Promising Port City in the Southeast

By SUN CUIPING & YU JIE

An electronic workshop.	A glimpse of Putian’s power grid.	Investment Conference for the Xiuyu National Timber Processing Zone.

Global brewing giant Inbev on January 23 this year announced its acquisition of Fujian Sedrin Brewery Co., Ltd. Over the next two years, Inbev will invest some RMB 5.886 billion (EUR 614 million) in the Fujian-based brewery, eventually taking a 100 percent stake. The deal was the largest-ever acquisition in Chinese brewing history, and Putian, where Fujian Sedrin is located, immediately made headlines at home and abroad. Many wondered why a giant brewer such as Inbev would show such interest in a local Chinese brewer with a small market of Fujian and a few neighboring provinces.

In 2004, the Fujian provincial government proposed the idea of constructing an economic belt on the western side of the Taiwan Straits, to boost Fujian’s economic strength as well as to develop more business links with Taiwan. The proposal was later discussed at the Chinese National People’s Congress and the Chinese People’s Political Consultative Conference, and it was then written into China’s Eleventh Five-year Plan. Putian City is situated at the heart of the new economic belt, and intends to realize great development potential and opportunities as part of the economic entity development strategy. The Putian municipal government carefully studied and analyzed the strategy and worked out its own development target of bringing together certain key enterprises, improving infrastructure, and constructing a fine port city with a good ecological environment in the Meizhou Bay. Fujian Sedrin is one of the largest enterprises in Putian, which is emerging as a new port city with a promising future on the western bank of the Taiwan Straits.

Transportation Advantages

The ground on the Putian segment of the Fuzhou-Xiamen Railway was broken in April 2006, opening up a new chapter in Putian’s transport history. Fifty-six kilometers of track will run through Putian, and the railway is expected to be operational by 2009. Upon completion, it will become a major link between the Pearl River delta to the south and the Yangtze River Delta to the north. Mayor of Putian Zhan Yi pointed out in the railway land levy meeting that the construction of the Fuzhou-Xiamen Raiway through Putian will finally bring a railway link to the city, and help to accelerate its social and economic development. That development will be bolstered still by plans to build another trunk railway through Putian, the Xiangtang-Putian Railway. With an investment of RMB 42.5 billion (US $5.3 billion), and a total length of 632.75 kilometers, its trains will be able to reach an operational speed of 200 km/h and a designed speed of 250 km/h. Construction of the railway will begin in 2007, and it is expected to be operational in 2011. By then, travel time between Putian and the Chinese capital of Beijing will be cut to an overnight train ride.

The construction of a complex railway and highway network is essential to Putian’s plans to build more links with other inland cities and towns. Putian has three large bays, Meizhou, Xinhua and Pinghai, with a sea territory of 11,000 square kilometers and 343.6 kilometers of coastline. In Meizhou Bay alone, there are more than 30 kilometers of deepwater coastline with a depth greater than 10 meters, which could accommodate more than 150 deepwater berths. Xiuyu harbor in the bay is 510 nautical miles from Shanghai to its north, 392 nautical miles from Hong Kong to its south, and 72 nautical miles from Taichung in Taiwan. The sea is usually calm, the navigation path straight, and the harbor bed never freezes or silts up. And the fact that 100,000-ton ships can berth there with ease makes it an ideal place for the construction of a large international standard deepwater harbor. Nineteen wharfs have already been built in Xiuyu Harbor, connecting it with some 50 ports in 29 countries and regions around the world including the United States, Japan, Australia, Cuba and Russia. It is a Grade A port and one of the central government’s four planned international transshipment ports. In 2005, the freight throughput of Xiuyu Harbor exceeded 10 million tons.

To help develop the regional economic entity on the western side of the Taiwan Straits, the Fujian provincial government proposed the construction of large-scale deepwater wharfs with a handling capacity of more than 100 million tons in Xiamen, Fuzhou and Meizhou Bay, setting out the function and development goal for Putian as a national comprehensive port. By 2010, its handling capacity is expected to reach 50 million tons, and it will become a multi-functional port, a major freight transportation and logistics center and a key industrial entrep?t.

Attracting Talent and Creating Famous Brands

The Putian municipal government came up with a strategy to award substantial grants to certain high performing enterprises such as Fujian Tries Group Co,. Ltd and Fujian Sedrin. The funds were to be used to encourage the emergence of famous regional brands. Enterprises producing national famous brands were awarded RMB 1 million (US $125,000), brands exempt from inspection got RMB 100,000 (US $12,500), and provincial famous brands received RMB 50,000 (US$ 6,250). The strategy has certainly succeeded. Three years ago, there were no famous brands from Putian, and now six locally produced goods, namely Tries shirts, E.S Fragrant Rice, Sedrin Beer, Kazhumi down coats, Sankeshu paint and Volt trainers, are recognized as national famous brands, and 14 products are exempted from quality inspections. The famous brand strategy has helped broaden economic development space, boost profits and promote regional development in Putian.

Another strategy of equal importance for the Putian municipal government is the fostering of an efficient pool of human resources. Says Mayor Zhan Yi, “A qualified human resource team is vital to our success.” To train a qualified work team that meets the demands of port city development in Meizhou Bay, the Putian municipal government issued regulations in 2005 to strengthen human resources management in the city so as to attract more talents with rich knowledge, refined skills and innovative spirits that are needed for a quicker pace of social and economic development. To get the most out of all employees, a scientific personnel appraisal system has been introduced. On the one hand, it evaluates their work, and on the other hand, it serves as a ground for rewarding those that make outstanding achievements.

This strategy has invigorated Putian’s economy, and at the same time, it has introduced more enterprises to industrial parks in Putian. In 2005, industrial parks in Putian attracted fixed asset investment of RMB 2 billion (US $250 million) - an increase of 38 percent over the previous year. In the same year, the total output value of Putian’s enterprises reached RMB 11.5 billion (US $1.44 billion) - an increase of 40 percent over 2004. Putian is one of Fujian province’s three information industry development bases. There are already 156 enterprises in the Putian Hi-Tech Development Zone, with a total annual output value of RMB 5.6 billion (US $700 million), including six enterprises each with an annual output value of more than RMB 600 million (US $75 million).

The Influence of Mazu Culture

Mazu, the Chinese Sea Goddess, was born in Putian in 960. Legend has it that Mazu was a brave, wise girl skilled in Chinese medicine and endowed with supernatural powers. She could forecast the weather, and would fearless venture out to help fishermen in distress at sea. Her powers were manifest in her ability to quell storms, and she was much loved and esteemed by the people in her hometown. After her untimely death at the age of 28, fishermen would to pray to her for safe sea voyages, and as time passed, she became known as the Sea Goddess throughout the country and also abroad. There are some 4,000 Mazu temples scattered around 26 countries and regions in the world, but it is those in Putian that hundreds of thousands of tourists come to visit every year.

Putian has begun to employ the fascinating Mazu culture to draw a tide of investment. Since 1994, it has organized seven Mazu Cultural and Tourism Festivals, which have earned a good reputation at home and abroad. Every year, more than 100,000 Taiwanese travelers come to Putian to offer sacrifices to the Sea Goddess, and many Taiwanese investors come to their hometown of Mazu to develop their business. Since 1987 Putian has approved 414 Taiwan-invested enterprises, with total contracted investment amounting to US $816 million, and utilized capital reaching US $501 million. In 2005, Taiwanese enterprises in Putian turned out a gross output value of RMB 5.565 billion (US $695 million), which amounted to about one-fifth of the gross industrial output value of the city. Meanwhile, they have realized an export value of US $356.59 million, accounting for 46.6 percent of the municipal export volume. In the first half of 2006, another eight investment projects by Taiwanese enterprises were approved with contracted investment of US $32.79 million, an increase of 231.5 percent over the same period of 2005.

The Putian government has organized a series of Mazu cultural activities in recent years, including engraving Mazu statues, publishing Mazu books and stamps, performing Mazu dramas and offering Mazu-themed banquets. A Mazu City is now under construction to combine cultural and business development. It will be built as an extension of the Meizhou National Holiday Resort, to attract overseas Putian descendents to come back to participate in religious activities, and to invest in their homeland’s development. According to Yuan Jingui, party secretary of the Putian CPC Municipal Committee, the planning and construction of Mazu City is an important initiator of the port city development in Meizhou Bay. It will help Putian merge better with the regional economy and serve as a bridge to link economic development in the Yangze River Delta and the Pearl River Delta.

Attracting Investment

Investment from overseas Chinese is an important capital source for Putian’s economic development, and improving the investment environment to lure them there is a hot topic for the Putian municipal government. Putian natives are well-known in China for their sharp business acumen. There are about 700,000 overseas merchants in 48 countries and regions around the world that are descendents of Putian. In China, there are 500,000 Putian merchants doing business in different parts of the country. Accounting for nearly one-sixth of the population of Putian, they run more than 30,000 enterprises, with a total capital of over RMB 30 billion (US $3.75 billion) and create annual output value of RMB 200 billion (US $25 billion) - including trade volume. Pillar industries in Putian include wood processing and trade, jade, and gold and silver jewelry processing.

Seeing that so much capital generated by Putian people was leaving the city, the Putian municipal government decided to intensify its efforts to attract more Putian merchants back to their hometown. The past few years have seen countless government officials from Putian going out to various parts of the country to advertise Putian’s investment potential and policy. Business bidding activities were held in large cities such as Beijing, Shanghai, Wenzhou, Kunming, Chongqing, Guangzhou and Hong Kong, and they have also stepped out of the country to Japan, the United States and other countries. Their efforts have paid off: 1,054 projects have so far been invested in by returned Putian merchants with an expected investment of RMB 35.94 billion (US $4.5 billion) and an actual investment of RMB 16.37 billion (US $2.05 billion).

Wood trade is the largest business in Putian, and there are some 100,000 Putian wood merchants scattered around the country. They formerly faced a large trade barrier in the form of the absence of an imported wood quarantine and pest killing area in the city, which restricted their trade expansion. Putian wood merchants called for construction of a wood quarantine and pest killing area in Xiuyu Harbor, but other large port cities, including Dalian in Liaoning Province and Lianyugang in Jiangsu Province, had applied for a similar facility. After carrying out market surveys, the State Administration of Quality Supervision, Inspection and Quarantine finally approved the establishment of an enclosed wood quarantine and pest killing area in Xiuyu Harbor in September 2004. Construction of the area has already been completed, and it will soon formally go into operation. The area is the first coastal wood import port in China, and the Xiuyu Harbor Wood Processing District has also been approved as a state-level wood trade and processing base. Twenty-three enterprises have already entered the district, bringing investment worth RMB 2.3 billion (US $287 million).

Meanwhile, other businesses are prospering in Putian. The Fine Arts City and Jewelry Market are under construction, and more than RMB 200 million (US $25 million) has been invested in building a pharmaceutical instrument manufacturing base in the city. Its first phase construction will be finished at the end of this year.

Developing Large Projects

During the 2005 Xiamen International Investment and Trade Fair, an agreement was reached to invest US $3 billion in a large paper making plant in Putian. Its annual sales revenue is expected to reach RMB 6 billion (US $125 million), with annual profits of RMB 700 million (US $87.5 million). And the Putian municipal government plans to develop other large projects to stimulate its economic development. The first phase of the Fujian liquefied gas project, with a total investment of RMB 11.2 billion (US $1.4 billion), has just been initiated. It includes a gas transmission trunk line with an annual transmission capacity of 2.6 million tons, as well as three gas power stations in Putian and Xiamen. Upon completion, Putian will become a major strategic energy supply base for southeast China.

Statistics show that in 2005 alone, a total investment of RMB 4.76 billion (US $595 million) was put into 59 key projects now under construction in Putian. These projects have in turn stimulated economic growth in the city. In the first half of this year, many of Putian’s economic indexes ranked first in Fujian Province, and its actual utilization of foreign capital listed second in the province.

Large project development has been included as a key task for the Putian municipal government in its Eleventh Five-year Plan. It plans to develop ten pillar industries, including wood processing, pharmaceutical instruments, and at the same time, grow some new industries, such as electronics, textiles and chemicals.

Putian is currently undergoing rapid development - it hopes to double its economic revenue in the next five years. In plain figures, that means by 2010, its GDP should surpass RMB 80 billion (US $10 billion), and its fiscal income will reach RMB 7 to 8 billion (US $875 million to 1 billion). All being well, Mazu’s old home is set to thrive and prosper through to the next millennium and beyond.