial investment, economic output and trade volumes. 

Leading this growth is Foxconn, the contract manufacturer for Apple’s iPhones. Some 250,000 workers at Foxconn’s immense ZAEZ factory complex produced over 100 million iPhones last year accounting for nearly 80% of all iPhones sold globally. 

Another 16 smartphone manufacturers operating in the zone brought total output in 2015 to nearly 150 million units, making it the world’s largest single site for smartphone production.

Numerous other high-end manufacturers in electronics, information and communications technology, biomedicine, and business services sectors have invested in the ZAEZ. 

In fact since 2013, over 50 industrial projects have been completed, bringing total fixed investment to more than $20 billion in 2016. Value added by large scale industries reached $5.2 billion in 2015 with the zone’s GDP growing at an annual compound rate of 49% during the past five years. 

Combined ZAEZ imports and exports reached $7 billion in 2015, which ranked it second in trade among China’s bonded and free trade zones. 

The vast majority of economic activity to date has been concentrated in a 160 square kilometres Airport District that includes 48 square kilometres of land either at or immediately around the gateway.

The Airport District contains ZAEZ’s bonded zone where Foxconn and other smart phone assemblers are located along with aviation-oriented sectors such as time-critical manufacturing and distribution, aircraft components production and a 1.2 square kilometre cool-chain logistics park that hosts a meat port, fresh flower port and a pharmaceutical/biomedical port. 

The Airport District has attracted German IAS Aircraft Interiors, Mooney Aircraft Manufacturing, and Sino-France General Aviation Aircraft Manufacturing while China Post, DHL, Prologis, TNT-Sinotrans, UPS and SF-Express are among the 50 express carriers, freight forwarders and 3PLs that operate in this district.

Also present are e-commerce firms such as Suning E-Commerce and the Henan cross-border electronic business platform. The B2B Zhoushi International Supply Chain Management Company fills an average of 200,000 orders daily with up to 500,000 orders on peak days.

South of the Airport District is the 155 square kilometre High-End Manufacturing District primarily geared to biomedicine, precision and advanced manufacturing, IT and ICT equipment, R&D and the production of new aerospace equipment materials such as carbon-fibre composites, polymers and ceramics.

A 100 square kilometre Urban Services District, located north of the Airport District, is targeted for modern business services such as aircraft leasing and finance; scientific and knowledge-intensive functions such as software engineering; cultural and leisure facilities; and mixed-used commercial/residential areas with urban amenities for executives, professionals and knowledge-workers.

Facilities in the latter include an international K-12 academy that opened in the autumn of 2015 with a university-like campus, English-language teachers, and curricula based on Silicon Valley schools. 


ZAEZ’s engine

Powering the ZAEZ is Zhengzhou Xinzheng International Airport (CGO), designated as one of eight national Category 1 airports in China. 

Today, CGO serves as the Asia hub for Cargolux Airlines as well as a focus airport for China Southern and Shenzhen Airlines. Its strategic location at the geographic centre
of China’s population provides airlines with the shortest average flight times to major domestic markets, 60% of which can be reached in less than 90 minutes. 

More than 50 airlines currently serve 97 cities from the gateway, the total including 17 international passenger destinations and 27 all-cargo routes.

Both air cargo and passenger growth have been phenomenal in recent years, freight volumes soaring from 85,800 to 403,000 tonnes per annum between 2010 and 2015 while passenger numbers increased from 8.7 million to 17.3 million over the same period.

The figures represent staggering average annual growth rates of 36% for cargo and 15% for passenger traffic.

Indeed, CGO has been China’s fastest-growing cargo airport percentage-wise for each of the last four years and became the nation’s fastest growing passenger airport (percent growth) in 2014. 

The rapid rise of CGO’s cargo and passenger volumes stimulated a $2.7 billion airport infrastructure and facilities expansion programme that began in December 2012 and now is nearing completion. 

It has added a new 360,000sqm Terminal 2, second runway and 500,000 square feet of cargo facilities. The new terminal, opened in December 2015, boasts 71 passenger aircraft parking bays and nine dedicated freighter bays. 

These additions bring Zhengzhou Xinzheng International Airport’s annual passenger capacity to 29 million and its cargo capacity to 600,000 tonnes.

The upgrade also involves the addition of a new 283,000sqm multi-modal ground transportation centre integrated with T2. 

Set to open later this year, it will have transit and parking areas for buses and taxis and underground halls for subways and high-speed intercity trains converging on CGO. The arrival of the latter is expected to significantly extend the airport’s catchment area.

The long-term airport master plan (through 2040) shows CGO with five runways, one of which will be dedicated to air cargo, four passenger terminals and additional cargo facilities. This will expand the airport’s passenger capacity to 70 million annually and cargo to over three million metric tons annually.

A modernising and expanding CGO powering the ZAEZ provides concrete testimony that well-designed and well-supported airports can drive remarkable economic development. 

But such outcomes require more than a ‘build it and they will come’ approach. Development as represented by the ZAEZ also requires systematic integration of airport planning, surface transportation planning, business site planning, and urban planning reinforced by strong and enduring commitments by all levels of government.


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