Optimizing product portfolios, strategic industries, and manufacturing competitiveness

Shandong`s foreign trade has taken a quantum leap, especially its export-oriented economy, partly thanks to some provincial brand-building and innovative strategies, a Shandong commerce department official has said.

The province`s exports this year went above $100 billion, making it the third province to hit its goal. Total foreign trade amounted to $180 billion, so the total generated under the 11th Five-Year Plan (2006-2010) is close to $700 billion.

That puts Shandong among the top provincial economies, said Lu Zaimo, head of the Shandong Department of Commerce.

The province has 35 export-oriented bases - five of them, State-level - which gives it a competitive edge in research and development.

Exports of high-tech goods, as well as mechanical and electronic items, with backing from these bases, increased a considerable amount. Their proportion of total exports was up 11.7 percent.

The province`s software industry is attracting more attention abroad, thanks to a number of outsourcing parks and training centers. More than 600 companies there are involved in outsourcing services.

Shandong`s capital, Jinan, is one of China`s first group of cities chosen to represent the service outsourcing business. That sector is expected to do some $500 million in business this year and provide jobs for 10,000 college and technical school grads.

The province`s strong research abilities also help its companies promote themselves. Nearly 150 of its companies now have brands that are known abroad, including home appliance maker Haier, the China National Heavy Duty Truck Group Sinotruck, the Jier Machine and Tool Group, and Weiqiao Textile Co Ltd.

Haier has a 5.1 percent share of the global market in domestic appliances and has become a leader in this segment.

Sinotruck`s heavy duty trucks are exported to more than 30 countries and regions and exports for 2010 are expected to reach 14,000 units, putting it at the top of the Chinese heavy duty truck world.

China`s largest textile exporter, Weiqiao, did $1.69 billion in foreign trade in the first 10 months of this year, an increase of around 58 percent year-on-year.

Foreign-backed companies are another force behind the boom in exports, contributing more than 60 percent of the province`s total foreign trade.

These play an important role in the high-tech business, with foreign-funded company products accounting for 86 percent of the province`s total high-tech exports.

At lease 10,000 of the province`s trading companies have foreign backing.

Top ag-exporter

Agriculture is another area that is performing strongly as regards exports. Ag-exports were worth $10 billion this year, making Shandong the largest ag-exporter of all the provinces.

Authorities established quality and safety models for agricultural produce across the province, over the past three years, and helped move toward international standards, to ensure the quality of their peanuts, vegetables, fruits and aquatic products.

Shandong is now a major source of agricultural products for Japan and South Korea.

One of the big producers, the Longda Group, has more than 30 joint ventures with Japanese and South Korean partners. It generates at least $250 million from exports annually and is a popular Chinese brand.

Roughly 70 percent of the export-oriented companies are situated in industrial zones.

Two of the most popular trade centers are Qingdao and Yantai, which are home to bonded port areas.

Shandong has seven State-level economic development zones. The one in Yantai did more than $21 billion in foreign trade in the first three quarters of 2010, an increase of 36 percent year-on-year.

The Dongying economic zone, which joined the State-level ranks this year, saw a year-on-year jump of 150 percent, to more than $2 billion, over the same period.

"Shandong`s foreign trade has entered a fast growth period," Lu commented, by improving product portfolios, the growth of strategic industries, and competitiveness in the manufacturing.

Shandong is expected to generate $300 billion in foreign trade in 2015, with an annual average growth of 11 percent, Lu said.