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(IV) Northeast China

Liaoning

In 2015, Liaoning Province thoroughly studied and implemented the spirit of the various documents of the CPC Central Committee and the State Council, conscientiously implemented the decisions, arrangements and deployment of the CPC Liaoning Provincial Committee and the People’s Government of Liaoning Province, adopted a more proactive opening-up strategy, and actively responded to the challenging and complicated development situation at home and abroad. The province made full use of the stimulating effect of foreign investment on the economy. The scale of foreign loans remained stable, and the channels of lending diversified. The growth momentum of overseas investment was strong with investment quality constantly improved, promoting the economic and social development on the whole.

(1) Relevant policies of Liaoning to promote inward and outward investment

In order to implement the Guiding Opinions of the State Council on Promoting International Cooperation in Production Capacity and Equipment Manufacturing (GF [2015] No. 30) and the Country-Specific Plan for International Production Capacity and Equipment Manufacturing Cooperation formulated by the NDRC and the Ministry of Foreign Affairs (FGWZ [2015] No. 2588), Liaoning Province further strengthened the cooperation in international production capacity and equipment manufacturing between key BRI countries, promoted the export of products, industries and capital from the province and did a good job in pairing up with a BRI country. In accordance with the requirements of the provincial government, and in line with the Implementation Plan for Promoting International Capacity and Equipment Manufacturing Cooperation in Liaoning Province (LZF [2015] No. 26), Liaoning Province drafted the work plan for the implementation of the Country-Specific Plan for International Production Capacity and Equipment Manufacturing Cooperation, which is currently being revised and improved.

  • (2) Inward and outward investment of Liaoning in 2015
  • 1) UTILIZATION OF FOREIGN CAPITAL

In 2015, there were 475 new foreign-invested enterprises approved in Liaoning Province, down 0.6% year-on-year; foreign direct investment stood at

USS5.19 billion, down 34.4%; contractual foreign investment totaled USS6.84 billion, down 25.5% year-on-year.

From the perspective of the sources of foreign capital, the Hong Kong SAR contributed a total of US$4.13 billion, 79.6% of the total. Foreign investment from Singapore was US$250 million, up 11.5%, and US$240 million came from Japan.

In terms of the destination industries, the real estate industry was the top contributor, and the performance of the modern services industry was also outstanding. The real estate industry utilized US$2.7 billion of foreign capital, a 12.8% year-on-year decline, accounting for 52% of the province’s total; the modern sendees industry received US$960 million, which was a 59% year-on-year decrease; equipment manufacturing utilized US$530 million of foreign capital, a 61% decrease from the previous year.

At the city level, Dalian and Shenyang took the vast majority of the province’s total foreign investment. Dalian used US$2.7 billion, a 9.9% year-on-year increase, accounting for 52% of the province’s total, playing a more prominent leading role; while Shenyang utilized US$1.06 billion, a 53% decrease from a year earlier, accounting for 20% of the province’s total. Tieling used US$170 of million foreign capital, an increase of 5%, which was outstanding performance.

2) OVERSEAS INVESTMENT

In 2015, Liaoning enterprises established 178 overseas facilities. The total contractual investment was US$4,421 billion, a 25.53% year-on-year growth, with the investment from the Chinese side amounting to US$3,817 billion, which was a 15.63% year-on-year increase.

3) DEVELOPMENT TRENDS AND PROSPECTS FOR 2016

Although there are still some uncertain and unstable factors in the domestic and foreign economic environments, more positive factors are in place for expanding the inward and outward investment of Liaoning in terms of policies, economic conditions and environment. The expectation is that in 2016, foreign investment in Liaoning will increase steadily, the structure will improve, overseas investment will continue to grow rapidly, and the internationalization and comprehensive competitiveness of the province’s economic development will be enhanced.

  • (3) Investment in and from BRI countries in 2015
  • 1) INVESTMENT IN BRI COUNTRIES

Investment of Liaoning in BRI countries increased rapidly in 2015. The province approved US$857 million of investment in BRI countries in 2015, mainly in Russia.

Large-scale overseas capacity transfer projects produced an obvious driving effect. The province’s metallurgical, energy, mining, building materials and petrochemical industries all transferred production capacity abroad. For example, Liaoning Yongcheng Economic and Trade Development Co., Ltd. built a chemical fertilizer production plant in Russia, and Liaoning Wolf Petroleum Equipment Co., Ltd. established a drilling rig and equipment manufacturing park in Russia.

Liaoning enterprises sped up their acquisition of high-quality overseas assets, brands and advanced technologies. For example, Liaoning Chuncheng Industrial and Trade Group Co., Ltd. acquired Noel Group Co., Ltd. in Kyrgyzstan.

2) DEVELOPMENT TRENDS AND PROSPECTS FOR 2016

As the largest developing country in the world, China enjoys political and social stability and huge market potential. It is still one of the most favored destinations for foreign investment. Liaoning expects to see further development in inward and outward investment in 2016.

First, the dividends of various national structural reforms will be released further, and the conditions for further opening-up will be more mature. The central government issued Several Opinions of the State Council on Further Promoting the Utilization of Foreign Investment, continuously revised and improved the measures for the administration of foreign investment and overseas investment, increased support for the utilization of foreign capital and overseas investment, and further streamlined administration and delegated power, as well as expanded the scope of opening-up. Reform has been deepened in an all-round way in Liaoning, and the business environment has been improved. In addition, China (Shanghai) Pilot Free Trade Zone has made preliminary achievements and its experience will be replicated and popularized throughout the country.

Second, China’s economic transformation is to deepen, promoting its open-ing-up to the outside world. In 2016, it is expected that China's economy will continue to see steady growth, with more driving force coming from structural adjustment. Economic growth will be based more on quality, structure and efficiency. All provinces will pay more attention to the comprehensive advantages and overall effects of the utilization of foreign capital. Liaoning will introduce advanced technology, talents and management experience through the introduction of foreign capital, pay more attention to the role of overseas investment in resolving the problem of excess capacity and alleviating environmental pressure, and obtain foreign energy resources through overseas investment to transfer surplus production capacity. Opening-up will play a more prominent role in the economic transformation and development of the province.

Third, regional development strategies will be further implemented and there will be more space for opening-up. China will accelerate the implementation of the BRI and promote the construction of the Asian Infrastructure Investment Bank. This will help Liaoning Province win support from the national level and enable it to further expand the space for foreign cooperation. Liaoning Province will make every effort to promote major going-global projects, and enhance its capability to absorb international industrial capacities, capital, technologies and

Regional investment analysis report 2015 253 talents. Foreign cooperation industrial parks such as the China-ROK Free Trade Zone and China-Germany Equipment Manufacturing Industrial Park will be developed with intensified efforts so that they can become platforms for resource accumulation and gather enterprises along entire industry chains, contributing more to the opening-up of Liaoning.

 
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