Port city in the northeast hangs its fortunes on sea, rail and a lot more besides

The city of Yingkou has many ideas and plans up its sleeve, but there is one thing it is certainly not about to do: Put all of its attractive economic eggs into one basket. In fact the city of 2.5 million people in Liaoning province seems to be faced with an embarrassment of choice with the baskets at its disposal. If you lined them up and placed on each the name of a country with which Yingkou is forming strong business ties, the pecking order might look something like this: Germany, Russia, Romania, Poland, South Korea and Mongolia.

The eggs it has are not to be sneezed at either: Agriculture, chemical engineering, construction materials, electromechanics, metallurgy and manufacturing, to name just a few.

A panoramic view of Yingkou, Liaoning province.

Above: The beach resort in the city of Yingkou. Below: Yingkou Port. Photos Provided to China Daily

And just to ensure the right eggs land in the right baskets, the city can boast of a shipping port, railway connections with Europe, and a trade zone being built in Central Europe.

Bu Lanjie, director of the city's foreign trade and economic cooperation bureau, says: "This port city of ours has at its disposal transport such as sea shipping and rail, and we plan to harness both of these to extend our trade and other ties with the likes of Russia, South Korea, Mongolia and European countries on the route of the Belt and Road Initiative. That initiative is delivering many opportunities to cities like ours that aim to work more closely with overseas partners on their path to prosperity."

The city's foreign trade and economic cooperation bureau says that in the first five months of this year the city's international imports and exports were worth $2.76 billion (2.4 billion euros), exports accounting for $1.9 billion of that, 4.8 percent higher than in the previous year, and imports were worth $870 million, 24 percent less than the previous year.

Foreign direct investment was worth $43.4 million for the first five months of this year, and total contract volume of foreign investment from six newly approved companies was worth $48.5 million, 23.2 percent higher, year-on-year.

One of Yingkou's most important foreign investment partners is Germany. Investment from the country was worth $10 million in the first five months of this year, accounting for 23 percent of all investment.

Michael Clauss, Germany's ambassador to China, says there are many opportunities for collaboration between the two countries.

"Both are strong in manufacturing, so we can work together. There is a trend toward more collaboration between companies, with Chinese companies going to Germany and German companies coming here."

In Prahova, Romania, Yingkou Yuyuan Company is building the Liaoning Overseas Economic and Trade Cooperation Zone with an investment of $42 million.

"Zones like these aim to encourage investment from Liaoning companies," Bu says. "That will promote collaboration between the province and Eastern European countries such as Poland, Romania and Belarus in agriculture, construction materials and manufacturing.

"We are also supporting our companies in conducting mergers and acquisitions in European high-tech companies, and to set up research and development centers in Europe."

Liaoning's need to lift its economic performance becomes clear when you consider national growth figures. The National Bureau of Statistics says China's total GDP was worth about 29.7 trillion yuan ($4.65 trillion; 4.03 trillion euros) in the first half of this year, 7 percent higher than in the corresponding period last year. When those growth figures are broken down into provinces and other jurisdictions, Liaoning was dead last on the list, 2.6 percent.

While the northeast is an important center for grain production, heavy industry and energy resources, many of its cities face challenges brought by the depletion of those very energy resources and the need for heavy industry to restructure.

Yingkou, covering 5,402 square kilometers, has been doing some of the heavy lifting in an effort to revitalize the region, and in many respects it has been showing the way. In the first half of this year its GDP was worth 71.8 billion yuan, ranking it fourth in the province, and the growth was 4.3 percent year-on-year, putting it in top place. Last year, Yingkou's GDP was worth 159.1 billion yuan, 6.5 percent higher than the year before, again making it Liaoning's top performer.

One of the tools is it using to bolster such economic efforts is Yingkou Port Bonded Port Zone, 70 km from the city, which covers more than 5 sq km, and which sends out and receives containers heading for Europe by rail and ship.

Yin Dong, general manager of Liaoning Hongyun Logistics (Group) Co Ltd, says that the city's transport infrastructure gives it an undoubted advantage over other cities.

"The outstanding feature in this regard is the Yingkou-Manzhouli-Europe rail and the city's bonded zone," he says.

"When you add to this the city's strength in industries such as equipment manufacturing, it is not hard to see why we are well-placed to forge very close ties not only Europe but Asian countries as well. The impetus of the country's Belt and Road Initiative can only help Yingkou gain more international exposure and recognition."

The Yingkou-Manzhouli-Europe rail link opened in 2008, and now trains run five to six times a week, their final European destination being Hamburg, Germany. Manzhouli is in the Inner Mongolia autonomous region.

Luo Xingqing of the Liaoning Provincial Bureau of Foreign Trade and Economic Cooperation, which is responsible for matters relating to the Belt and Road Initiative, says: "In terms of cargo capacity, Yingkou Port ranked first among the country's coastal ports last year."

Over the past three years, the combined volume of sea and rail freight moved through Yingkou has risen 50 percent each year, he says.

"All but 7 percent of containers shipped through ports in Northeast China last year went through Yingkou, and the city's container handling accounted for more than half those handled nationally, making it No 1 in the country."

Yet there is still a lot of work to do, he says, and Yingkou needs to do more to draw on the global recognition that Liaoning enjoys as a result of its strength in equipment manufacturing.

Many companies in Yingkou are highly competitive in that field, and the industry dovetails nicely with the needs of countries along the routes of the Belt and Road Initiative.

"It ought not to be forgotten that the port of Yingkou links Liaoning with many domestic regions such as the Yangtze Delta," Luo says. "Add to these Japan, South Korea, Mongolia and Russia, and you can see how critical Yingkou port is in helping Liaoning become a logistics, trade and financial center."

Li Hezhong, chairman of Yingkou Port Co Ltd, says that while Yingkou forms part of the company's name, in fact it runs four other ports: Bayuquan, Xianrendao, Panjin and Suizhong, all located in Liaoning.

The company says it has assets worth 127 billion yuan and that it handled 330 million tons of freight last year. The company has ties with more than 50 countries and 140 harbors, Li says, and last year ranked 12th globally among logistics company's in terms of the amount of freight handled.

"We expected to be in the top 10 within three years," he says.

The company also runs Yingkou Bonded Logistics Center, the first of its kind in Northeast China.

"It is the only one located in the port area, with convenient customs clearance and providing efficient and rapid handling at a low cost," Li says.

To further promote business, in November, Yingkou port set up a joint venture with the e-commerce giant Alibaba called Yingkou Port (Hui) Network Technology Co Ltd.

Wang Dashan, leasing manager of the joint venture says Alibaba's collaboration with Yinkou port in global merchandising reflects "the strategic direction of Alibaba".

This will be an important part of Alibaba's cross-border import strategy, Wang says.

"Yingkou Port (Hui) Network Technology is a new type of Internet company focused on overseas growth. We will draw on Yinkou Port Group's resources and expand cross-border electronic commerce rapidly in many sectors, including food and snacks, beverages, beauty and cosmetics, mother and baby care products, fashion and accessories, groceries and digital."

Liu Yue, managing director of Yingkou Port (Hui) Network Technology, says that one key reason for Alibaba's choice of Yingkou as a partner is its transport assets.

"We also aim to develop business with the United States and Singapore in the near future."

There are local government financial incentives for overseas companies setting up operations, he says, and they will also get help with finding a location and customs clearance.

"With Yingkou port as its backbone, we are confident this company is going to do very well."

Contact the writers through huhaiyan@chinadaily.com.cn

(China Daily European Weekly 08/28/2015 page16)