Pingdingshan Coal Mining Group and China Shenma Group are two pillars that hold up the coal chemical industry of Pingdingshan City – Pingdingshan Coal Mining Group ranks 222nd among national top 500 enterprises and ranks 4th among the top 100 enterprises in Henan in terms of overall industrial strength; and China Shenma Group is one of the three largest cord fabric producers in the world.

"In the next few years, Pingdingshan will give stress on the construction of six major projects including the 1000KTA methanol project of Pingdingshan Coal Mining Group, as well as the 200KTA nylon-66 salt project of China Shenma Group,” an official of Pingdingshan Development and Reform Commission told the reporter.

Coal is an important chemical raw material and salt is dubbed “mother of chemical industry”. By relying on its abundant salt reserves, Pingdingshan came out with a bold idea of building “a nationally important salt chemical industry base” – vigorously developing ion film caustic soda, PVC resin and downstream products and realizing 20 billion yuan of sales revenue from salt chemical industry by 2010.

As a matter of fact, the salt chemical industry of Pingdingshan is on the eve of “explosion” – large state-owned enterprises like Pingdingshan Coal Mining Group and China Shenma Group have showed a strong presence, a private enterprises Henan Huiyuan Company based on Lushan County is seizing the market, and salt enterprise CNSIC Haolong Salt and Chemical Co., Ltd. is quickening its development of salt chemical industry. The frequent actions of these backbone enterprises make this industry thriving.

On the afternoon of July 21, the reporter saw in CNSIC Haolong Salt and Chemical Co., Ltd. in Yexian county that modern equipment was turning the salt resource buried deep in the ground into wealth on the ground, and beyond a wall was Henan’s largest salt distribution center under construction.

To the east of Xunan Highway and south of the Shahe River, the coal and salt chemical industrial clustering zone that carries the dream of Pingdingshan for becoming a “chemical city in the center of China” was under intense construction. Pingdingshan Coal Mining Group and China Shenma Group both have established their presence here.

"In the 11th five-year period, the coal and salt chemical project with planned investment of above 20 billion yuan will greatly elevate the industrial level of Pingdingshan City,” said Pingdingshan Mayor Zhao Qinglin.

Coal, power, water and salt, these rich resources endowed by the nature to Pingdingshan are mutually integrated and promoted in an almost perfect momentum along with the development of salt chemical industry.

There are countless chemical products generated from the combination of coal and salt. Regarding coal and salt chemical industry as an alternative industry is equal to getting a gold key for sustainable development. The development of a coal and salt chemical industry base may be reckoned as a milestone of the history of Pingdingshan’s industry.

Colorful image of “black and white economy”

"Black” and “white” are the most classical colors of Pingdingshan, but obviously “black and white” alone can’t hold up the future of the city. Facing Pingdingshan, this huge picture scroll of 7882 square kilometers, in order to create a wonderful painting, the “painter” has to use all kinds of colors.

As early as 2001, Pingdingshan Municipal Party Committee and Government explicitly proposed for fostering and developing eight industrial bases and making all-out effort to create new industrial advantages.

It is another way for economic transformation of a resource-based city: horizontal transformation and development of new industries.

Today, while coal industry keeps expanding, the electric power, chemical, iron & steel, cement, electromechanical, well salt, textile, bio-pharmaceutical, medical equipment, electrical appliances and instruments, agricultural and sideline products processing industry and other non-coal industries also have made great headway in Pingdingshan and some new economic growth poles and advantageous industrial clusters have been formed.

Pingdingshan has planned seven industrial clusters to promote the leap-frog development of its industrial economy: iron & steel industrial cluster, coal and salt chemical industrial cluster, electromechanical industrial cluster, coking industrial cluster, textile industrial cluster, cement industrial cluster and iron kettle cluster.

The iron & steel industrial cluster in Wuguang city is the best developed industrial cluster in Pingdingshan and has formed an integral industrial chain from mining to steel plate processing and production of auxiliary materials. "Wugang” brand steel plate produced by Wuyang Iron & Steel Co., Ltd. is the top brand of wide and thick steel plates in China. The steel used in the central location of Beijing Olympic Stadium – the Bird’s Nest is of "Wugang” brand.

The officials of Pingdingshan admitted other industrial clusters had a weaker foundation, smaller aggregate, lower development speed and fewer influential brands, compared with the iron & steel industrial cluster.

However, in the counties (county-level cities) of Pingdingshan, the reporter was overwhelmed by the boom and vitality of characteristic industries.

Jiaxian county is the largest iron kettle production base in China and contributes one third of national total output. Its products are sold far to Japan, South Korea, Russia and other countries.

Ruzhou Tianrui Group is the largest cement producer in Henan. All of its production lines are the most advanced dry-process cement production lines. Its aim is to ascend to the rank of top ten in Chinese cement industry.

Yinlong Group in Wugang city is the largest private textile enterprise in Henan. Its “Yulong” brand yarn is sold well in more than ten provinces and cities in China. Its finished products are exported to the USA, Japan, South Korea and other countries.

The production of motor tricycles has reached a scale in Yexian county. The motor tricycles produced by Pingdingshan Loncin Motorcycle Co., Ltd. command a good market in more than 20 provinces and cities in China and are exported to the Southeast Asia and Africa.

The new-type wall material industry is rising quickly. There are more than 200 enterprises. Pingdingshan discharges about 4.6 million tons of coal refuses and 2.1 million tons of fly ash a year. The cumulative deposit reaches 140 million tons. These industrial wastes in the past are becoming treasures under the guidance of “cyclic economy”. It is estimated that by 2010, new-type wall material will reach 4 billion standard blocks.

The six “industrial name cards” of Pingdingshan are Pingdingshan Coal Mining Group, China Shenma Group, Pinggao Group, Wuyang Iron & Steel Co., Ltd., Yaomeng Electric Power Co., Ltd. and Tianrui Group. If we say these giant enterprises make more contribution to “public finance”, then we may say those rising characteristic industries make more contribution to the “wealth of the people” and make the structure of the industrial economy more reasonable in the city: state-owned enterprises and state-controlled enterprises still play a dominant role in important industries and key fields, but private economy is growing vigorously.

Operate “resources” with “wisdom”

If a city doesn’t have resources, it must have wisdom in order to develop. If a city has ample resources and consciously operate resources with wisdom, its prospect will become limitless.

Yan Shubin, the Director of Pingdingshan Development and Reform Commission, thinks Pingdingshan is learning to operate resources with wisdom. He owes this to the great “sense of direction” of the city’s helmsmen and their clear knowledge on the correct direction of the city.

The tragedy that some Chinese resource-based cities went downhill when mines were exhaust shall never happen in the “eagle city”. The people in the eagle city became conscious of this problem early and acted early against this problem.

Since early 1980s, they have quickened the pace of economic transformation, vigorously developed non-local industries and gradually optimized industrial structure. The development orbit of Pingdingshan may be reckoned as a model for economic transformation of a coal city to some extent.

A Chinese scholar studying the economic development of resource-based cities thinks a resource-based city shall follow three principles during economic transformation: it shall develop itself based on national functional orientation to the city; it shall make use of unique local resources to develop characteristic industries; and the market shall have the final say on what industries should be developed.

In the Outline of the Overall Development Plan for the City Agglomeration in the Central China, Pingdingshan is described as follows: it is an important support city in the southwest of the city agglomeration in the Central China, its basic orientation is “a chemical city in the central part of China, and a chemical, energy, raw material, power equipment manufacturing base of the city agglomeration in the Central China.”

The outline indicates “active effort shall be made to foster a Luoyang – Pingdingshan – Luohe industrial belt”, and energy, coal chemical, iron & steel, salt chemical and building material industries shall be mainly distributed on the two sides of Luonan Expressway. The key city the outline relies on is Pingdingshan.

At present, the Luoyang – Pingdingshan – Luohe industrial belt has taken shape. This industrial belt has rich resources, prominent advantageous industries and good foundation of urban industry and county economy – a few counties and cities under Pingdingshan, most of which ranked ahead of the average among 108 counties (cities) in Henan in 2005.

Following the perfection of the transportation system and the accelerated development of energy and heavy chemical industries and agricultural and sideline product processing clustering zones, the Luoyang – Pingdingshan – Luohe industrial belt hopefully will become another industry concentrated area in the city agglomeration of the Central China.

A resource-based city shall transform itself from a resource dependent city into an innovation driven city. In a buyer’s market, a decisive role on what should be developed is whether the product has a market other than whether it has local resource. Everything shall center on market demand.

A plan and layout of the energy, coal chemical, iron & steel, salt chemical, building material, agricultural and sideline product processing and other industries shall be worked out.