Dalian looks for place under the FTZ sun

The governor of Liaoning has urged the central government to approve the Dalian Free Trade Zone as early as possible, in a bid to give the province an edge to diversify its trade.

Li Xi, the provincial governor, said: "The Dalian FTZ is designed not just as a copy of others, but one that is more regionally integrated, targeted, and differentiated in its own functions, backed by strong industrial foundation and strategic positioning vis-a-vis Japan, Russia, Mongolia, and the Korean Peninsula".

With the government keen on the "Revitalize Northeast China" campaign, setting up a free trade zone in Dalian, the international shipping center and regional finance center in Northeast Asia, can boost trade volume between regional markets and three of China's northernmost provinces and part of Inner Mongolia.

Liaoning was once a titan of China's heavy industry. At its peak in the 1970s, it was among the top three industrial centers with Shanghai and Tianjin. However, the province experienced slower economic growth since 2013, when it found it difficult to adapt to the structural reforms under the new market economy.

Because the proportion of State-owned enterprises is higher in Liaoning than in the majority of other provinces, Li said Liaoning will accelerate SOE reforms to let them expand globally, modernize their management and become more innovative with increased trading activities on the Silk Road Economic Belt.

The government will encourage more private companies to venture into telecommunications, energy and transportation infrastructure projects through the public-private partnership model, as well as in establishing manufacturing facilities in foreign markets such as Central Asia and Africa.

"The reforms will ensure quality and efficiency in economic growth ... and accelerate the economic structural adjustment. It will also improve SOEs' performance and help enhance their global presence," said Huang Taiyan, president of Liaoning University.

With China's exports slowing in the past two years, Huang said SOEs in Liaoning must realize that it is time to upgrade their industrial structures from low-end industries such as metallurgy, machine tools and raw materials to high-end products including industrial robots, aviation and offshore engineering equipment, as well as rely more on the Internet and automation to strengthen their export abilities.