City's off limits to investors setting up factories

PUBLISHED : Thursday, 14 December, 1995, 12:00am
UPDATED : Thursday, 14 December, 1995, 12:00am

INVESTING in one of Shenyang's economic zones is not an option for companies considering setting up manufacturing operations. It's an order.

Plagued by an abnormal concentration of heavy industry and heavily polluting enterprises in the central area, Shenyang's Municipal Planning Bureau is directing all new industrial enterprises, both foreign and domestic, to the outskirts.

Non-polluting manufacturers using high technology can seek approval for a site in the Nanhu Science and Technology Development Zone not far from the centre.

The rest must settle for the Economic and Technological Development Zone, or a site in the suburbs, according to Planning Bureau director Li Desen.

The main advantage of the zones, besides their tax breaks, is that they are close to the highways that fan out from Shenyang through the northeast.

Chen Gang, vice-director of the Economic and Technological Development Zone (ETDZ), said: 'People do not set up in Shenyang to do export business.

'Everyone wants to penetrate the domestic market, find good partners and take advantage of the local raw materials and resources.' Since 1992, when the ETDZ was upgraded to a state-level zone, investment has surged. About 530 companies - 80 per cent foreign-invested - have pledged US$2.25 billion.

Actual investment was $64.33 million for the first 10 months of the year, up from $35.57 million for the same period last year. Gross domestic product is expected to nearly double to 1.78 billion yuan (about HK$1.65 billion) for the full year, up from 890 million yuan.

Mr Chen said that new projects could be examined and approved within seven days once the feasibility study and application were completed.

Within the ETDZ is a hi-tech mini-zone called Shenyang International Science and Technology Industry Park, sponsored by Sinochem Hainan Co. It is building, among other things, four factories, two high-class residential buildings, a business centre and a club house.

But the Nanhu zone - with 12 universities, 28 independent research institutes, 220 large laboratories and 23,000 scientists and technicians - is not surprisingly the heart of Shenyang's hi-tech development.

Nanhu director Wang Chengxiang said overseas investors had already set up 308 companies with a total contracted investment of US$502 million.

Hong Kong-based companies topped the list of investors, but South Korean investment was growing the quickest. Multinationals such as IBM, Bayer, Goldstar and Northern Telecom have also signed agreements.

Local companies include China's only robot production centre, and a major computer software company, NEU-Alpine.

Foreign investment has fired the zone's growth and 10.8 per cent of its foreign-backed companies represent 51.4 per cent of production. The result is that pre-tax profits in the zone leapt to 760 million yuan last year from 35 million yuan in 1991.

Mr Wang said that despite the technology transferred and designed in the Nanhu zone, it had yet to encounter intellectual property-rights violations because the companies generally did not make hi-tech consumer goods such as compact discs.