Business Internet China - Dalian, Changchun, Harbin, Qingdao & Yantai

Mar 12

Dalian, Changchun, Harbin, Qingdao & Yantai

Reproduced with kind permission of China Briefing magazine

Dalian
– crown-jewel of the north-east

The city’s combination of surrounding hills, blue water and bracing winds, and lots of heavy engineering, reminds you of Northern Europe. But this is no quiet fishing village. It is a modern, well run city – the streets are clean and the facilities top-class, with an educated and reasonably affluent young population able to support international shopping outlets such as Carrefour. Thirty minutes from the railway station on a swish new light rail system takes you north to the Dalian Development Area – not just a development zone, but a whole new town that has emerged in 20 years.

Dalian is an excellent location for businesses involved in metal and lumber processing, component parts consolidation and distribution. The quality of life here is excellent according to both locals and expats. Nevertheless, it is beginning to become more. For manufacturing facilities it is probably better to look further north where land and labour are much cheaper – although off set against that are the educational issues and quality of life. You must consider Dalian when assessing manufacturing operations in China and the region as a whole. It is possibly the only choice if wishing to service the auto, rail and shipping industries domestically.

Long a home for Japanese and Korean investors, Dalian’s proximity to the large industrial heartland of China's north-east make it strategically vital to the region. About 30% of the foreign investment in the city comes from Japan. And the city has friends in high places - the current Minister of Commerce, Bo Xi Lai, is from Dalian and was mayor until 2000, when he was promoted to provincial governor, before going to MOFCOM.

Changchun
– China’s car city

Changchun means cars. The city’s most famous enterprise, First Automobile Works, created China’s very first road vehicle, the “Jiefang” truck, in 1956. FAW now covers an enormous area stretching for many square kilometres in the Changchun Auto Economic Trade Development Zone, and has a huge JV with Volkswagen. There are in all three major development zones, with gleaming new commercial palaces have been thrown up alongside factories housing big foreign companies (although the FDI numbers remain small by comparison with elsewhere). You walk out of city centre hotels and find an Armani outlet, Parkson’s, Walmart and any number of other glitzy foreign outlets.

But arriving in the city by train you still pass through extensive, rather grimy suburbs. The term “rustbelt” easily springs to mind. Old, derelict factories abound. Snokestacks spew steam. Long train-loads of coal rumble past. Downtown, groups of middle-aged men, probably unemployed SOE workers, sell clothes, a few mobile phones and other knick-knacks on street corners. The backstreet housing is elderly and grim, reminiscent of the worst of European social housing from the 1960s. Local transportation, for coal, rubbish and general goods, still includes a fair number of carts drawn by stocky little horses. The city is something of a place of contrasts.

However, positioned close to the major port of Dalian, but with significantly lower overheads and a reasonably skilled labour force, Changchun represents good value for money for manufacturing industries using steel or in the automotive and shipping industries and their related sub-industries.

Harbin
– snow city, shopping mecca

The city was in the global news in late 2005 for all the wrong reasons, following the benzene spill into the Songhua River from a local petrochemical factory. It now faces a major challenge to re-establish its reputation and attractiveness as a tourist destination.

Although Harbin does have some major manufacturing industries, a quick wander around the city centre reveals that it is even more important as a shopping and tourism centre serving well-off visitors from Japan, Korea and Russia. Tourism revenue in 2004 was RMB22.5bn, with about 10% coming from overseas visitors.

Top brands such as Lane Crawford now line the streets of the main shopping street, while many Hong Kong and Japanese outlets are also here. A new shopping centre called Euro Plaza is nearing completion, and others are building. A giant Wanda shopping mall opened in 2005 on the banks of Songhua, and there is a Warner Brothers multiplex cinema. There is also a Parkson, a Wal-Mart and a Metro, and any number of shops selling assorted Russian souvenirs of varying quality.

Harbin however given it’s proximity to Russia is a great source for lumber and construction industry woods as well as a base for furniture manufacturers, especially given its links to China’s massive rail network giving access to China, Russia, Japan and Korea.