Coastal cities diversify

Coastal cities in Liaoning province are becoming a hot spot for investors in the wake of the area being named a State-level priority for economic development.

Six cities in the Liaoning coastal economic belt defined as a strategic development area by the government are Dalian, Yingkou, Jinzhou, Panjin, Dandong and Huludao.

"Blind competition and repetitious construction projects should be avoided among these cities," said Feng Guisheng, director of the Institute of Economics at the Liaoning Academy of Social Sciences.

"One effective way is to make clear that each city promotes a distinct advantage, and that each city focuses on that advantage during invitations for bids for investment," Feng said.

Three mayors agreed with that assessment during interviews with China Business Weekly.

Panjin diversifies

Several workers fix a drilling rig in Liaohe Oilfield in Panjin. Panjin and other coastal cities in Liaoning province are seeking to diversify their economies in coming years. Asianewsphoto

Panjin Mayor Sun Guoxiang said his city's distinctive feature is its oil-related industry.

"Panjin is a city built on the Liaohe Oilfield, and the petrochemical industry is vital to development of the city," Sun said.

Liaohe Oilfield is the third largest oilfield in China. Oil and natural gas sectors accounted for 46 percent of the city's GDP in 2008.

However, steady oil price declines have hurt the local economy.

Panjin's first-quarter GDP decreased from 11 percent in 2008 to 4.7 percent in 2009.

"We realize from the global financial crisis that it is not safe to rely solely on one industry," Sun said.

"Our economy won't become sustainable until our industry becomes diversified," he said.

For example, the city is seeking more investments in petroleum equipment manufacturing, the mayor said.

The city is home to the Panjin Petroleum Equipment Production Base, which is 35.7 sq km in size.

Currently, about 100 enterprises have operations at the base, and the combined value of their industrial output stood at 6 billion yuan in 2008.

While Panjin is focusing on serving traditional energy sectors, Jinzhou is looking at alternative energy as a platform for future economic development.

Wind power is one of the alternative energy sources being developed by Jinzhou.

"Jinzhou has a coastline of 105.2 km and wind from the sea provides a good resource to develop the wind power industry," Jinzhou Deputy Mayor Liu Yang said.

Currently, the city has partnered with China Guodian Corp, China Power Investment Corp and Hong Kong-based UPC Renewables in wind farm projects with a combined capacity of 600 kilowatt-hours.

The photovoltaic energy industry is growing, too.

According to city government documents, the output value of the photovoltaic industry increased from 500 million yuan in 2005 to 3 billion yuan in 2008.

The city plans to develop a 100-hectare industrial park to further develop its photovoltaic industry and raise the output value to 50 billion yuan in the next five years.

"We will build Jinzhou as the new alternative energy center of Liaoning province," Liu said.

While Panjin and Jinzhou are focusing on serving traditional or alternative energy industries, Yingkou's mission involves metal.

A major investor in Yingkou is China's Minmetals Corp, the country's largest metal trader.

The China Minmetals (Yingkou) Industrial Park comprises 30 sq km - one fourth of the total area of the Yingkou Coastal Industrial Base.

The park is now inviting investments in equipment manufacturing, steel and new materials.

"Minmetals has a large network worldwide. The world knows and trusts the company much more than it knows our city," said Yingkou Mayor Gao Jun.

"Our partnership with Minmetals will greatly spur investment," Gao said.

The company has invested 15.4 billion yuan in the park, and the company's investment will reach 30 million yuan in coming years, said Dong Hailong, vice-director of the general manager's office for Minmetals (Yingkou) Industrial Park Development Co Ltd.

"Although a seawater desalination project and a five-star hotel project were suspended by a Swiss partner in 2008 due to the global financial crisis, we still have great faith in future development of the city," Dong said.

The company has partnered with Hainan Airlines to build an airport in Yingkou at a cost of 1 billion yuan.

(China Daily 08/03/2009 page6)