Transcript Liaoning: Prospects for Indiana & ISU

A Primer on the Region
Jay D. Gatrell
John Conant
•Geographical Context & Weather
•Local Economy
•Finally….
Geography
•Liaoning province is located in Northeast China and is home
to over 42,000,000 residents
•Major Cities
• Shenyang (over 7 million residents)
• Dalian (over 5.6 million residents)
• The port at Dalian has increasingly been recognized as the primary
gateway to Northeast China
• Anshan (over 3.5 million residents)
Geography
• Locational advantages
relative to Dalian’s Port…
• Koreas & Japan
• Access to NE and Central
China
Dalian Port
Train to Beijing
Weather
Dalian
Highs Mid to Upper 40s
Lows Upper 20s-Lower 30s
Beijing—Slightly Colder than Dalian
Highs Upper 30s-Upper 40s
Lows Mid to upper 20s-Lower 30s
Economy
•The province is China’s 8th largest economy in GDP and ranked 8th per
capita (2003)
•Over 32,000 firms
• 1587 large to medium firms
• 85% privately held
• 5.3% of firms include FDI
•Shenyang ranked 11th nationwide on a city survey of overall economic
competitiveness (2005)
•Liaoning Province is China’s largest and most significant heavy
manufacturing base. The region’s industry is dominated by machine
tools, metals, chemicals/petrochemicals, electricity, and refining.
Additionally, the province has a growing electronics industry
• Specialized metals produced for engines and advanced machine tools
Economy
Agriculture
• Provincial agriculture is known for
specialty fruits including apples and
peaches—as well as soybeans,
cotton, silk and maize
• $550 million USD earmarked by
provincial government to expand
agricultural infrastructure
• Anticipates importing 1000 variety of
crops to supplement the local market
in 2005
• Potential for Indiana exports
Traditional Farming in Liaoning
Economy
•Liaoning home to over 120 automotive
firms associated light trucks and
large/medium passenger vehicles
• Strategic investments and collaboration
with GM, BMW, Mitsubishi, & Toyota
• Shenyang’s JinBei Motor Company is a
affiliated firm of China’s largest automotive
firm, Chengchun
BMW Brillance-JinBei
Operations in Shenyang
Economy
Industrial Clusters by Major City
• Shengyeng: Machinery, Chemicals,
Pharmaceuticals, Automotive, &
Metals
• Dalian: IT, Automotive, Electronics, &
Biotechnology
• Anshan: Steel, Petrochemicals, and
Advanced Materials
Dalian’s Zhongshen Square
Economy
• Robust Economic Indicators
• Large market with higher levels of GDP and GDP per capita compared to special
economic zones in the south--Guangxi, Fujian, Hainan
• Economy continues to expand
• Eagerness to work with foreign firms and unmet demand for FDI relative to more
developed regions
• A key issue as FDI growth across China reached a plateau in early 2005
• Potential for more aggressive economic development packaging
• Fewer potential suitors
Economy
Extractive Industries
• Coal
• Iron ore
• Salt
Integrated Mining & Processing facility
near Anshan
Indicator
Liaoning
Shenyang
Dalian
Gross Regional Produce (10,000 yuan)
16,033,795
16,325,900
Gross Industrial Output Value (10,000 yuan) Current prices
10,643,612
15,468,641
5,568,516
4,065,425
14,229,575
13,101,986
1,521,548
1,442,215
Total Investment in Fixed Assets (10,000 yuan)
Savings Deposits (10,000 yuan)
Total Wages of fully employed workers (10,000 yuan)
Gross Output Value of Farming, Forestry, Animal Husbandry, and
Fishery (100 million yuan)
1215
Foreign Funded Industrial Enterprises (100 million yuan)
Number
1488
Gross Industrial Output Value
1451.01
Value Added of Industry
388.9
Total Capital Held
595.48
Total Assets
1611.2
Total Circulating Funds
830.92
Foreign Direct Investment (USD 10,000)
341,168
Total Value of Imports (USD 10,000)
1,192,982
Total Value of Exports (USD 10,000)
1,457,935
Finally…
Liaoning is relevant
• Dalian is “China’s Flat City” (Friedman 2005)
• Region a major outsourcing venue for
Japan
• Capacity for growth in Beijing & Shanghai
inherently limited and infrastructure in
province can meet demand
• Major foreign firms (including GE, Dell,
Sony, SAP, & HP) have already began to
redirect investment to cities such as Dalian &
Shenyang
Sources
CIA. 2005. World Factbook. http://www.cia.gov
Friedman, T. 2005. The World is Flat. A Breif History of the 21st Century. New York:Farrar, Straus
and Giroux.
Indiana Economic Development Corporation. Industry specific initiatives.
http://www.in.gov/iedc/initiatives/
Indiana State University, Office of Public Affairs. Various dates. LNNU Partneship Press
Releases.
Ministry of Science and Technology, People’s Republic of China. 2005.
National Bureau of Statistics, People’s Republic of China. 2003. Liaoning Economic Data.
Northeast Network, http://english.nen.com.cn
US-China Business Council. 2004. 2004 China Briefing. http://www.uschina.org
U.S. Department of Commerce, China Business Information Center. 2005.
Wang, C. 2006. Beijing is coming apart at the seams. Dalian News. January, 6.
http://Daliannews.com
Wu, C. 2003. 2003. China, Peoples Republic of Market Development Reports China Logistics
Profile. A report prepared for the U.S. Department of Agriculture.