Zone aims to better use ocean resources

Container terminals in the Qingdao West Coast New Area. Provided to China Daily

Qingdao's West Coast New Area will boost maritime innovation

Entrepreneurs in the coastal city of Qingdao, Shandong province, are contemplating a boost to their businesses after the launch of China's newest development zone, the Qingdao West Coast New Area. The zone will act as a base for offshore exploration and will promote innovation in China's maritime sector.

"We have signed agreements with a company in Hong Kong to sell three of our mobile offshore accommodation platforms at a price of around 100 million yuan ($16 million) each," Zhu Shengkai, deputy general manager of Qingdao Haixi Heavy-Duty Machinery, says at a shipyard on the western shore of the city.

"We have invested tens of millions of yuan in the research and development of maritime equipment, and manufactured mobile offshore accommodation platforms for the United Arab Emirates and Saudi Arabia," he says. "Actually, all of our offshore platforms were bought by people and companies overseas."

Zhu spoke during a visit to a half-constructed accommodation platform that is being built for a Panamanian buyer. Workers were busy installing and testing equipment on the 50-meter-tall structure.

"The size and height of this kind of platform is tailored to the clients' requirements. This one can move at 11 kilometers an hour on the ocean. It can hold a helicopter and enough supplies to maintain operations and workers for up to three months away from land," Zhu says.

The dock was dominated by heavy-duty gantry cranes and other maritime equipment, all lined up in rows prior to being shipped to buyers.

"I am fully confident about my company's future because the establishment of the New Area indicates the central government's determination to promote the maritime industries," Zhu says.

China Shipbuilding Industry Corp, one of the nation's biggest shipbuilders and the parent of Haixi, has moved some of its research institutions and manufacturing facilities to the New Area, signaling that the shipbuilding conglomerate is eager to take advantage of the development of the project, according to Feng Cheng, assistant director of the corporation's 712 Institute, which developed China's first marine electric propulsion technology.

Feng says the favorable policies in the New Area will allow the institute to allocate more resources for creating more advanced propulsion systems, adding that the company has delivered the first domestically developed electric propulsion system for ships along Qingdao's coast, and is building a facility to research, produce and experiment with advanced high-power engines.

Feng's optimism was shared by Liu Jisheng, deputy general manager of Qingdao Luhaifeng Food Group, the city's largest fishing operation.

"The central government has become more attentive to the maritime industries and the ocean economy, significantly injecting momentum into our business expansion," he says, adding that the group is planning to build an ultra-low-temperature storage facility with a capacity of 100,000 metric tons.

It also plans to work with local travel agencies to promote fishing and diving tours, and has started an ambitious project to form a chain of fishing-related enterprises in the Indian Ocean.

Liu Cigui, head of the State Oceanic Administration, says the new zone will strengthen innovation and the role of businesses in China's new maritime strategy.

"The marine industries are an important pillar in the development of a maritime power," he told a forum in Beijing in May. "By setting up zones focused on the marine economy and raising specific funds, we will help businesses gain a bigger say in the nation's endeavors to upgrade maritime technology."

Last week, he told reporters that China would go further and deeper into the ocean to expand the country's maritime interests.

The importance of the move is indicated by its inclusion in one of the government's most important documents: the report to the 18th CPC National Congress, held in November 2012, which will guide the nation's direction in the coming years.

The report stipulated: "We should improve our capacity to exploit marine resources, develop the marine economy, protect the ocean environment, resolutely safeguard China's maritime rights and interests, and build China into a maritime power."

The premier

In a speech at a maritime forum in Athens on June 20, Premier Li Keqiang said the ocean has played an indispensable role in the history of Chinese civilization and helped forge connections with other nations.

"China is willing to work with other ocean-driven countries to forge partnerships in oceanic affairs," Li told the audience. "We will join hands in opening maritime routes, developing ocean economies, exploiting the resources, and exploring unknown parts of the ocean."

In June, the State Council, China's Cabinet, approved the establishment of the New Area in the Huangdao district of Qingdao.

In the development plan for the area, the National Development and Reform Commission says it will "pilot innovation in marine technology, serve as a strategic base for deep-sea and offshore exploration, and become a pioneer in international cooperation for the marine economy".

The New Area, on the west coast of Jiaozhou Bay, covering 2,096 square km of land and about 5,000 square km of ocean, is the second National New Area dedicated to the development of the maritime industries, following the Zhoushan Archipelago New Area in Zhejiang province, established in 2011. It's expected to be ranked third in terms of annual gross product among China's nine national new areas, after the Tianjin Binhai New Area and the Pudong New Area in Shanghai.

Wang Jianxiang, Party chief of the Qingdao West Coast New Area, says the territory lies between the Beijing-Tianjin-Hebei cluster and the Yangtze River Delta Economic Zone, and is at the eastern end of the Eurasian Land Bridge, the overland rail link between East Asia and Europe, which provides a "superb geographic advantage".

The fact that Qingdao has seven national-level oceanographic research institutes, including the Ocean University of China, will add momentum to the area's sustainable development, Wang added, noting that the city is also home to China's only manned deep-sea submersible, the Jiaolong, and the nation's most advanced oceanographic survey vessel, the Science.

The new zone's two deep-water ports are capable of handling as much as 700 million tons of cargo a year.

With these advantages, it aims to reach a gross product of 500 billion yuan in 2020, and to ensure the output of the marine industries will rise by 15 percent annually, Wang says.

Expectation

Wang, who is also Qingdao's deputy mayor, says the approval of the New Area is expected to lead to another round of development in the city.

"Qingdao now has unprecedented opportunities to upgrade its industries and reinvent itself as a global city with a vibrant marine-related economy," he adds.

"Everyone who has visited our company is now aware of the close connections between their lives and the ocean," says Li Kechang, vice-president of Qingdao Bright Moon Seaweed Group.

"The noodles we eat, the soft drinks we like, the medicines we take and the cotton clothes we wear - none of them can be made without materials produced from seaweed," he says. "Trust me, almost every item of our daily necessities is connected to our products."

The company, which began as a tiny marine-chemicals plant, has grown to become the world's biggest enterprise in seaweed-based products, developing and manufacturing a wide range of items such as alginate, functional sugar alcohol, biomedical materials and marine-based cosmetics.

"As people become increasingly concerned about quality of life, our products, which are totally green and organic, will embrace a much bigger market," Li says.

"The New Area is determined to boost the marine economy, so it will depend heavily on the maritime biological sector, offering us abundant opportunities."

In 2013, China's maritime industries generated 5.43 trillion yuan, a year-on-year increase of 7.6 percent, according to the State Oceanic Administration. The gross oceanic product accounted for 9.5 percent of China's GDP, and more than 35 million people were employed in maritime-related jobs. The New Area's establishment should see the gross oceanic product account for 10 percent of national GDP next year.