By LI LIKUN & ZHANG XIWEN

Manzhouli Municipal Square.

Manzhouli fruit wholesaler Li Junyi does a brisk trade in Shaanxi apples. Keeping her customers satisfied calls for a container truck-full bound for Russia every other day.

Li gave up factory work five years ago and has since worked as one of Manzhouli’s traders with Russia’s Chita and Ulan-Ude. She enjoys the work and revels in its benefits. She says brightly, “Business is far easier now than ever before. I sometimes earn hundreds of thousands of yuan from just one transaction.”

Following developments since China’s reform and opening, Manzhouli’s foreign trade has seen enormous changes. Its 8.2 million tons of border trade in the first nine months of 2004 translates into US $880 million -- first among China’s border ports. Its monthly foreign trade growth averages 70 percent, having achieved a record high of 211.6 percent. Following the deepening of Sino-Russian relations, Manzhouli has been earmarked by the Chinese government as one of two land ports for key construction and priority development.

Bold Reforms

Manzhouli is at the juncture of China, Russia and Mongolia. It is the most economically viable thoroughfare over the Bohai Sea to Russia, other members of the Commonwealth of Independent States and Europe. Originally an important transfer station for goods and passengers between China and Russia, foreign trade has been an important aspect of Manzhouli’s economy for the past century.

Santan Gorge.

In 1992, when designated a frontier open city, Manzhouli became the trading hub for hundreds of thousands of merchants from various parts of China and Russia and the port worked to capacity day and night. The city resembled a huge construction site, its skyline punctuated with tower cranes, and Manzhouli’s enterprise registration office heaved with applicants. State tax revenue increased sharply and bank deposits soared.

Then, in the mid to late 1990s, the number of trading companies dropped from 2,000 to 200, and of the 24 foreign-funded enterprises, only four maintained normal business. In the first quarter of 1998, the total volume of exports decreased 20 percent from the same period the previous year. Manzhouli was at low ebb.

In October 1998, Yang Hanzhong was elected mayor of Manzhouli. After carrying out exhaustive research he adopted the principle of taking projects as key, and putting emphasis on the port. This is still the premise on which the city works.

One year after taking up office he simplified the previously cumbersome customs clearance procedures and devised and established a supervisory fee collection system. In order to streamline port transportation capabilities, the local government raised funds to expand railways and highways and add transshipment equipment. By 1999, the volume of cargo handled by Manzhouli Port had risen to 5 million tons, and the time needed to clear customs cut from five hours to 45 minutes. According to Huang Bin, a merchant from Zhejiang Province, “Before 1998, even local businessmen were reluctant to export their goods through Manzhouli Port, but since 1999 when I came here with my partners, it has attracted merchants from as far as 2,000 kilometers away.”

Manzhouli’s economy formerly relied heavily on its fluctuating border trade. Under Yang Hanzhong’s leadership, however, the city began to seek out broader prospects for more stable development in the contemporary climate of economic globalization. He realigned the city’s orientation, adding tourism to its scope of activities as international commercial and trade city, and re-attuned its investment environment and industrial structure. In order to create a more dynamic port environment, the city implemented preferential policies and top class service with the aim of attracting funds, projects and talents, thereby developing industry, export-oriented agriculture, tourism and new service trades.

Ethnic costumes.

To date, Manzhouli has partnership ties with 2,000 enterprises from 27 provinces, municipalities and autonomous regions. It also has economic cooperation relations with 25 countries and regions, including the United States, Japan and Singapore.

In the first six months of 2004, Manzhouli realized 153 million yuan of industrial added value, an increase of 30 percent over the same period in 2003. Its income from tourism was 510 million, and foreign exchange earnings from tourism totaled US $40 million, an increase of 38.3 percent.

Export-oriented agriculture has been revitalized, and characteristic planting and cultivation expanded. Characteristic tourism has become an important pillar of the local economy, and its new finance and hospitality industries are burgeoning. Intermediary industries, such as asset evaluation, policy consultation and legal services, are also developing.

Throughout its growth from a small frontier city to an international tourism, commercial and trade center, Manzhouli has sustained rapid economic development.

New Blueprint

In April 2004, cooperation between China National Petroleum Corporation (CNPC) and Russia’s Yukos hit a setback, necessitating shipments of petroleum that the CNPC had purchased from Yukos being transported by rail instead of pipeline. Manzhouli Railway Station’s handling capacity was stretched to its full extent. Head of Manzhouli Railway Station Yu Guangji recalls, “The pressure was unbelievable. Manzhouli station experienced a bottleneck like never before.”

According to Yu Guangji, Manzhouli’s monthly handling capacity is 1 million tons, and it now operates to full capacity, but increased imports of petroleum have meant reductions in other goods. Manzhouli Railway Station statistics state that in April 2004 imports of chemical raw materials decreased by 30 percent and those of timber by 24 percent due to increased petroleum imports.

Increases in Sino-Russian trade have also affected the smooth operation of the Russian Port.

In 2002, then state councilor Wu Yi inspected Manzhouli Port and suggested a faster mode of operation. Meanwhile, China, Russia and Mongolia all allocated huge sums with which to expand the handling capacity of their own ports. Five new tracks are currently being laid in Manzhouli Railway Station, and the Russian port over the border is also being upgraded. The first to break the bottleneck will be the one to take the initiative in bilateral trade.

Manzhouli’s highway port is also being renovated with the aim of separating the current customs mode into separate channels for passengers and cargo. Since May 2004, Manzhouli Port has implemented reforms to its customs procedure in the form of a “green channel,” which allows Russian customs personnel to enter Manzhouli directly, shortening procedure time from three days and nights to two hours. The Chinese government also allows Russian motor vehicles to enter Manzhouli’s downtown area. In September, the Manzhouli-Chita International Tour Train opened to tourists and it is hoped that by January 2005, 24-hour customs clearance will be in force. Customs reform is only a small aspect of Manzhouli’s development strategy. Yang Hanzhong plans to make Manzhouli a major player within Northeast Asian regional cooperation, thus extending it from a purely Russian/Mongolian arrangement to one that encompasses Japan, the Republic of Korea and regions along the Eurasian Continental Bridge.

In August 2004, China and Russia reached agreement that the Manzhouli-Zabaykalsk Border Trade Zone on the Russian side be constructed. Li Junyi is looking for new suppliers in China, as experience has taught her that once the Russian side of the border trade zone opens, her business volume will balloon.

Manzhouli Airport, a vital aspect of the city’s plan to build an export-oriented economy by upgrading foreign trade and developing tourism, is expected to be complete by the end of 2004. The airport will expand international logistics and facilitate air/sea transportation, promoting border trade and the Eurasian Continental Bridge economy and consolidating Sino-Russian relations.

Member states of the European Union have formed a unified market, and Canada and the United States have established a free trade zone. China’s northern neighbors Russia and Mongolia can expect huge development space within Sino-Russian and Sino-Mongolian economic and trade cooperation, as well as within the Northeast Asian region. Manzhouli, therefore, has enormous potential for developing commerce and trade.

Postscript

Manzhouli is a city of 700 square kilometers in northern Inner Mongolia Autonomous Region. It has lakes, grasslands, wetlands and vast mineral reserves, as well as ports and sizable human resources.

Visitors to Manzhouli are fascinated in its late Paleolithic human fossils, in particular that of the Zhalainor human skull, and of a mammoth – the largest fossil specimen so far discovered in China. It is also site of the Xianbei ethnic group tombs, Mogushan Paleolithic remains, and a Liao Dynasty (916-1125) city. Manzhouli’s streets are graced with Russian-style architecture and churches. In recent years, it has held ethnic minority festivals featuring the Ewenki, Oroqen and Daur ethnic minorities. In December 2003, it held the Tianrui Cup Manzhouli China-Russia-Mongolia Border Region Beauty Pageant and the Fifth International Ice and Snow Festival.

City planners pay great attention to preserving Manzhouli’s original layout and Russian style architecture, each street and district having its own characteristics. Russian visitors to Manzhouli feel at home, and to Chinese visitors it has the ambience of an exotically foreign city.

Yang Hanzhong, now Party secretary of Manzhouli, is intent on “…building a thriving port city that will promote tourism, improve its image, beautify the environment, upgrade its status, increase cohesion, and promote development, thereby benefiting its citizens.” Named “excellent tourism city” and national 4A tourist area by the Chinese government in 2004, Manzhouli’s concept of openness and enlightened ideology constitutes its own urban civilization.