By Zhang Yan

Shandong Embarks on New Journey Of Promoting Development Through Opening-up

By Zhang Yan

The Qianwan Free Trade Port Zone is playing a vital role in Qingdao’s opening-up.

In recent years, Shandong, a coastal province in eastern China, has seen steady growth of exports to the US, South Korea, Australia and other countries along the Belt and Road region. Its foreign trade brought new types of business when it signed a cooperation agreement on cross-border e-commerce construction with Alibaba, China’s e-commerce giant. The Shandong Electric Power Construction Corporation III has also officially entered into a contract on equipment procurement for a coalfired emergency power station project with Pakistan.

Meanwhile, Barzan, the world’s biggest container ship, has docked at Qianwan Port in Qingdao. These recent events are all examples of Shandong’s opening-up to the world. Now, this open-minded province is taking on a new look of prosperous development.

All-Round Opening-up Pattern

To promote reform and development through opening-up has turned out to be one of China’s most successful policy initiatives. The 5th Plenary Session of the 18th Communist Party of China (CPC) Central Committee put forward the idea of “innovative, coordinated, green, open and shared development”, and the 13th Five-Year Plan clearly brings forward the strategy of “building a new pattern of all-round opening-up”. Over the course of the past few years, Shandong has actively responded to the country’s opening-up policy, improving innovation, reform and development by enhancing opening-up based on unique regional advantages.

“According to the 13th Five-Year Plan for Economic and SocialDevelopment of Shandong, the province will carry out a new round of high-level opening-up, allowing it to create a facilitated, legalized and globalized environment, accelerate the building of a new open economic system, take better advantage of the two markets and resources, and promote innovation, reform and development through allround and wide-ranging opening-up during the 13th Five-Year Plan Period,”said Wang Shinong, deputy director of the Publicity Department of the Shandong Provincial Party Committee.“To that end, we will positively respond to the country’s opening-up policy, encourage coastal and important node cities to play their part based on our unique regional advantages, actively involve ourselves in the development of the Belt and Road Initiative, and create a new standard of openness in the coastal area.”

Over the course of the past several years, Shandong has proven itself to be one of China’s most open-minded provinces.

“Shandong has vigorously promoted opening-up, and its economic and social development has improved significantly,” explained Yan Zhaowan, deputy director-general of the Department of Commerce of Shandong Province.“Through foreign trade, a large number of local enterprises and goods have gone global, and the import of advanced technical equipment, energy and materials in large quantities has also provided strong material and technical support for the province’s manufacturing transformation and upgrading. Shandong has attracted US$170 billion of capital in total and brought in advanced technologies, management philosophies and talent. In strengthening cooperation in free trade areas, it has utilized its advantages in the China-Japan-South Korea Free Trade Zone. Weihai, an FTA demonstration area for economic cooperation, has been included in the China-South Korea FTA. The China-South Korea (Yantai) Industrial Park has also been incorporated into the framework of the China-South Korea Free Trade Zone.Therefore, Shandong has established its strategic leading position in the China-Japan-South Korea Free Trade Zone.”

In the meantime, as a city with an abundant labor force, Shandong has embraced an open approach and taken full advantage of markets and resources to attract talent from both home and abroad and strongly promote the replacement of old growth drivers with new ones.

“Shandong has carried out a more open and efficient talent policy and created new policy advantages to draw overseas talent to start businesses and innovate here,” said Li Boping, an inspector from the Shandong Provincial Department of Human Resources and Social Security. “By seizing the opportunity of talent flow caused by the global economic slowdown, we should adapt to the law of ‘two-way flow’, and introduce overseas elites in a more positive, active and open way. Meanwhile, we also need to promote the cultivation of local talent and improve their international quality to add new impetus for Shandong to build a well-of f society in an all-round way.”

By seizing the opportunity of talent flow caused by the global economic slowdown, we should adapt to the law of ‘two-way flow’, and introduce overseas elites in a more positive, active and open way.

Key Industries Geared to International Standards

One of China’s most innovative high-tech zones is in Jinan, the capital of Shandong Province. The city is home to one of China’s four oldest software parks. Nearly 70 percent of Shandong’s soThware enterprises are concentrated in Jinan, and over 90 percent of them are located in the Qilu Software Park. By the end of 2015, the park had attracted 95,000 soThware professionals from more than 1,750 companies whose revenues reached a combined 108 billion yuan (US$15.5 billion).

Jinan is China’s second most famous and officially branded software city after Nanjing. As the heart of the software industry in Shandong, or even in East China, the park is mainly engaged in internet applications, software development and information services, as well as semiconductor and integrated circuits and smart manufacturing. It is also the only demonstration base for the communication of Chinese and Japanese IT bridge engineers. Retired Japanese engineers and experts are hired to the park and provide higher-level technical support for the enterprises on a regular basis.

In the future, the park will march abroad, carrying out R&D with overseas help, and build the Jinan-Europe Incubation Center for Industry Cooperation in Stuttgart, Germany. The center will become an overseas junction for Jinan to attract business and investment, as well as shorten the distance between local enterprises and their European counterparts so the two sides can cooperate more ef ficiently.

“Through over 20 years of development, Jinan’s New and High-tech Industrial Development Zone which has been in the vanguard of reform and opening-up, has achieved new results and status,” said Zhao Yongyan, director of the Zone’s Emerging Service Industry Development Center. “Our development center was set up as a new force to attract investment, which is a big move in the mechanism reform of the zone. We aim to seize major opportunities in emerging service industry development and put it on track for rapid growth. Next, we will build a smart high-tech zone in the internet-plus mode, a new platform with high-tech features to attract business and investment, an intelligent public service platform and an intelligent community platform based on the emerging service industry development of the zone. In this way, industry development can be fully promoted to a new level.”

At the Weichai Science and Technology Exhibition in Weifang lie a large number of generators of differ-ent models and functions. Weichai is home to many national product testing centers. It also has R&D centers in the US, Europe and some cities in China including Weifang, Shanghai, Chongqing, Yangzhou and Xi’an, which ensures that it can always keep up with the world’s cutting-edge technologies.

Top left: Qingdao Robot Industrial Park, Shandong Province.

Bottom left: A Formula One car equipped with an engine developed by Weichai Power on display at the Weichai Science and Technology Exhibition in Weifang, Shandong Province.

Bottom right: The assembly line at the Foton Motor plant in Weifang, Shandong Province.

A worker busy ironing a shirt at Qingdao Jieshen Laundry, Shandong Province.

Based on its globally advanced R&D platforms, the company has undertaken 22 “State 863 Projects”, technology research programs, international cooperation plans and key scientific and technological projects. It has received 1,473 product and technical patents, and has taken charge of and participated in the formulation of 45 national and industry standards. Its products have all reached high international standards in terms of economic efficiency, reliability, environmental friendliness and other criteria.

“In the past few years, Weichai has stepped up the pace of opening-up and expanding the overseas market,” said Xu Xinyu, CEO of Weichai Power. “The company’s cross-border merger and acquisition of France’s Baudouin, strategic restructuring of Italy’s Faraday, and overseas investment in Germany’s Kion and Linde Hydraulics are vividly called its ‘trilogy’ of overseas expansion in the new era. Weichai is not only broadening the domestic market, but is also actively involved in global competition and striding towards internationalization. It has 243 maintenance service stations abroad, and its products are sold to over 110 countries and regions including Russia, Iran, Saudi Arabia, Vietnam, Indonesia and Brazil. Currently, besides core technology resources, the company has accumulated valuable experience in managing international enterprises and completed the transition from domestic to global expansion.”

As a model in the national bus industry, Zhongtong Bus Holding Co., Ltd. has gained the attention of the world by providing services with leading technologies for the 2008 Beijing Olympic Games, the 11th National Games of China, the Xi’an International Horticultural Expo, the Sochi 2014 Winter Olympics and other important international events. Meanwhile, this time-honored state-owned enterprise is also committed to innovation and development in the face of China’s new economic situation. With advanced production technologies introduced from Europe, it has developed a series of coaches that hold a leading position in the domestic market. Nowadays, ithas become a transformation model in the supply-side reform of China’s auto industry.

“Zhongtong Bus generated a sales revenue of nearly 800 million yuan (US$115 million) from exporting over 2,000 buses in 2015 alone,” explained Sun Qingmin, general manager of the company. “Its buses are sold to more than 90 countries and regions in South America, Africa, Southeast Asia, the Middle East, Central Asia, Europe and North America. In recent years, we have accelerated the pace of marching abroad and made full use of the two markets and resources in the innovative development. We will promote our national brand while sticking to independent innovation. ”

Cross-Border Platform

“Qingdao is a forerunner in Shandong’s opening-up, and the Qianwan Free Trade Port Zone is undoubtedly in the vanguard of Qingdao’s opening-up,” said Li Suman, deputy secretary of the Work Committee and deputy director of the Management Committee of the Qingdao Qianwan Free Trade Port Zone. “To closely follow the national strategy, Qianwan Port has grabbed strategic development opportunities in the Belt and Road area and the China-South Korea Free Trade Zone based on its regional advantages. In addition, it has strengthened strategic cooperation with South Korea, Indonesia, Kazakhstan and other countries in free trade zones, and built eight functional areas and dry ports across the province by utilizing its local advantages.This has laid a solid foundation for pilot free trade zones to share their results and experiences. In the internet-plus development mode, the Qianwan Free Trade Port Zone has seized opportunites and created the mode of ‘dollar listing, bonded trading’ for bulk commodity transactions in the country. In addition, Chinalink Express’s cross-border trade service platform, HTCHE’s e-commerce platform and Shandong’s first B2B cross-border e-commerce public service platform are all open for use. On June 6, 2016, the port zone first carried out the bonded stocking business for cross-border e-commerce in Shandong, which can facilitate the building of Qingdao’s comprehensive pilot area for cross-border e-commerce.

With distinct geographical and policy advantages, the Qingdao Qianwan Free Trade Port Zone has devoted itself to improving China-South Korea economic relations and trade cooperation. On July 31, 2014, under joint e ff orts from the port zone and China Certification and Inspection Group’s South Korea o ffice, South Korea’s first SsangYong test vehicle arrived at the Qingdao Import Port of Assembled Vehicles. On June 1 of the following year, the Alcohol and Food Testing Laboratory of the Qingdao Qianwan Free Trade Port Zone o fficially passed certification of South Korea’s Ministry of Food and Drug Safety, acquiring quali fication as an overseas inspection agency from South Korea. On Dec. 20, the China-South Korea FTA officially came into force, which means the policy has opened the door to economic cooperation between the two sides.

Feng Yongbin, director of the Culture Promotion Center for the Qingdao Qianwan Free Trade Port Zone, is excited by this kind of vehicle trade.

“The import of assembled vehicles in the free trade port zone makes it China’s second largest port for parallel auto import, ranked just below Tianjin’s,” Feng said. “In 2015, the port imported 15,512 automobiles, a 157 percent increase yearon-year. In 2016, such imports have risen even further. From January to May, the number of imported vehicles reached 9,111 with year-on-year growth of 186 percent. The Qianwan Free Trade Port Zone now houses over 350 auto enterprises. Their businesses cover global trade, trade shows, logistics, transportation, proxy service, modification tests, after-sale services and other areas. The momentum of auto industry clustering has taken initial shape.”

Railways have been built in the Zibo Bonded Logistics Center, and boxes of goods are delivered one after another by rail. Peng Rongjun, the chairman of Fushan Group, which is located in the Zibo High-Tech Zone, said the international orientation of the zone is what makes it special.

“More than 200 enterprises in the center have carried out related businesses, in which over 20 countries and regions, including France, Greece, New Zealand, Australia, South Korea and a number of Southeast Asian countries have been involved. The domestic flow of goods totals 3.056 billion yuan (US$430 million), and the goods are mainly additives, household appliances, auto parts, dye, electronic components, drinks and olive oil. “

Currently, the Zibo Bonded Logistics Center is preparing to operate China Railway Express trains to respond to the Belt and Road Initiative and meet the need for superior product transshipment from Shandong. Initially, it plans to run two express trains every month, and then gradually increase the departure frequency to one express train per week.

The smooth operation of the center not only facilitates the prosperous development of traditional foreign economy and trade in Shandong and drives the transformation and upgrading of processing trade, but it also enhances the comprehensive competitiveness of an import- and export-oriented economy. It also implements modern logistics capabilities. This will exert a profound influence on a new round of opening-up.

“It will not only bring low cost and fast logistics as well as more information to enterprises, but will also form a regional development pattern for the modern service industry with simplified customs procedures and impressive logistics platforms,” Peng added.

The Qianwan Free Trade Port Zone now houses over 350 auto enterprises. Their businesses cover global trade, trade shows, logistics, transportation, proxy service, modification tests, after-sale services and other areas.