21.8.2001

SHANDONG PROVINCE（山東省）

 

Economic Indicators

	1999		2000
Economic Indicators	Value	Growth	Value	Growth
		(%, y-o-y)		(%, y-o-y)
Area (sq km)	156,700	--	156,700	--
Population (mn)	88.8	0.5	90.8^	2.2
Gross Domestic Product (RMB bn)	766.2	7.0 *	854.2	10.5 *
Per Capita GDP (RMB)	8,648	6.4	N/A	N/A
Disposable Income Per Capita
- urban (RMB)	5,809.0	7.9	6,490.0	11.7
- rural (RMB)	2,549.6	3.9	2,659.2	4.3
Fixed-assets Investment (RMB bn)	131.3	10.7	156.4	19.1
Added Value Output
- primary industry (RMB bn)	122.1	-0.7	126.9	3.9
- secondary industry (RMB bn)	370.5	7.2	422.7	14.1
- tertiary industry (RMB bn)	273.6	10.5	304.7	11.4
Retail Sales (RMB bn)	231.0	8.6	254.6	10.2
Inflation (Consumer Price Index, %)	-2.9		0.2
Exports (US$ bn)	12.2	8.2	16.1	32.0
- by FIEs (US$ bn)	5.9	11.9	7.9	33.9
Imports (US$ bn)	8.6	8.5	12.2	41.9
- by FIEs (US$ bn)	4.3	2.6	6.0	39.5
Foreign Direct Investment
- number of projects	1,717	25.9	2,728	58.9
- contracted amount (US$ bn)	3.1	41.3	5.1	64.5
- utilized amount (US$ bn)	2.3	2.5	3.0	31.5

Note: * In Renminbi real terms       

^ Latest population census, 1999 figure was estimate based on previous survey.

Sources:   Statistical Yearbook of Shandong and State Statistical Bureau

                       

General Background

 

Shandong - abbreviated as Lu（魯）- is located at the estuary of the Yellow River（黃河）in the Bohai Bay（渤海灣）.  Shandong is China's second most populous province after the Henan province.

 

The provincial capital is Jinan（濟南）.  After expansion of the designated coastal open economic zones in 1985, Qingdao（青島）, Yantai（煙台）, Weihai（威海）, Zibo（淄博）, Weifang（濰坊）, Rizhao（日照）and Dongying（東營市）have been opened to foreign investors and enjoy preferential economic policies.  Under these open cities, Jiaozhou（膠州）, Laiyang（萊陽）, Longkou（龍口）, Zhucheng（諸城）, Qingzhou（青州）, Laizhou（萊州）, Laoshan（嶗山）, Jiaonan（膠南）, Laixi（萊西）, Jimo（即墨）, Pingdu（平度）, Mouping（牟平）, Zhaoyuan（招遠）, Haiyang（海陽）, Qixia（棲霞）, Penglai（蓬萊）, Rushan（乳山）, Wendeng（文登）and Yungcheng（榮成）are also designated as open.

 

Shandong is rich in mineral resources and crude oil.  The Shengli Oil Field（勝利油田）is famous in the country.  In 1999, its output of crude oil accounted for 17% of the country's total, ranked second after Heilongjiang.  Deposits of more than 50 minerals including sulphur, diamond, graphite, coal, iron and magnetise are ranked among the largest in China.  Also, Eastern Shandong is the kingdom of gold whose production rank the top in the country

.

Agriculture is a major sector of the province's economy. Yantai is a key export base of agricultural products, focusing on apples, peanuts and vegetables. Output of many agricultural products, such as grain, cotton, oil-bearing crops, vegetables, meats and fruits, are ranked the top in the country

 

Shandong is one of the four biggest salt production bases of China.  With its ground halogen water (3-6 times denser than sea water), Shandong proves to be a very good place for salt production and to develop salt chemical engineering.

 

With a 3,300 km-long coastline (which accounted for one-sixth of China's total), Shandong has a strong fishery and aquaculture industry.  In 1999, its aquatic output ranked the first in the country.  The province leads the country in the exports of prawns, crabs, scallops, shellfish, algae, abalone, sea cucumber and sea urchin.

 

Infrastructure

Water Transport － Along the coastline of the Shandong Peninsula, there are 26 large and small ports with a cargo handling capacity of over 100 mil­lion tons per annum.  Qingdao（青島）, Yantai（煙台）and Weihai（威海）are the major cargo and passenger ports, while Rizhao（日照）is one of China's most important specialised coal-transportation port.  Dongying（東營）, Longkou（龍口）, Shidao（石島）, Lanshan（嵐山）, together with the four above-mentioned ports were approved as first-class open ports. 

 

Qingdao port's container handling capacity has been increasing in the past few years.  In 1999, it handled more than 1.5 million TEUs of containers, making it the second busiest container port in China, after Shanghai.  Besides, China Ocean Shipping Corporation (COSCO), one of the biggest shipping giants in China, has opened an express route from Qingdao to Japan recently.  The route passes several ports including Yantai, Qingdao, Tokyo and Yokohama.

 

Railways － Major railways in Shandong include Hanji railway（邯濟鐵路: Handan-Jinan 邯鄲－濟南）, the Beijing-Shanghai Railway（京滬線）and Beijing-Kowloon Railway（京九線）running through the province from north to south, and the Jinan-Qingdao Railway crosses from east to west which connects the province to all directions in the country.

 

A new railway network will be built from Harbin in Heilongjiang to Changxing in Zhejiang.  The railway network will link the Harbin-Dalian railway and a 170-kilometre-long ferry passage from Dalian to Yantai.  It will further extend from Shandong to Zhejiang and running through Shanghai and Jiangsu in order to improve China's existing railway network in Heilongjiang, Jilin, Liaoning, Shandong, Jiangsu and Zhejiang upon completion.

 

Highways － Jinan-Qingdao Expressway（濟青高速公路）has opened to traffic and some expressways are under construction, which include the portion linking Beijing-Shanghai Expressway（京滬高速公路）and Beijing-Fuzhou Expressway（京福高速公路）.  Besides, several new expressways linking Dongying to Qingzhou, Qufu to Jiehe, Jiehe to Linhong, Dezhou to Qihe and Rizhao to Heze（荷澤） , most of which being portions of the national traffic network, were finished recently.  New expressways will be constructed including those from Laixi to Fenshui, Yantai to Laizhou and Zhuyuan to Qufu. 

 

Air Transport － Shandong has 9 civil airports in operation.  The international airports at Jinan and Qingdao had offered air routes to domestic and international cities including Hong Kong and Republic of Korea. 

Telecommunications － Shandong's post & telecommunications have been developed rapidly over the past decade.  By the end of 2000, mobile phone subscribers in Shandong have reached 5.1 million. 

 

Electricity － Shandong is the home of the only independent power network among the country's six power networks with an annual output of 91 billion kWh.  The province also has planned to develop wind, tidal and solar energy.

 

Industries

 

Shandong is the third strongest industrial production base in China, after Guangdong and Jiangsu.  Industrial output reached Rmb831.2 billion in 2000 and industries are mainly located in Qingdao, Yantai, Weifang, Jinan and Weihai.  Major industries included textiles and garments, machinery, consumer electronics, building materials, metals, petrochemicals, steel, coal and soda ash, and food processing. 

 

In 1999, the province's output of chemical fertilizer rose to 3.9 million tons, ranked the first in the country; raw coal 90 million tons, ranked the second; crude oil 26.7 million tons, ranked the second; and cement 59.5 million tons, ranked the first.  Many other industrial products also ranked high in the country, including soda ash, caustic soda, raw salt, paper, wine & beer, cotton yarn, clothes, and synthetic detergents.

 

Many China's industrial giants are based in Shandong, including the Qingdao Haier Group（青島海爾集團）, Qingdao Hisense Group（青島海信集團）, Etsong Tobacco Group（頤中煙草集團）, Qilu Petrochemical Corp.（齊魯石化總廠）, Jinan Chemical Fibre Corp.（濟南化縴總公司）, Tsingdao Beverage（青島啤酒）, Shengli Oil Field（勝利油田）, Laiwu Iron & Steel Corp.（萊蕪鋼鐵總廠）, China Qingqi Group（中國輕騎集團）, Small-Duck (Xiaoya) Washing Machine Group（小鴨集團）, Jinan Iron & Steel Group（濟南鋼鐵集團總公司）and Jinan No.2 Machine Tools Factory（濟南第二機床廠）.

 

In recent years, Shandong has successfully promoted many famous brandnames such as Haier Electronics（海爾電器）, Hisense Electronics（海信電器）, Tsingdao Beer（青島啤酒）, China Qingqi Motorcycles（中國輕騎）, Small-Duck Washing Machine Group（小鴨洗衣機）, Kongfujia Liquor（孔府家酒）, Yellow-River Truck（黃河卡車）, Zibo Porcelain（淄博陶瓷）and Weifang Kite（濰坊風箏）.

 

In coming years, Shandong will concentrate in developing the electronic information sector as its leading industry.  Priority will be given to the development of computers, telecommunications, software applicable to information networking and network telecommunications.  The province will also develop software applicable to network engineering and telecommunications as well as software related to the Internet and support software.   Currently, about 1,220 enterprises are engaged in new and hi-tech industry in the province.

 

Tourism

 

Taishan（泰山）, which is considered as one of the world natural relics,  is located in Shandong.  The province also has many cultural relics spreading from Jinan, Taian and Qufu（曲阜）to the seaside tourist resorts in Qingdao, Yantai and Weihai.  Major tourist attractions include Jinan's Daming Lake（大明湖）, Qianfo Hill（千佛山）, Baotu Spring（豹突泉）, and Lingyan Temple（靈岩寺）; Qingdao's Laoshan Mountain（嶗山）; Qufu's Confucius Mansion, Temple, Forestry（孔府－孔廟－孔林）; as well as Yantai's Penglai Pavilion（蓬萊閣）and Weihai's Liugong Island（劉公島）, among which 11 are at state level and 145 are at provincial level.   

 

Shandong also hosts a number of popular tourist festivals and celebrations, including the International Confucius Cultural Festival, the Weifang International Kite Festival, the Taishan（泰山）International Mountaineering Festivals and Qingdao International Beer Festival.  In 2000, about 723,100 tourists (+16.3%) visited the region and generated revenue of US$315 million (+18.9%).

 

Consumer Market

 

Shandong ranked the third in terms of retail sales of consumer goods in China, after Guangdong and Jiangsu.  In 2000, the province's total sales of consumer goods reached Rmb254.6 billion (+10.2%).  Major consumer markets are located in Jinan, Qindao, Yantai, Weifang and Weihai.

 

Major department stores and shopping centres in Shandong include Jinan Yinzuo Shopping Centre（濟南銀座商城）, Qingdao Liqun Co., Ltd.（青島利群股份有限公司）, Qingdao Hisense Plaza（青島信信廣場）, Jinan Guihe Plaza（濟南貴和購物中心）, Qingdao Chinese Goods Shareholding Corp.（青島國貨股份有限公司）, Jinan People's Shopping Centre（濟南人民商場）, Qingdao Laoshan Department Store（青島嶗山百貨大樓）, Jinan Hualian（濟南華聯）and Jinan Department Store（濟南巿百貨大樓）.

 

In recent years, many foreign investors (including Hong Kong businessmen) have set up co-operative retail outlets in Shandong's major cities such as Jinan, Qingdao, Weihai and Yantai.  Qingdao was one of the first 12 pilot cities approved by the State Council to form Sino-foreign retail joint ventures with import-export rights.  At present, there are 3 famous multi-international department stores/supermarkets have invested in Qingdao, they are Parkson, Jusco and Carrefour.  Besides, a Taiwanese-invested retail gaint has been set up in Jilin recently -- the Jinan Renmin Daruifa Commercial Co. Ltd., with total investment of US$30 million.

 

Foreign Trade

 

In 2000, Shandong's exports totalled US$16.1 billion (+32.2%).  Major export goods were machinery, electronics, chemicals, textiles, gar­ments, etc.  Major export markets were Japan, the US, Republic of Korea, Hong Kong and Germany. 

 

Shandong imported US$12.2 billion (+41.9%) in 2000.  Major import commodities included steel, machinery, wool, chemicals, raw materials, com­puters, complete sets of equipment and technology and fertiliz­ers.  Major import sources were Republic of Korea, Japan, the US, Germany and Russia.

 

Hong Kong was Shandong’s 4^th biggest trading partner, with total trade of US$745 million in 1999. In that year, Shandong exported US$576 million worth of goods to Hong Kong, and imported US$149 million from Hong Kong in return.

 

In coming year, Shandong will emphasize on the development of the five major export-oriented sectors of electro-machinery, textiles and garments, chemicals and pharmaceuticals, building materials and agricultural products.

 

Foreign Investment

 

In 2000, Shandong approved 2,728 foreign-funded projects (+58.9%) with contracted foreign investment of US$5.1billion (+64.5%).  The province actually used more than US$3.0 billion (+31.5%) of foreign capital in 2000. 

 

After Republic of Korea, Hong Kong was the 2^nd biggest investor in Shandong. In 1999, Hong Kong investors signed 298 contracts with contractual amount of US$895 million in Shandong. Shandong also actually utilized US$663 million of Hong Kong investments. Jinan, Qingdao, Yantai and Weihai were the primary locations for overseas investments.  Other major foreign investors came from the US, Japan, the Virgin Islands and Taiwan. 

 

Foreign investments are encouraged to invest in its industrial and trade sectors such as infrastructure and various new and hi-tech industries in Qingdao.  So far, 37 of the world's top 500 companies, including the US Lucent, German Metro and the French Carrefour, have already set up their subsidiaries in the city.  These ventures are mainly engaged in such areas as electronic equipment, machinery, foodstuff and trade. 

 

In the past three years, Yantai strengthened its co-operation with multinational companies and more than 40 world-renowned foreign companies, such as Daewoo from the Republic of Korea and Mitsubishi from Japan, have started large-scale projects in Yantai There were 188 projects with an investment exceeding US$10 million and total investment in these projects accounting for 47% of the city's total. 

 

To reform the existing processing trade system and to go in line with international practice, the Chinese government has decided to set up export processing zones in 15 pilot cities.  Yantai and Weihai are selected in this trial program.  Export processing zones are special restricted areas administered by the Customs.  Goods moving in and out of the zones are regarded as imports and exports.  Enterprises involving in export processing, storage and transportation are allowed to be set up in the zones. 

 

Economic Indicators of Major Cities (1999)

	Population	GDP	Industrial Output	Retail Sales	Utilized FIE
Cities	('000)	(Rmb bn)	(Rmb bn)	(Rmb bn)	(Rmb mn)
Qingdao 青島	7,030   (+0.5%)	99.3 (+11.8%)	114.9(+10.9%)	27.0(+11.6%)	919.7 (+26.3%)
Jinan       濟南	5,576   (+0.7%)	88.1 (+7.3%)	62.9 (+5.9%)	31.8(+9.3%)	94.9   (-77.4%)
Yantai     煙台	6,447   (+0.2%)	81.0 (+8.1%)	89.6(+5.5%)	23.2(+9.4%)	329.8 (-30.2%)
Weifang  濰坊	8,400   (+0.5%)	64.7 (+6.4%)	61.5 (+6.6%)	24.5(+7.0%)	117.8 (-26.8%)
Zibo       淄博	4,057   (+0.5%)	56.8 (+6.0%)	60.0 (+15.0%)	16.8(+9.8%)	82.5   (+6.5%)
Weihai   威海	2,462   (+0.2%)	50.1 (-5.7%)	83.1 (+5.5%)	13.8(+3.8%)	16.8   (+4.6%)

Note: Figures in  (   ) represent year-on-year growth                 Source: Statistical Yearbook of Shandong

 

Major Economic & Technological Development Zones (ETDZs)

 

Five state-level ETDZs, tourism and holiday resorts and bonded trade zone are established in Qingdao, Yantai and Weihai.  In addition, Shandong has opened a hi-tech "belt" across the Shandong peninsula in the middle and southern part of the province with over 1,200 hi-tech enterprises.  The province has state-level hi-tech zones in Jinan, Qingdao, Weihai, Weifang and Zibo, and also provincial-level zones in Zaozhuang, Yantai, Jining, Tai'an, and Linyi.

 

Qingdao EDTZ（青島經濟技術開發區） : Established in October 1984 with the approval of the State Council.  Currently, there were 1,058 foreign-invested projects from 47 countries and regions with total investment more than US$2.6 billion.  Most overseas investments were involved in the fields of machinery, chemicals, building materials, property, tourism, trade, textiles and other light industries.  Investors from France, Sweden and Japan, have set up more than 1,100 businesses in the zone, with combined overseas capital of about US$2.2 billion.  Pillar industries in the zone include electrical home appliances, bio- pharmaceutical products, machinery and chemical fibers. 

 

Yantai EDTZ（煙台經濟技術開發區） : Established in October 1984 with the approval of the State Council.  Overseas direct investment are encouraged to invest in the fields of information technology, new materials, automotive parts, pharmaceuticals, bioengineering, machinery, electronics, computer, textiles, furniture, chemicals, rubbers and other light industries.  During the past few years, investors from the US, Japan, Germany and Republic of Korea, have set up more than 800 businesses in the zone with total investment of US$2.7 billion. 

 

Weihai EDTZ（威海經濟技術開發區） : Established in October 1992 with the approval of the State Council, the zone has established more than 10 small industrial development zones, including Hong Kong Investment Zone, Taiwan Investment Zone, South Korea Investment Zone, Chemical Development Zone, Textile Development Zone, Building Materials Development Zone, and Hi-tech Development Zone.  The zone welcomes foreign investors to invest in those hi-tech, high added-value, and pollution-free projects in the fields of electronics, light industries, textiles, chemicals, building materials, and food-processing industries.

 

Qingdao Bonded Zone（青島保稅區）: Established in November 1992 with the approval of the State Council, the zone implements more liberalised and preferential policies to attract foreign trade and investment.  Foreign investments are encouraged to invest in export processing, transit trade, storage, hi-tech projects, transport and international finance.  The zone has set up a gold, silver and jewellery processing park, an electronic industrial park, an export-oriented industrial area and area for the rubber processing industry. In Jan-Jun 2000, the zone approved 99 overseas-funded projects with contractual overseas investment of US$76.8 million. 

 

Qingdao Shilaoren Tourism and Holiday Resort Zone（青島石老人國度假區）, located at the eastern Qingdao, was approved to establish by the State Council in October 1992. With 12.5 km-long coastal lines and 2 km-long beach, the zone will be developed into a modern vacation and tourism centre.