Coastal areas look to seas to stabilize growth

BEIJING -- As the Chinese economy further slowed in the first half of this year, local authorities in coastal areas, which had once been the country's economic powerhouse, are turning to the sea for new growth amid the economic slowdown, according to plans recently released by local governments.

All local governments in China's eastern and coastal regions, except Shanghai, have unveiled investment plans to develop marine-related projects such as fishing, marine tourism services, shipping and offshore oil and gas exploration to stabilize local economies.

Local governments hope the so-called "marine economy" will contribute to a combined GDP of 7.05 trillion yuan ($1.11 trillion) by 2015, a goal much higher than the 4.55 trillion yuan seen in the marine economy last year.

For example, the richest province of Guangdong in southern China has planned 177 major investment projects in marine-related sectors, targeting an economic output of 1.5 trillion yuan by 2015, after its GDP expanded only 7.4 percent in the first half of this year.

The ambitious marine economy investment plans of local governments came at a time when the economy in export-driven regions like Guangdong, Shanghai and Zhejiang expanded at the slowest pace among the country's provinces, autonomous regions and municipalities.

"Without effective investments, it will be very difficult for us to meet the annual development goals," said an economic planning official of Zhejiang province.

He declined to be named as local governments' investment plans were sometimes criticized by the public as too extravagant.

The flagging exports in Zhejiang in the first half of this year also prompted the provincial government to look for other growth points.

The province's imports and exports increased only 3.5 percent from a year earlier in the first half.

"Under such a situation, the development of the marine economy can make up for part of momentum that exports used to offer," he said.

However, whether those ambitious plans will work in all regions remains in doubt.

Analysts believe many such identical plans will likely lead to redundant construction, a low-value chain and cutthroat competition between regions, as suggested in the shipbuilding industry.

China's shipbuilding capacity exploded since 2005 when investment flooded shipbuilders in coastal areas, causing serious oversupply in the market.

Data from the British shipping services company Clarksons Group showed that Chinese shipbuilders received orders to build 182 vessels in the first half of this year and 46 of them failed to produce a single ship last year.

Almost all major coastal cities, including Shanghai, Dalian, Qingdao, Guangzhou, Tianjin, Ningbo and Xiamen, have proposed in their investment plans to develop the marine facilities manufacturing, petrochemicals and steelmaking sectors by 2015.