Archive for the 'Industrial Zone' Category

The original saying was: ‘Better to have a bed in Puxi than a house in Pudong.’ That has now changed.

A taxi driver said, ‘Nobody wanted to go to Pudong about 20 years ago. Pudong used to be farm land and the only mode of transport for people going from Puxi to Pudong was the ferry.’

Pudong is now the future of the metropolis being pushed forward by projects like the Waigaoqiao Free Trade Zone.

Against the backdrop of the Oriental Pearl Tower, this the a scene of a new development under way in the Lujiazui financial centre in Pudong, Shanghai.

On April 18, 1990, the Chinese Communist Party announced big plans for the 570 sq km area with a population of three million.

First, it was the emergence of the Lujiazui financial center, then key projects like the Waigaoqiao Free Trade Zone, Pudong International Airport and the World Expo 2010 site.

Over the past 18 years, Pudong has seen an average of 18% growth every year. Last year, it achieved a gross domestic product (GDP) of RMB275 billion ($123.9bil), a 14.4% increase over 2006.

The ultimate goal of the Shanghai government is to build a capitalist environment in Pudong, based on the socialist system.

Pudong New Area District publicity bureau chief Chen Gaohong said in briefing reporters recently on the 18 years of development in Pudong sqaid, ‘The federal government requests the Shanghai municipal and Pudong district governments to play a bigger role in this respect.

‘The late Deng Xiaoping said that the development of Pudong would have to be different from other coastal economic zones such as the Pearl River Delta.

‘We must start off with a complete package from manufacturing and research and development to marketing, and focus on high-tech production.’

Earlier this year, Pudong announced plans to build one million square meters of apartments to accommodate non-local professionals.
Source: The Star Online

Sometimes it is difficult to understand all the terms used. This is a brief primer.

Special Economic Zones (SEZs) are, for the moment, always located in mainland China. The government gives SEZs special economic policies and flexible governmental measures. This allows SEZs to utilize an economic management system that is especially conducive to doing business.

All of which seems pretty clear. And it has been going on since 1978 when the government decided to reform the national economic setup. Our illustration shows Shenzen, an early starter.

Since 1980, the PRC has established special economic zones in Shenzhen, Zhuhai and Shantou in Guangdong Province and Xiamen in Fujian Province, and designated the entire province of Hainan a special economic zone.

In 1984, the PRC further opened 14 coastal cities to overseas investment: Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou, Fuzhou, Guangzhou, Zhanjiang and Beihai.

Since 1988, mainland China’s opening to the outside world has been extended to its border areas, areas along the Yangtze River and inland areas.

(For the record Hainan Island is China’s biggest special economic zone.)

Shortly afterwards, the State Council expanded the open coastal areas, extending into an open coastal belt the open economic zones of the Yangtze River Delta, Pearl River Delta, Xiamen-Zhangzhou-Quanzhou Triangle in south Fujian, Shandong Peninsula, Liaodong Peninsula (Liaoning Province), Hebei and Guangxi.

In June 1990 the PRC government opened the Pudong New Area in Shanghai to overseas investment, and additional cities along the Yangtze River valley, with Shanghai’s Pudong New Area as its head.

Since 1992, the State Council has opened a number of border cities, and in addition, opened all the capital cities of inland provinces and autonomous regions.

Now it get a bit complicated because the nomenclature changes along with the developments.

At that time 15 free trade zones, 32 state-level economic and technological development zones, and 53 new- and high-tech industrial development zones were established in large and medium-sized cities. What are the differences between these categroies. They tend to have different preferential policies although the general aim is always the same — building up trade.

The five special economic zones are foreign-oriented areas which are primarily geared to exporting processed goods, integrating science and industry with trade. In 1999, Shenzhen’s new-and high-tech industry became one with best prospects, and the output value of new-and high-tech products reached RMB81.98 billion, making up 40.5% of the city’s total industrial output value.

To sum up the attractions (and they have seriously worked because these zones have been a great success are:

1. Special tax incentives for foreign investments in the SEZs.
2. Greater independence on international trade activities.
3. Economic characteristics are represented as 4 principles:

a. Construction primarily to rely on attracting and utilizing foreign capital.
b. Primary economic forms to be Sino-foreign joint ventures and partnerships as well as wholly foreign-owned enterprises.
c. Products to be primarily export-oriented.

d. Economic activities primarily driven by market forces.

Ningbo Free Trade Zone (NFTZ) was one of fifteen free trade zones approved by the State Council since 1990 and is now over 15 years old.

Xia Qun, vice-director of Administrative Committee of NFTZ, said, ‘In 1992, the State Council approved the setup of the NFTZ; in 2002, the State Council approved Ningbo Export Processing Zone, and in 2005, the Ministry of Information Industry approved NFTZ as one of the first National Electronic Information Industrial parks. The dates are the milestones for the development of NFTZ.’

The 6.25-square-kilometer NFTZ has set up a free trade zone, an export processing zone, and a bonded logistics zone covering high-tech processing, international trade and logistics industrial clusters.

By the end of last year NFTZ has attracted 6,000 enterprises with registered capital of US$51.3 billion, of which 940 are foreign-funded firms from more than 60 countries and regions with investment amounts of US$5.3 billion.

Meanwhile the figures keep ascending.

Xia said independent innovation is the key for a Zone’s rapid development.

He said, ‘The administered committee of the NFTZ promotes the construction of innovation systems and promotes the achievements of advantageous technology and development of high-tech industry with building a State level IT industrial base as the objective, and independent innovation as the core.’

This year the zone expects an industry output value of RMB12.8 billion, international trade volume of US$3.2 billion and a fiscal income of RMB359 million for every square kilometer next year.

Xia Qun said, ‘The NFTZ is looking forward to a promising future.’ With figures like that who would argue?
Source: Ningbo Life

As one of China’s four special economic zones, the coastal city Shantou has outlined a ‘three economic belts’ development strategy to build on its leading position in Guangdong province.
That is:

An urban economic belt in the east.
An industrial economic belt in the south.
An ecological economic belt in the west.

Huang Zhigang, Shantou’s Party secretary said, ‘The strategy, which is of great significance to the city’s future development in the next decade, will help develop Shantou into a real environmentally friendly coastal city,’

The eastern urban economic belt, which starts from the Gulf Bridge in the west to Laiwu in Chenghai district, will be developed into the city’s Central Business District.

Construction of the planned 80 sq km along the coast will begin in October.

Of the planned land, about 20 sq km has to be reclaimed from the sea.

Huang Zhigang said, ‘Shantou has long been affected by limited land resources, So we have to reclaim land from the sea for the new urban expansion development.’

Construction of a 21-km-long sea wall and a 16-km-long road along the coast will begin this year.
Huang Zhigang, perhaps a trifle optimisticly, said, ‘We will also build a long scenic belt along the eastern coast area, providing a real beachscape facing the South China Sea,’

Meanwhile, the southern industrial economic belt, which starts from the bonded zone and Guang’ao Port in the east to Chaonan district, has a planned area of about 117 sq km.

Within the industrial belt, construction has begun on Huaneng Haimen Power Plant, one of Guangdong’s key industrial projects during the 11th Five-Year Plan (2006-10).

Guang’ao Port, another big project within the industrial belt, has also started construction.

A natural deep-water port, Guang’ao Port has so far opened seven international routes to the Mediterranean, Middle East, Philippines and Japan, and 14 routes directly to 25 domestic ports.

A new railway section connecting to the Shenzhen-Xiamen Railway is being built.

Shantou will also develop an ecological economic belt in the west. Covering an area of about 388 sq km, the ecological belt will mainly develop environmentally friendly agriculture, hi-tech industries, a science and education zone and an urban tourism zone.
Source: China Daily

Man Sang Holdings is opening a pearl and jewelery zone in a 55%-owned investment and development project of the group in Zhuji, ,Zhejiang Province.

The opening of the center and the pearl and jewelery procurement fair were timed to coincide with the Third China — Zhuji Xishi Cultural Festival and Sixth China (International) Pearl Festival in an effort to promote the commercial and cultural aspects of pearl and jewelery trading to the world.

Known as CP&J City — it stands for China Pearls and Jewelery City — it has strong support from the provincial and municipal governments. CP&J City has also signed a strategic partnership cooperative memorandum of agreement with the Gemological Institute of America.

Over a thousand jewellery traders, purchasers, and representatives from business associations attended the opening as well as the usual push of government officials and representatives from other countries.

CP&J City is expected to become a center for pearl and jewelery trading.

The market centre in Phase 1 of the CP&J City has a construction area of 160,000 sq. m. accommodating about 2,380 shops and booths.

When the whole CP&J City project is completed, it will have an estimated over 5,000 shops and booths and become the world’s largest of its kind.

In total CP&J City will have a site area of 1.2 million sq. m. which will be developed in phases.
Source: CentreDaily

There are so many economic zones — sometimes slightly disguised with other names — that it is easy to get confused.

A bit of history may help put it in perspective.

Since 1980, China has established special economic zones in Shenzhen, Zhuhai and Shantou in Guangdong Province and Xiamen in Fujian Province, and designated the entire province of Hainan a special economic zone.
In 1984, China further opened 14 coastal cities—Dalian, Qinhuangdao, Tianjin, Yantai, Qingdao, Lianyungang, Nantong, Shanghai, Ningbo, Wenzhou, Fuzhou, Guangzhou, Zhanjiang and Beihai—to overseas investment.
In 1985, the state decided to expand the open coastal areas, extending the open economic zones of the Yangtze River Delta, Pearl River Delta, Xiamen-Zhangzhou-Quanzhou Triangle in south Fujian, Shandong Peninsula, Liaodong Peninsula, Hebei and Guangxi into an open coastal belt.
In 1990, the Chinese government decided to open the Pudong New Zone in Shanghai to overseas investment, and opened more cities in the Yangtze River valley.
This has ended up as a chain of open cities extending up the Yangtze River valley, with Shanghai’s Pudong as the ‘dragon head.’
Since 1992, the State Council has opened a number of border cities, and in addition, opened all the capital cities of inland provinces and autonomous regions.

In addition, 15 free trade zones, 32 state-level economic and technological development zones, and 53 new- and high-tech industrial development zones have been established in large and medium-sized cities.

It is massive. Huge. Almost beyond comprehension.

Not all of these zones are the same. Not all have the same abjectives. But effectively they all play multiple roles in developing the foreign-oriented economy, generating foreign exchange through exporting products and importing advanced technologies and as ‘radiators’ in accelerating inland economic development.

How well does it work? Take a single example in a single place. 78 Chinese and foreign-funded financial institutions have been set up in Lujiazui, Pudong, of which 24 foreign-funded banks have been approved to engage in RMB business.

Or, on a wider scale, there are at least 5,900 foreign-funded enterprises, with a total investment of nearly US$30 billion, and there over 5,000 major domestic enterprises across the country with a total registered capital of about RMB20 billion.
Source: China in Brief

China has embraced a new airport cities concept by setting a five-year plan in motion to develop all types of commercial space inside and outside the airport’s fences. The buildings are an offshoot of its annual growth in passenger and cargo traffic.

China is leading the world in the development of airport cities, with 15 in various stages of planning as support for an aeronautical pipeline calling for 95 additional airports by 2020 for the existing base of 149 facilities

Ping Wang, co-founder and EVP of Washington, DC-based Garfinkle & Wang Associates, and the general manager of GCW in Beijin gaid seven of the country’s existing airports, which include shared facilities with the military, are supporting 70% of the country’s annual passenger and cargo traffic.

The country is caught in an infrastructure race to build roads and high-speed rail to support office, retail, logistics, manufacturing and residential development, all airport-anchored and related. Ping Wang said, ‘The airport city program fits the People’s Republic of China’s airports extremely well.
Souce: Globest

Fuzhou Economic and Technical Development Zone (which we will refer to as FETDZ in the interests of brevity) started in January, 1985 and was one of the first state-class economic-technological development areas in the country.

It is in Fuzhou, the capital of Fujian province and reaches to the outlet of Min River and covers about 23 square kilometers.

Uniquely it is an Export Processing Zone, Free Trade zone, Taiwanese investing zone and high-tech Park. It is the only one ot its kind which manages to be all of those.

In Aug. 1996, the Ministry of Communication selected the FETDZ-based Fuzhou port as the pilot port for direct shipping across the Taiwan Straits. WHich means that the current signs of an easing of relationships with Taiway suggest the Fuzhou may be due for a major spurt of growth.

There are currently over 30 countries and regions in the world represented in the FETDZ which mainly focuses on electronics, photoelectric machinery and electronic instruments, biochemical pharmacy, machinery, metallurgy, building materials, textile and other light industries.

Now further efforts for development will be made to extend the service field to include trade, tourism, transportation and finance and possibly modern agriculture.

Its unique advantage is that it is the nearest zone on the mainland to Taiwan.

Mawei, the seat of FETDZ administration, is a district consisting of two towns and one avenue, an area of 174 square kilometers with a population of 82,000. The FETDZ administrative committee is granted the authority for management, examination and approval of foreign-funded projects.

FETDZ is very clear on the advantages from its vicinity to Taiwan will become increasingly obvious as people on either side of the Taiwan Straits further enhance their economic relations and trade contacts.
Source: FETDZ

Germany-based Leoni AG has has set up a base for the production of aviation cables in the Changzhou National New and High-tech District of Jiangsu Province. This brings it investment in the area to nearly $70 million.

As early as 1993, Leoni AG had already invested in Changzhou High-tech Zone and this has been an ongoing investment.

With the accumulated investment of nearly $70 million, Leoni has become the biggest and oldest investor in this area.
Now in the the second-phase of its engineering project, Leoni has put an additional capital of RMB33 million into the construction of the aviation cable production base.

Leoni Special Cables (Changzhou) Co. Ltd, with a registered average annual growth rate of 40% to 50%, plans to reach a sales volume of RMB1 billion in 2012.
Source: ECN Asia

China and the US will inaugurate six non-stop air routes between the two countries in 2008 and 2009, according to their agreement on further opening up aviation markets for each other.

Delta Air Lines has opened the Shanghai-Atlanta non-stop routes, marking the first US airline to open non-stop route between China and Southeast America and the first route of the airline to China.
United Airlines is to open the Guangzhou-San Francisco route on this June 20.
Northwest Airlines will fly the Detroit-Shanghai flight in 2009.
Pan American World Airways (note although this is mentioned by World Markets the original airline has been defunct for some years and if it is flying this will be the third attempt at resuscitation. The picture is to remind older readers of the delights of that airline) will fly the Philadelphia-Beijing flight in 2009. A careful check shows this news was not released on April 1.
Continental Airlines will launch the Shanghai-New York flight in March 2009.

Apart from US air carriers, some large Chinese air carriers will also open non-stop routes between the two countries.

For instance, Hainan Airlines, will inaugurate the Beijing-Seattle route this June.

This will not be easy. The eight 787s Hainan ordered from Boeing had been scheduled to arrive in June; they’re now delayed until at least March.

Preparations to launch a new route can take a full a year, but to begin service for the summer tourist season, Hainan is finishing in half that time. The Chinese airline had been in talks with the Port of Seattle for several years about new nonstop service; it received approval from the U.S. Department of Transportation to go ahead in February.

Hainan is scrambling to complete its online reservations system and reach code-share deals with U.S. airlines to offer regional connections throughout the Northwest.

Most Americans have never heard of Hainan, China’s version of Hawaii, let alone its airline, Wang Yingming, the head of the airline and shown in our illustration) is confident he can win them over with superior service.

Founded in 1993, Hainan is China’s fourth-largest carrier, behind Air China, China Southern and China Eastern. The top three are state-run companies, but Hainan is not. It trades on the Shanghai stock exchange.

Hainan has expanded rapidly, ascending along with China’s booming economy. It flies to more than 40 cities within China and has international routes to Europe, Russia and Japan.
Sources: Trading Markets and The Seattle Tunes