As part of its commitment to maintaining a vibrant and cohesive development strategy, the provincial government of Shandong has unveiled a far-reaching program aimed at stimulating 10 of its key industries.

Under the terms of the plan, the 10 industries - steel, automotive, shipbuilding, chemical, light industry, textiles, nonferrous metals, equipment manufacturing, electronic information and modern logistics - will undergo a major restructuring operation in order to ensure their ongoing competitiveness.

In terms of the steel industry, the local government masterplan sees a series of mergers and acquisitions culminating in the formation of one mega-company in the sector and between three and five smaller operators. The blueprint envisages that the restructuring will be completed by 2015 when production in the sector will top 50 million tones annually.

In the automotive sector, the local government envisages the development of between eight and 10 large competitive groups, supported by a substantial number of innovative auto part suppliers and manufacturers. Companies within the sector will be encouraged to enhance their research and development capacities, with a particular emphasis on producing more energy-saving and environmental-friendly products.

Chemicals

The chemical industry will switch its focus onto the production of products such as tyres, petrochemicals, coal-based chemicals, and fertilizers. Several large chemical industry parks will be established in the coastal areas of Shandong and Zibo.

In terms of light industry, local government projections predict sales revenue rising to around 230 billion yuan by 2011 with subsequent annual increases in the area of 12 percent.

Across the board the sector will be encouraged to strengthen its investment in R&D facilities, whilst the local government will also seek to establish five State-level and 30 provincial-level technology centers with the ultimate aim of creating 50 new global brands.

Within the textile industry, the cities of Qingdao, Yantai, Weihai, Zibo and Weifang are expected to become the province's most important textile and garment production bases. Local businesses will also be encouraged to cooperate with international companies and access global markets through both acquisition and joint ventures in overseas regions.

In the nonferrous metals industry the proposals see the formation of three large aluminum groups, each with a sales revenue of more than 10 billion yuan. It also envisages the establishment of three copper groups, each with an annual revenue over 6 billion yuan by the year 2011.

Equipment manufacturing

As one of Shandong's existing key sectors, the industrial output value in the equipment manufacturing industry is planned to increase by around 350 billion yuan by 2011. This will be achieved through incremental growth of 15 per cent over the next two years. Ultimately, the proposals see total sales revenues from the sector topping 1.5 trillion yuan in 2011, with an annual growth rate of 20 percent

This growth will be facilitated by the establishment of around 10 State-level and 80 provincial-level R&D centers, with the industry's innovation capacity substantially upgraded.

The equipment manufacturing industry will see the formation of at least one vastly-resourced company with an annual business revenue of around 100 billion yuan. The plans also allow for three other large companies in the sector, each with revenues of between 10 and 30 billion yuan.

In the shipbuilding sector, by 2011 the production capacity of ocean-going ships, river ships and marine engineering equipments is estimated to reach 6 million deadweight tons (dwt), 1 million dwt and 500,000 dwt respectively.

Home to well-established brands, such as Haier and Hisense, Shandong is already famous throughout the country for its electronic information industry. The local government is looking to develop the sector still further by encouraging enterprises to develop their resources in a number of fields, including intelligent household appliances, computers, integrated circuits, mobile communications, Internet, digital radio and television.

In terms of the logistics industry, the local government expects to see a flourishing sector with 100 large logistic enterprises, capable of providing international services, in place by 2011.

(China Daily 06/18/2009 page24)