ZHEJIANG, CHINA / ACCESSWIRE / June 17, 2020 / In 6 days, 81 foreign projects were signed with a total investment of $13.7 billion dollars on the 22nd (online) China Zhejiang Investment and Trade Symposium. The number is basically the same as last year, which means the data of Zhejiang's foreign capital in the first quarter realizes growth in spite of the pandemic.
The global investment intention has weakened, but Zhejiang's foreign capital increased. Why? What is the effect of these foreign capital on Zhejiang's response to accelerated restruction of global industrial chain? As the epidemic continues to spread abroad, How can Zhejiang stabilize foreign investment? With these questions, reporters interviewed many representatives of foreign companies settled in Zhejiang to find answers from them.
Quantity and quality of projects increase
Foreign companies follow the pace of industrial transformation
"Based in Haiyan, create the 'Hydrogen Valley of China'!" It is hard to imagine this slogan was suggested by Feng Yan, vice President of Air Products China, on the opening day of the Symposium. At the same day, the company's hydrogen energy project based in Jiaxing Haiyan with a total investment of $1 billion dollars was officially started.
Besides US Air Products, a number of foreign companies are following the trend of Industrial transformation in Zhejiang, targeting emerging fields such as the big health industry, high-end equipment manufacturing and 5G technology application.
As a demonstration and pilot city of hydrogen energy technology innovation and industrialization in Zhejiang province, Jiaxing has possessed a number of domestic well-known hydrogen energy-related enterprises such as D.R. Powertrain System Co., Ltd. and hydrogen energy automobile industrial park with an investment of 10 billion yuan. It already has the production capacity of fuel cell system and core components. Feng Yan has known the strength of Jiaxing hydrogen energy industry. "The project will help Jiaxing strengthen its chain and accelerate the formation of a complete industrial chain from hydrogen production, storage and transportation, hydrogen refueling stations, hydrogen fuel cell systems to hydrogen vehicles." she said.
Shaoxing Binhai New Area successfully acquired a $430 million foreign investment. The project is a semiconductor design industry platform. "In terms of the amount of investment, $430 million dollars is not the largest, but this project is very significant for the development of the semiconductor industry in Shaoxing and even in Zhejiang." The representative of foreign investment department of Zhejiang Provincial Department of Commerce said. For Shaoxing, which is speeding up the introduction of leading integrated circuits enterprises, such high-quality platforms are its urgent need.
Foreign companies bring capital to Zhejiang and locate high-end sectors of industrial chain in Zhejiang, why? The reason is: they value the large Chinese market and Zhejiang's supporting capacity for industrial chain.
"Gas products are not easy to transport, so we need to invest in projects close to gas sources." Feng yan said. American Air Products gets both an important gas source and a huge market in the Yangtze River Delta region. Therefore, this project in Haiyan is not only an investment in Zhejiang, but also an investment in the future of the integrated development of the Yangtze River Delta.
Zhejiang's outstanding supporting infrastructure is a key factor that attracts foreign investment. Zhai Chao, executive director and vice President of Crect Group, who has just signed a contract for a comprehensive health industry platform project at the Symposium said:"we have about 1,000 OEM factories in China, half of which are concentrated in the Yangtze River Delta. Jiashan is one of our best choices."
In this symposium, signed projects have higher technology values and more headquarter and platform projects. "Compared with the investment in single plant in the past, more foreign companies now see Zhejiang as a key to radiate to the Yangtze River Delta." Zhai Chao said that platform projects often play a significant driving role, and it is highly likely for companies to make further investment to complete industrial layout.
Bring in and go out
Zhejiang enterprises seize the opportunity of industrial chain adjustment
"The layout of the global industrial chain is not static, but dynamically adjusted." LAN Jian, director of the Provincial Business Research Institute, said, "the industrial chain layout will change with the international division of labor and global industrial distribution, and the epidemic has accelerated its evolution. In this process, overseas enterprises enter China and Zhejiang enterprises go abroad, this is the result of two markets selecting each other.
It's an American luxury car brand selling each car for about 5 million yuan. It had great sales performance, but just suffered from unstable supply chain during the pandemic. To solve this problem, US Specialty Vehicles, LLC accelerated to shift factories from the US to Zhejiang, China. In the symposium, the company signed the contract to officially locate its factory in Ningbo, which has advantages in both industrial chain supporting facilities and port logistics.
Xu Bin, chairman of US Specialty Vehicles, told reporter that after the project was launched, the industrial park would be set up to attract dozens of foreign automobile manufacturers along industrial chain to settle in, so as to further improve the local industrial chain and reduce production costs.
"In building a modern industrial cluster, private enterprises and foreign investment in Zhejiang should form a healthy cooperative relationship." Nan Cunhui, chairman of Chint Group, said, "the company is speeding up the construction of Chint (Yueqing) IOT sensor town, to cooperate with Germany's famous IOT sensor industry association and incubate local sensor technology companies."
At the symposium, Wang Licheng, chairman of the Board of Directors of Holley Group, introduced the "three big and three small" overseas industrial parks that Holley Group is currently building globally. In his view, enterprise introduction and going out are indispensable, both are important subjects in Zhejiang manufacturing transformation.
"In the past 20 years, processing and manufacturing sector of almost every industry clustered in China, turning China into the 'workshop of the world'. However, China needs to consolidate and upgrade this position. It needs to bring in and go out." In his opinion, in the future, Chinese enterprises should not only keep and improve those irreplaceable advantages in industries and supply chain, but also embed their supply chains into the adjusted global supply chain through international production capacity cooperation.
Improve business environment
Best ways to attract foreign companies
In the press conference of the 22nd Zhejiang Investment and Trade Symposium, Zhejiang province issued a new round of policies to stabilize foreign investment. The new policies emphasize on how to implement the national treatment for foreign enterprises instead of specific subsidy or reward for the foreign-funded projects settled in Zhejiang.
"What foreign companies really want is better business environment." The representative of foreign investment office of the Provincial Department of Commerce said. The best way for Zhejiang to attract foreign investment is no longer incentives and subsidies, but constantly optimized business environment. In fact, almost every foreign company newly settled in Zhejiang or the ones increasing investment in Zhejiang repeatedly thumb up for Zhejiang's business environment.
How attractive is good business environment for foreign companies? Huang Bin, vice President of Astrazeneca China, gave his answer by telling the story of locating the eastern regional headquarter in Zhejiang. "It was not an easy decision to make," Huang said.
"We are now building four regional headquarters across the country. The regional headquarters in the west, south and north are quick decisions, but the regional headquarters in the east can hardly be decided." Huang bin said, at that time, Hangzhou gave a warm and authentic invitation. However, Astrazeneca's China headquarter is in Shanghai, and Hangzhou is so close that radii of two headquarters would overlap.
However, leaders of Xiacheng district of Hangzhou have visited us again and again to introduce the industrial development plan of Xiacheng district in detail and talk about how the local government can provide quality services after the project lands. At last, Huang Bin and his team was moved. In addition, Zhejiang province is Astrazeneca's second largest market in China, Astrazeneca finally decided to locate its eastern headquarter in Hangzhou.
After reaching the initial intention, Astrazeneca's confidence was further reinforced by the timely follow-up services of Xiacheng district. Although Hangzhou was the last to decide among four regional headquarters, it was the fastest in preparation and the first to be signed and settled. Based on this, Huang bin said with confidence: "We should build a closed-loop ecological industry integrating diagnosis and treatment in Hangzhou instead of just a factory or a sales company."
Thanks to better business environment, places like Lishui and Quzhou, which used to have fewer foreign-funded projects, are getting more and more foreign investors. On the signing ceremony of major projects on the opening ceremony of 22nd Zhejiang investment and trade symposium, Germany Schott Pharmaceutical Packaging Co., Ltd. invested another 43.9 million dollars to build an automatic production line of glass pipe products in Jinyun. This is the fourth time in recent four years that the company has expanded its investment.
"In fact, over the years many local governments have invited us to invest, but after repeated comparisons, Schott chose Jinyun." According to Hu Mingyue, deputy general manager of the company, the most important reason is the business environment. Since its investment in Jinyun in 2012, the local government has simplified the process of project approval and other steps. With the exclusive services, the projects have been put into operation ahead of schedule. This year,on the basis of the pharmaceutical packaging unit, Schott made a new investment of 100 million euros to introduce its own upstream production system.
From comprehensive health industry to cultural tourism project, from high-end equipment manufacturing to new energy vehicle project… The continuous optimization of the business environment has also enabled Zhejiang to expand foreign investment. In this Symposium, The project of "Ten miles traditional marriage culture Town" jointly built by Shinnichiya Corporation and Ninghai Cultural Tourism Group was officially signed, with a total investment of about 1.78 billion yuan. Wang Weiqiang, chairman of Ninghai Cultural Tourism Group, said that Japan's Shinnichiya Corporation has rich experience in the construction and operation of cultural tourism towns, thus its investment will greatly promote the project development.
However, this cooperation was nearly aborted due to the epidemic. "During the epidemic, Japanese companies hesitated to push the project because of the downturn in the global tourism market." Wang Weiqiang said. He and his colleagues kept in touch with Shinnichiya Corporation through WeChat and email. Since March 1, they have invited Chinese representatives of Shinnichiya to fly from Beijing to Ningbo twice a month for multiple rounds of negotiation on specific matters of this investment cooperation. Their enthusiasm and persistence touched the Japanese enterprise, and finally made this "cloud signing" happen on the symposium.
On 22nd Zhejiang Investment and Trade Symposium, many foreign-funded projects were signed and put into construction. This shows Zhejiang's initiative to cope with global industrial chain restruction. These higher-quality projects will bring both success for involved foreign companies and new opportunities to the high-quality economic development of Zhejiang, while accelerating Zhejiang 's construction of an advanced global manufacturing base.
Writer | Wengjie DuanQionglei correspondent | ZhongHuanhuan
Translator | Xia Sainan
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