Ports will help bring new tide of prosperity(2)

Circular economy

In industrial development, the environment and energy-reduction are always eye-catching factors, and become a problem for local authorities.

"For Caofeidian, one of the first operations in China's national circular economy demonstration area, economic growth and environmental protection are equally important," said Yang.

The key concept, the circular economy, focuses on the use of "waste" from one facility's manufacturing process, including energy and water, as input material for another facility. The idea is to realize a collective benefit larger than the sum of the individual benefits.

Yang said the theory behind Caofeidian's circular economy is that the concept is applied across a range of industries.

Shougang United Iron and Steel Co, a company with annual crude steel production capacity of 9.7 million tons, is a prime example of how the process works: "We use the coal gas, which is the waste from the steel-making process, for our power plants during electricity generation," said Yang Chunzheng, Shougang United's deputy general manager. "Then, the electricity can be used back in the steel mills."

Despite its huge appetite for electricity, the company not only generates 98 percent of its own power, but it can even offer some to the national grid on occasion, according to Yang.

"Meanwhile, seawater is used for once-through cooling in power plants and is then reused in the steel-making process after being desalinated.

"The steel slag will be delivered to cement plants or construction sites for use as a raw material."

In addition to the circular economy, the company spent 7 billion yuan, roughly 11 percent of its total investment, on environmental protection between 2007 and 2011, he said.

Wang Shuzhong, deputy head of the energy department, said,"You will not smell anything weird or notice any irritants in our factory."

Steel-related businesses, such as automobile manufacturers, are now opening factories in the district to reduce logistics costs.

In fact, Shougang will increase its output of steel sheets for automobile use in the next year as it follows the trend. "Our output of automobile-use steel products will increase by more than 60 percent to 500,000 tons in 2013," said Yang.

Optimistic outlook

Meanwhile, Huanghua port, China's second-largest coal exporting port, is located in Cangzhou city, 200 km from Beijing.

Despite the downturn in global trade, the port still achieved turnover volume of 115 million tons in the first 10 months of 2012 and it is expected to reach 118 million tons for the whole year, said Zhao Zhenqing, director of the Cangzhou Bohai New Economic Development Bureau.

"The port's economy is heavily reliant on international trade, therefore the European debt crisis and China's economic slowdown have made this a really tough year," he said.

The port mainly transports resources such as iron ore and coal for steel companies and power plants. The annual turnover volume of iron ore is about 18 million tons, more than half of which comes from foreign countries, including Malaysia and Indonesia, according to Zhao.

In 2011, the port had a total turnover volume of 116 million tons, with coal accounting for roughly 100 million tons.

Shenhua Group Co, China's biggest coal mining and trading company, built its own port in Huanghua because of the area's convenience for coal producing regions such as Shanxi and Inner Mongolia.

The company's completed first- and second-phase coal ports have a combined annual capacity of 70 million tons.

Construction of the group's third coal port, which has a capacity of 50 million tons, was completed in late November, raising the port's annual turnover of coal by 50 percent.

"As an important exit point for coal, the completion of the third phrase of the port will help to ensure the supply of fuel for power plants in southern China," Zhao said.

Construction of the fourth phase is scheduled for completion by the end of 2014, which will make Huanghua China's biggest coal port, according to Liu Fengliang, head of the production management center of Shenhua Huanghua Port Co.

"There are 1,700 sq km of land available for use in the port area at Cangzhou. That's attracted a lot of investors to the area," said Zhang Yong, a local government official.

At present, China Petroleum and Chemical Corp, China National Petroleum Corp and China National Offshore Oil Corp all have refining projects under construction, with a combined annual capacity of 21 million tons.

"We provide supportive policies to attract more investors," said Chen Tailong, director of Cangzhou Bohai New Area Management Committee Office.

He added that the projects currently under construction or discussion will require total capital of 901.3 billion yuan.

In Cangzhou, the major industries include petrochemicals, equipment manufacturing, new materials, new energy and logistics.

To attract more investors from home and abroad, the local government will invest 200 million yuan and provide around 67 hectares of land to build 10 national laboratories for research and development into industrial upgrading in different sectors.

"We hope that investors will discover opportunities and have the confidence to open their businesses here," said Chen. "As a local government, we try to provide better services to attract talent and to ensure they can always find a place in the industrial chain to make a profit or display their abilities."

In addition to economic development, Cangzhou is also working hard to build an eco-city, with 28 sq km of parks and woodlands.

The forest coverage has risen to 43.7 percent. That's equal to some of the best neighborhoods in San Francisco, the city in which Sun Yat-sen spent years preparing to change China, and where his statue still stands today.