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Coastal Region
Shandong
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| Key Information |
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| For more analytical studies of provincial data, please click on: "Monthly Data" or "Yearly Data" |
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| Introduction |
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| Located at Bohai Bay, in the lower reaches of the Yellow River and the east of the North China Plain, Shandong is a land with abundant agricultural and marine resources. With provincial rivers like the Yellow River, the Haihe River and the Huaihe River streaming through, Shandong province comprises mainly of low-lying lands and some mountainous terrains. |
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Shandong is the second largest economy in China, next only to Guangdong. |
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| Shandong is one of the most populous provinces in China, with a population of 93.1 million at the end of 2006. 99% of the population are Han Chinese, while the minority 1% consists of the Hui and the Manchus. |
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| Considered as one of the cradles of Chinese civilization, Shandong has a diverse history stretching to more than 5,000 years ago and is the birthplace of Confucianism (a way of living founded by the Chinese philosopher, Confucius). |
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| Ji’nan, the capital city of Shandong Province, is also renowned for its history and culture. Other major cities within the province include Qingdao, Yantai, Weifang and Zibo. |
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| Economic Overview |
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| Shandong is the second largest economy in China, next only to Guangdong. The province realized a gross domestic product (GDP) of RMB 2,207.7 billion in 2006, representing a growth of 14.8% from the previous year. Its per capita GDP was RMB 23,794. |
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| As seen in Figure 9.3.1, Shandong’s agricultural, industrial and service sector accounted for 9.7%, 57.7% and 32.6% of the overall GDP respectively. Industry contributes to more than half of the province’s GDP. |
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| In 2006, the annual per capita disposable income of urban households increased by 13.5% to RMB 12,192. This growing purchasing power has led to the widespread development of major commercial centers, mainly situated in the cities of Ji’nan, Qingdao, Weifang and Yantai. |
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| As seen in Table 9.3.1, nearly half of households’ expenditure is spent on food and clothing. This could possibly account for the increase in overall retail sales of consumer products by 16.3% to RMB 712.3 billion. Shandong was also ranked the second largest consumer market (among the 31 provinces in China), next only to Guangdong. Its consumer spending accounts for 9.1% of the national total. |
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| Shandong’s fixed asset investments grew by 19.6% from the previous year, amounting to RMB 111.4 billion in 2006. Among the various sectors, manufacturing accounts for the largest fixed asset investment, reaching RMB 534.72 billion (see Table 9.3.2). |
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| Industry |
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Shandong plays a significant role in China’s growing economy. In 2006, the value-added output of industry grew by 32.5% to reach RMB 261 billion. Table 9.3.3 shows the percentage of industrial output contributed to by the key industrial sectors in 2006. Food processing, raw chemical materials and chemical products, and textile industry lead the way with a share of 9.2%, 8.9%, and 7.4% respectively. Steel, nonmetal mineral products, ordinary machinery, and electric equipment and machinery follow with a share of approximately 5% each.
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| Shandong is rich in natural resources such as coal, petroleum, iron, aluminum, gold and oil. Coal mines are mainly found in the cities of Zibo, Zaozhuang, Yanzhou and Linyi, while intensive petroleum exploration is carried out along the Yellow River Delta. Gold is also produced in a substantial amount. Shandong produces approximately 26% of China’s gold, and China is the world’s fourth largest producer of gold. A famous gold producer in Shandong is Shandong Gold Mining Co. Ltd. It is the second largest China listed gold producer, behind Zhongjin Gold. |
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Shandong’s Shengli Oil Field is the second largest oil production base in China. |
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| Shandong is also a vital energy source in China. Shandong’s Shengli Oil Field is the second largest oil production base in China, accounting for a large portion of the national total. Extending over an area of 61,000 square kilometers in Northern Shandong, Shengli Oilfield produced 195 million barrels of crude oil in 2006. |
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| Other noteworthy industries within the province include the electronics industry, the automobile industry in the city of Ji’nan, the locomotive industry in the city of Qingdao and the cotton textile industry in Qingdao and Ji’nan. A renowned company in Shandong’s electronics industry is Haier Electronics, which controlled 26.6% and 16.3% of China’s refrigerator and air conditioner market in 2006. Higher retail consumption patterns have contributed greatly to the company’s success. In the same year, the production capacity of Shandong’s cotton industry was also recorded to have exceeded 1 million tons, representing a growth of 20.9%. |
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| At the end of 2006, Shandong had 93 products that were awarded ‘Chinese Famous Brand Names’, marginally behind Zhejiang and Guangdong. Some of these brands include Haier Electronics, Tsingdao Beer, Hisense Electronics and China Qingqi Motorcycles. |
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| Services |
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Shandong’s service sector contributed RMB 718.7 billion to the GDP, a growth of 14.5% from the previous year. As can be seen in Table 9.3.4, within the service sector, wholesale and retail trade made the most significant contribution with RMB 161.2 billion, followed by transport, storage and postal services with RMB 121.2 billion. As a major port province within the country, Shandong handled 470.1 million tons of freight in 2006. It should also be noted that the education sector, while not one of the key industries in Shandong, experienced the largest growth (21.7%) among the service industries, with a value-add of RMB 42.5 billion.
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| Foreign Trade and Foreign Investment |
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| The foreign trade environment in Shandong continues to display excellent growth. In 2006, overall foreign trade activities amounted to US$95.29 billion, growing by 23.9% from the previous year. Exports grew by 26.8% to US$58.65 billion, while imports increased by 19.6%, amounting to US$36.64 billion. |
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| Shandong’s major import source is South Korea, followed by the U.S. and Japan. Main imports include machinery, steel, equipment and technology. Trailing behind Japan, Korea, and the U.S., Shandong’s fourth largest trading partner is Hong Kong. Imports from Hong Kong were valued at US$536 million while exports to Hong Kong amounted to US$2,582 million. This represents an increase by 16.8%. |
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| In 2006, utilized FDI increased by 11.5% to US$10 billion. Shandong’s agricultural, industrial and services sector accounted for approximately 2.4%, 84.4% and 13.3% of the overall utilized FDI respectively. Table 9.3.5 shows the utilized FDI in Shandong by industry. Manufacturing had the highest amount of utilized FDI, at US$8.02 billion, followed by real estate, at US$683.9 million. |
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| Major Development Zones |
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| Qingdao Economic and Technological Development Zone (QETDZ) was among the first group of state-level development zones to be approved and established by the Country Council in 1984. Situated on the western coast of Jiaozhou Bay, the QETDZ development area spans about 220 square kilometers. Major industries within the development zone include high-tech household appliances, shipping, petrochemicals, building materials, pharmaceuticals and mechanical. |
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| Developed around providing port and industry, QETDZ has attracted a large amount of foreign investments. In 2006, QETDZ approved of 651 projects, of which, 214 were foreign-funded projects. Utilized foreign capital amounted to RMB 823 million and total investment in fixed assets reached RMB 19.7 billion. In 2006, the value of exports by QETDZ amounted to US$3.4 billion, while import value was reported to be at US$3.8 billion. |
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| Another notable development zone in Qingdao is the Qingdao High-Tech Park (QDHTP). Approved by the State Council as a state-level high-tech park in 1992, the total development area spans approximately 58 square kilometers, located at 17 kilometers from the Qingdao International Airport. There are three subsidiary zones within the high-tech park, namely, Electronic Information Zone, Bioengineering Zone and the New Materials Zone. Major industries in QDHTP include consumer electronics, information and communication technology, bioengineering, new materials, as well as other advanced technologies. Within the park, there also resides renowned colleges such as Qingdao University and Qingdao Maritime University. |
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| Yantai Economic Development Area (YEDA) is yet another development zone in Shandong. It is one of the first few national development zones approved by the Chinese Central Government. Located in Yantai, along the Shandong Peninsula, the development zone has a land area of about 16 square kilometers, and is strategically centered between the important of Beijing, Shanghai and Seoul. Major industries within YEDA include machinery, automobile and auto parts, electronics and pharmaceutical. |
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| Established as a foreign-oriented industrial zone, YEDA has attracted many foreign companies such as General Motors, Hyundai and Asahi Kasei. In 2006 alone, YEDA gave approval for 353 projects, of which 105 were foreign-funded projects. Utilized foreign capital was at RMB 445 million and export and import values were reported to be US$4.11 billion and US$3.72 billion respectively. The total investment in fixed assets amounted to RMB 26.9 billion and the added value output of industrial enterprises reached RMB 28 billion. |
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| Education |
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| In 2006, there were a total of 109 tertiary institutions in the Shandong province, with an enrolment of 1.34 million students. A key university to note would be the Shandong University in Ji’nan. This university is the second national university founded in China, and focuses on engineering and scientific research, while offering academic disciplines in philosophy, economics, law, literature, history, natural sciences, management and medicine. |
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| Major Cities in Shandong |
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| Shandong has 17 cities altogether – Qingdao, Yantai, Ji’nan, Weifang, Zibo, Ji’ning, Dongying, Linyi, Weihai, Tai’an, Dezhou, Liaocheng, Binzhou, Zaozhuang, Heze, Rizhao, and Laiwu. Table 9.3.6 shows the ranking of these cities by GDP. |
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| From the table, it can be seen that Qingdao, Yantai, and Ji’nan are the three cities that have the highest amount of GDP in Shandong. The next subsections will provide a brief overview of two of these cities – Ji’nan and Qingdao. |
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| Ji’nan |
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| Introduction |
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| Ji’nan, a sub-provincial city and the capital of Shandong province, is the province’s political, economic and cultural center. Located in the western part of the center of the province, Ji’nan has a total land area of 8,180 square kilometers and a population of more than 6 million. |
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| Investment Climate |
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| In a bid to enhance its economic climate, Ji’nan’s government has been placing much effort in the development of its key industries, such as mechanical metallurgical products, heavy duty vehicles, electronic products and appliances, as well as chemical products. As a result, Jinan’s industry sector grew by 17.2% in 2006, totaling RMB 100.2 billion and accounting for 44.7% of the city’s economic growth. One of the leading industrial players in the city is Ji’nan Iron and Steel Company, a manufacturer of iron and steel products to domestic and overseas market. The company produced 7.71 million tons of steel and 4.96 million tons of steel products in 2006. Within the automobile industry, a key player is Sinotruk. Based in Ji’nan, Sinotruk is the leading heavy-duty truck assembler within the country. As a result of growing sales, the company reaped a net profit of RMB 224 million in 2006. |
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| Foreign Investment |
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| In 2006, Ji’nan’s utilized FDI grew by 24.2% from the previous year, reaching US$634 million. Known as a base for many domestic and international software companies, Ji’nan has attracted 33 of the top 500 global companies. In 2006, Ascendas China entered into an agreement with Ji’nan High-Tech Industrial Development Zone to build a Singapore Software Park. In addition, Ascendas participated in another project to develop the Ji’nan Software Park. Apart from the Ji’nan Software Park, Qilu Software Park has also attracted foreign investors such as NEC. In 2006, the software companies in Jinan provided many outsourcing services and realized a total export volume of US$31 million. |
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| Important Travel Information |
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Time taken to get from Ji’nan International Airport to:
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- Beijing
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55 min
1 hour 20 min
2 hours 15 min
2 hours 40 min |
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| Qingdao |
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| Introduction |
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| Qingdao is a sub-provincial city situated in the east of Shandong province. In 2006, the city’s GDP reached RMB 320.7 billion, increasing by 15.7% from the previous year. Comprising of 12 county level divisions, 7 districts and 5 county level cities, Qingdao has an area of 10,654 square kilometers and a population of more than 7.3 million. |
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| Investment Climate |
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| The largest city within the province, Qingdao is an open port city and a major economic center. Key industries within the city include the electronics industry, the brewery industry, as well as its port activities. Haier Electronics Group and Hisense Electronics Group are the predominant Chinese players within the electronic industry. In 2006, Haier Electronics reported sales of US$15 billion within the domestic and overseas market. |
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Due to its geographical location, Qingdao has also developed into a major trading port. In fact, it is the second largest external trading port in China. Qingdao’s ports handled the largest volume of freight as compared to the other coastal ports in the province in 2006, at 22 billion tons, accounting for nearly half of Shandong’s overall freight volume. Meanwhile, container handling exceeded 7.7 million TEUs, increasing by 22.1% from the previous year.
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| Foreign Investment |
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In 2006, Qingdao’s utilized FDI reached US$3.1 billion. A total of 64 overseas enterprises made investments into the city, thereby making Qingdao the city with the largest overseas investment within Shandong.
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| Known especially for its port, Qingdao attracted seven Fortune 500 companies to establish subsidiaries within the city. These companies include Mitsubishi and ABB. Driven by the boom in the port activities, the Qingdao Economic and Technological Development Zone attracted more than 90 Fortune 500 subsidiaries. |
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| Important Travel Information |
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| Time taken to get from Qingdao International Airport to: |
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- Beijing
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1 hour 10 min
1 hour 5 min
3 hours 5 min
1 hour 20 min |
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