Vi­tal­iz­ing North­east­ern China: Liaon­ing’s Busi­ness Savvy and Am­bi­tion

Liaon­ing’s Busi­ness Savvy and Am­bi­tion

China Pictorial (English) - - FRONT PAGE - Text by Hu Zhoumeng

Liaon­ing Prov­ince, tra­di­tion­ally an im­por­tant in­dus­trial base, is trans­form­ing its econ­omy through high-qual­ity devel­op­ment, with grow­ing pri­vate busi­nesses and ex­panded in­ter­na­tional co­op­er­a­tion.

In late Au­gust, Shenyang, cap­i­tal city of Liaon­ing Prov­ince in north­east­ern China, wel­comed more than 1,000 Chi­nese pri­vate en­trepreneurs and rep­re­sen­ta­tives from Global 500 com­pa­nies to the 2018 Sum­mit of China Top 500 Pri­vate En­ter­prises. The meet­ing marked the sec­ond time the sum­mit was held out­side Bei­jing since it was launched by the All-china Fed­er­a­tion of In­dus­try and Com­merce (ACFIC) nine years ago.

Dur­ing the meet­ing, the ACFIC re­leased its an­nual rank­ing of the 500 largest Chi­nese pri­vate com­pa­nies, which is a barom­e­ter for China’s pri­vate econ­omy. Even the com­pany rank­ing last on the list reg­is­tered rev­enues of 15.7 bil­lion yuan (US$2.3 bil­lion) in 2017. The fig­ure re­leased last year was 12.1 bil­lion yuan (US$1.8 bil­lion). Smart­phone maker Huawei topped the list with rev­enues of 603.6 bil­lion yuan (US$88 bil­lion), while e-com­merce re­tailer Sun­ing took sec­ond place.

“China’s pri­vate busi­nesses main­tained healthy devel­op­ment mo­men­tum in 2017,” said ACFIC Vice Chair­man Huang Rong, adding that the com­pa­nies have steadily op­ti­mized their in­dus­trial struc­ture with greater con­tri­bu­tions to so­ci­ety. In the past year, the pri­vate sec­tor con­trib­uted more than 60 per­cent of China’s GDP, play­ing an

in­creas­ingly im­por­tant role in the econ­omy.

The three-day sum­mit be­came an eco­nomic boon to the north­east­ern prov­ince by pro­vid­ing enor­mous busi­ness op­por­tu­ni­ties. Lo­cal gov­ern­ments and com­pa­nies signed agree­ments for 76 projects with en­ter­prises on the list dur­ing the meet­ing, the to­tal value of which stands close to 300 bil­lion yuan (US$43.9 bil­lion). This demon­strated grow­ing con­fi­dence in the re­gion’s eco­nomic po­ten­tial af­ter Liaon­ing’s GDP sur­passed 1.1 tril­lion yuan (US$160.8 bil­lion) in the first half of 2018, up by 5.6 per­cent year-on-year.

Liaon­ing is tra­di­tion­ally a sig­nif­i­cant in­dus­trial base dat­ing back to the 1950s. Dur­ing the pe­riod of China’s First Five-year Plan (1953-1957), the prov­ince wel­comed 24 of the 156 na­tional key projects and more than 30 per­cent of the coun­try’s to­tal in­vest­ment. Re­puted to be “China’s in­dus­trial cra­dle,” Liaon­ing pro­duced more than 200 “China’s firsts” in man­u­fac­tur­ing such as the first fighter air­craft and the first 10,000-ton ship.

How­ever, Liaon­ing grad­u­ally lagged be­hind in the past decades as it shifted away from its tra­di­tional in­dus­trial model with a large pro­por­tion of state-owned en­ter­prises. Eco­nomic growth was slug­gish af­ter 2010. But now Liaon­ing is trans­form­ing its econ­omy through high-qual­ity devel­op­ment with

grow­ing pri­vate busi­nesses and ex­panded in­ter­na­tional co­op­er­a­tion.

“To meet the de­mand for a con­sump­tion up­grade, we will in­crease ef­forts to rev­o­lu­tion­ize our re­tail stores with cut­tingedge tech­nolo­gies,” pledged Zhang Jin­dong, chair­man of Sun­ing. He high­lighted the com­pany’s plan to op­er­ate about 600 smart re­tail out­lets by 2020 in Liaon­ing Prov­ince to sup­port the gov­ern­ment’s ef­forts to re­struc­ture the econ­omy.

Zhang also re­marked that pri­vate en­ter­prises are ma­jor ben­e­fi­cia­ries of China’s re­form and open­ing-up pol­icy as lo­cal gov­ern­ments work hard to cre­ate a pro-busi­ness en­vi­ron­ment. Liaon­ing of­fi­cials are aware of this devel­op­ment. At the end of 2016, the prov­ince adopted a law to reg­u­late and im­prove its busi­ness en­vi­ron­ment. In 2017, Liaon­ing es­tab­lished China’s first pro­vin­cial-level su­per­vi­sory bu­reau to im­prove the busi­ness en­vi­ron­ment.

Aim­ing to op­ti­mize ser­vices, in­crease ef­fi­ciency and save time and money for busi­nesses, the Liaon­ing gov­ern­ment has re­mained ded­i­cated to trans­form­ing pol­icy de­sign into prac­ti­cal mea­sures. Since 2015, Liaon­ing has can­celed or ad­justed more than 1,000 ad­min­is­tra­tive items. Thanks to th­ese ef­forts, 32 cer­tifi­cates in­volved in the in­dus­trial and com­mer­cial reg­is­tra­tion have been in­te­grated into one, 376 cer­tifi­cates are avail­able im­me­di­ately upon ap­pli­ca­tion, and 487 items can be com­pleted “in a one-time visit.”

“To pave the way for pri­vate in­vest­ment, the gov­ern­ment must deepen re­forms to lower the thresh­old bar­ring some en­ter­prises from key sec­tors, fa­cil­i­tate tax and fee cuts, en­hance the bridge con­nect­ing the real econ­omy to fi­nan­cial ser­vices, al­le­vi­ate fi­nanc­ing dif­fi­cul­ties fac­ing small and medium-sized com­pa­nies, and re­duce op­er­at­ing costs,” said Wang Xinzhe, chief econ­o­mist of China’s Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy, at the sum­mit.

In 2017, Liaon­ing man­aged to re­duce the tax bur­den on en­ter­prises by 128.5 bil­lion yuan (US$18.8 bil­lion). Ac­cord­ing to the ad­min­is­tra­tion for in­dus­try and com­merce of the prov­ince, from Jan­uary to July this year, newly reg­is­tered mar­ket en­ti­ties in Liaon­ing num­bered 381,000, up by 9.1 per­cent year-on-year.

“The weak links of Liaon­ing’s econ­omy are found in the pri­vate sec­tor, but so is its po­ten­tial,” said Chen Qi­ufa, sec­re­tary of the Liaon­ing pro­vin­cial Party com­mit­tee when ad­dress­ing the meet­ing. Chen de­clared that the prov­ince would fully sup­port the pri­vate econ­omy to sta­bi­lize eco­nomic growth, push trans­for­ma­tion and in­dus­trial up­grade and in­crease em­ploy­ment by cre­at­ing new busi­ness op­por­tu­ni­ties.

This year marks the 40th an­niver­sary of China’s re­form and open­ing up, and the coun­try aims to mark the oc­ca­sion by broad­en­ing mar­ket ac­cess, im­prov­ing in­vest­ment en­vi­ron­ment and ex­pand­ing im­ports. “Global in­vestors are look­ing to China for op­por­tu­ni­ties,” said B. V. Shree­d­har, vice pres­i­dent of the Hong Kong branch of the State Bank of In­dia.

Fos­ter Arata, vice pres­i­dent of Boe­ing Cap­i­tal Cor­po­ra­tion, is a wit­ness to the long- term co­op­er­a­tion of Boe­ing and lo­cal man­u­fac­tur­ers in Liaon­ing. The Shenyang Com­mer­cial Air­craft Cor­po­ra­tion has pro­duced air­plane com­po­nents for Boe­ing since 1990, start­ing with cargo doors for the 757 and ex­pand­ing to com­plex em­pen­nage man­u­fac­tur­ing. Boe­ing also opened an AVIC- Boe­ing Man­u­fac­tur­ing In­no­va­tion Cen­ter satel­lite of­fice in Shenyang in 2015.

“To­day, more than half of the com­mer­cial jet­lin­ers op­er­at­ing in China are Boe­ing

planes, and more than 9,000 Boe­ing air­craft fly through­out the world with parts and as­sem­blies built in China,” Arata noted. “Boe­ing will con­tinue to ad­vance China’s avi­a­tion in­dus­try and part­ner with China for mu­tual ben­e­fits.”

Liaon­ing Prov­ince, like other re­gions in the coun­try, is open­ing its arms to for­eign in­vestors and en­trepreneurs. In the first seven months of 2018, the ac­tual use of for­eign in­vest­ment in Liaon­ing reached US$3.48 bil­lion, up by 15.3 per­cent year-on-year.

“Thanks to Liaon­ing’s strong man­u­fac­tur­ing power and sound busi­ness en­vi­ron­ment, our co­op­er­a­tion has been suc­cess­ful,” de­clared Jochen Goller, pres­i­dent of BMW Group Re­gion China. The com­pany es­tab­lished a joint ven­ture with lo­cal car maker Bril­liance Auto in 2003 and plans to build its third fac­tory in the prov­ince to ex­pand pro­duc­tion.

Liaon­ing’s lat­est ef­fort to­wards fur­ther open­ing up has been high­lighted by the China ( Liaon­ing) Pilot Free Trade Zone launched in April 2017. The free trade zone tar­gets in­ter­na­tional trade, modern man­u­fac­tur­ing, fi­nan­cial ser­vices, modern lo­gis­tics and sci­en­tific ser­vices and had drawn 414 for­eign- in­vested com­pa­nies from more than 40 coun­tries and re­gions by July this year. With im­ports and ex­ports reach­ing 71.77 bil­lion yuan ( US$10.5 bil­lion) in the first half of 2018, the zone is ex­pected to ex­pand trad­ing part­ner­ships with for­eign en­ter­prises and be­come the driv­ing force in de­sign­ing a new eco­nomic land­scape in the prov­ince.

The 2018 Sum­mit of China Top 500 Pri­vate En­ter­prises was held in Shenyang, cap­i­tal of Liaon­ing Prov­ince, from Au­gust 29 to 31. by Guo Shasha

Fe­bru­ary 12, 2018: Work­ers from Dalian Spe­cial Steel Prod­ucts Co., Ltd. pour molten steel into an AOD fur­nace. VCG

In the 1950s, work­ers with An­shan Iron and Steel Group Cor­po­ra­tion built blast fur­nace gas pipelines. by Cai Shangx­iong

The re­claimer man­u­fac­tured by Dalian Huarui Heavy In­dus­try Group Co., Ltd. has a ca­pac­ity of 14,400 tons per hour. cour­tesy of the pub­lic­ity depart­ment of Liaon­ing pro­vin­cial Party com­mit­tee

Fe­bru­ary 23, 2018: A car is on the as­sem­bly line e of a Shenyang-based plant op­er­ated by BMW W Bril­liance Au­to­mo­bile Ltd., a joint ven­ture be­tween en BMW and Bril­liance Auto. uto. IC

Fe­bru­ary 11, 2015: Thomas R. Ar­mijo (left, front), then di­rec­tor of sup­plier man­age­ment of Boe­ing Com­mer­cial Air­planes, and Zhu Zhen­jun, deputy head of the depart­ment of civil air­craft of Avi­a­tion In­dus­try Cor­po­ra­tion of China (AVIC), sign co­op­er­a­tion agree­ments to es­tab­lish an Avic-boe­ing Man­u­fac­tur­ing In­no­va­tion Cen­ter satel­lite of­fice in Shenyang, Liaon­ing Prov­ince. by Yao Jian­feng/xinhua

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