Liaoning steps up revitalization efforts
Northeastern province plans to improve business environment and develop high-tech sector to attract investors
Liaoning, a province in Northeast China known as one of the country’s heavy industrial bases, will introduce more measures to improve its overall business environment and develop its high-tech sector to make it more appealing to both foreign and domestic investors.
The central government’s new round of reform and opening-up offers many opportunities, with stimulus programs such as the pilot free trade zone program, the revival plan for the northeast region, and China’s ongoing industrial and consumption upgrading.
The provincial government has given more administrative power to platforms such as the China (Liaoning) Pilot Free Trade Zone, Shenfu New Area, Sino-German (Shenyang) High-end Equipment Manufacturing Industrial Park and Jinpu New Area in Dalian city to improve their service ability, said Tang Yifei, deputy head of Liaoning’s Provincial Development and Reform Commission.
Supported by its rich natural resources, abundant manufacturing facilities and industrial workers, Liaoning province was once a titan of heavy industry.
At its peak in the 1970s it was among the top three industrial centers along with Shanghai and Tianjin, before declining rapidly over the following decade when it found it difficult to adapt to the structural reforms of the new market economy, largely because of high operational costs and low government efficiency under the long-term influence of the planned economy.
Eager to restore Liaoning’s developing ability, the provincial government set up a specialized bureau in 2015 for improving the business environment, providing convenience for business entities operating in Liaoning. The bureau opened a service hall for administrative affairs in Shenyang, the provincial capital, where almost all the provincial government’s departments have a presence, to offer face-to-face advice and collect documents.
The hall used to be packed with up to 800 applicants each day, but since 2017 it has been possible for about 97 percent of the applications to be reviewed and approved online, according to Wu Juan, the bureau’s deputy director.
The Liaoning government also cut the number of administrative procedures necessary to register a business from more than 100 to 32 in 2018, giving rise to a more convenient business environment and contributing to a 17.3 percent yearon-year increase in private investment last year, according to Liaoning’s Provincial Commerce Department.
“We will continue to encourage State-owned enterprises in Liaoning to transform and upgrade themselves by undergoing industrial reorganization and to set up capital investment arms to preserve and boost their value,” said Xiang Honglin, vice-chairman of Liaoning’s State-owned Assets Supervision and Administration Commission.
Moreover, private capital is welcomed in efforts to reform SOE ownership. A batch of public-private partnership projects have already been launched to attract private capital, he said, noting the government will find new growth momentum by rolling out favorable policies and leveraging its prowess in manufacturing and talent cultivation to ensure the sustainable growth of Liaoning’s SOEs.
In addition to the newly established Liaoning Port Group in January, the province’s 27,514 public welfare institutions to date have been optimized and integrated into 2,366, and 1,174 operational institutions were transferred to commercial companies to form 12 business groups in fields including tourism, healthcare and logistics.
“As local governments are reforming to streamline administrations and improve services, the old saying ‘Investment does not go beyond Shanhaiguan Pass’ (a traditional geographical division separating the region from the rest of China) no longer exists, both global and domestic investors are swarming into Liaoning,” said Shen Shiying, deputy director-general of Liaoning Provincial Industry and Information Technology Department.
BMW Brilliance Automotive, the German automaker’s joint venture in China, opened its third plant in Shenyang at the end of 2018. The move made the company the first beneficiary after China substantially eased foreign ownership limits in the auto industry.
Besides BBA, Saudi Arabian Oil Co, or Saudi Aramco, also announced in February that it would invest $10 billion to develop a fully integrated refining and petrochemical complex in Panjin, a city in Liaoning.
The project will include a 300,000-barrel-per-day refinery with a 1.5 million metric tons per annum ethylene cracker. Saudi Aramco will supply up to 70 percent of the crude feedstock for the complex, which is expected to be operational in 2024.
Suning Holdings Group, China’s largest omnichannel retailer by sales revenue, plans to run around 600 smart retail outlets by 2020 in Liaoning to coincide with the local government’s efforts to restructure its economy.
Shen said the flexible six-cable parallel link system, which took Dalian Huarui Heavy Industry Group four years to design, manufacture and install, is one of the three major technological breakthroughs of China’s Five-hundred-meter Aperture Spherical Radio Telescope (FAST), located in Southwest China’s Guizhou province.
The 30-ton feed cabin is suspended by six cables from six concrete towers on the surrounding hills, realizing long-span instantaneous and accurate positioning of the cabin, revolutionizing the previous rigid support model between feed source and reflector in radio telescopes, said Wei Xufeng, vice-president of DHHI Group.
Supported by more than 10,000 employees, the Dalian-based SOE has entered 91 countries and regions such as Australia, South Africa and Italy with its products serving sectors including metallurgy, mining, ports, shipbuilding, energy and aerospace.
Encouraged by these new growth points, Liaoning saw its foreign trade jump 11.8 percent year-onyear to 754.73 billion yuan ($107 billion) in 2018, while its trade in services rose by 6 percent year-onyear to $18 billion, ranking among the top eight provinces in China, data from Liaoning Provincial Bureau of Statistics show.
Because many foreign companies fear unfair competition from SOEs and local protectionism, the key for Liaoning to gain more foreign investment is to continue to eliminate negative factors and allow global players to enter more industries that were previously monopolized by SOEs, said Zhang Yunling, former director of international studies at the Chinese Academy of Social Sciences.
He said this will not only generate fairer competition for foreign companies, but also attract more private investment to the province. On the other hand, Liaoning’s modern agriculture and service base, and national-level research institutes in many fields and universities can also be attractive to global companies.
Under the government plan, Liaoning will improve its transportation infrastructure by investing 10 billion yuan this year to better serve the real economy and regional connectivity. It will rebuild 4,000 kilometers of rural roads and expand logistics facilities to handle another 10 million tons of rail cargo and 88,000 more containers by both rail and water.