East China's Shandong Province has outlined a blueprint to build the Jiaodong Peninsula into a manufacturing base to keep in line with the global industrial transfer trend.

"Building the Jiaodong Peninsula manufacturing base will greatly improve the province's comprehensive capacity and promote Shandong's active participation in globalization and international cooperation," said Shandong vice-governor Sun Shoupu.

Three cities, including Qingdao, Yantai and Weihai, will take the lead in building the manufacturing base.

The three cities are the most prosperous in Shandong and play an active role in the Bohai Economic Rim and in the Northeastern Asia economic zone.

The three cities cover 19 and 17 percent of the province's land and population respectively, while contributing 32, 62 and 68 percent of the province's GDP, foreign trade volume and actual utilized foreign funds. The three cities have a total of 2,552 kilometers of coastline, 18 ports, and two international airports.

By the end of July, the three cities had gathered more than 10,000 South Korea-funded enterprises and 2,247 Japan-funded ones, with actual utilized investment of US$11.4 billion and US$2.6 billion respectively. The region has become the most concentrated area for investments from the Republic of Korea (ROK) and Japan.

Daewoo Heavy Industries (Yantai) Co Ltd, funded with US$63 million by Daewoo Heavy Industries & Machinery Ltd (DHIM) from ROK, is one of the most successful ROK-funded companies there.

During the past decade, Daewoo Yantai has developed into the largest excavator manufacturer in China. It is also one of the top 100 taxpayers in Shandong and one of the top 10 taxpayers in Yantai. Last year it inked 4 billion yuan (US$484 million) in sales income.

Last July, DHIM invested another US$21 million to set up Daewoo Machine Tools Yantai Co Ltd, with designed annual output of 1,000 units of machine tools and a yearly sales income of 1 billion yuan (US$121 million).

General Manager Kenneth J Chae said Daewoo will invest another US$130 million in the next three years in China, and achieve expected annual sales income of 20 billion yuan (US$2.42 billion) by 2010.

Meanwhile, the Jiaodong Peninsula has groups of large domestic enterprises, famous brands and sound infrastructure to build its manufacturing base. Brands such as Haier, Hisense, Triangle Tyre, Qingdao Beer and Yantai Changyu are well-known both at home and abroad.

Haier Group in Qingdao is one of the most famous Chinese enterprises famous all over the world. With 29 kinds of products ranging from all kinds of home appliances to cell phones, integrated kitchens and pharmaceuticals, the global company achieved a sales income of more than 80.6 billion yuan (US$9.75 billion) in 2003.

Emphasizing new industries, intensifying technical innovation, broadening their opening-up and enhancing advantages are major measures being taken to boost the construction of the manufacturing base.

Within the manufacturing base, priority will be given to five industrial groups: traffic and transportation facilities, electronic information and home appliances, textile and garment, chemistry and pharmaceuticals and food processing.

(China Daily November 8, 2004)