Skills shortage a big concern
The Dalian government has made efforts to make the city more attractive for foreign investment, but the lack of upper-level management and skilled employees is still a major concern, according to Tony Balow, chairman of AmCham-China, Dalian Chapter executive committee. The chapter was launched in early 2009 in response to the rapid growth of Dalian and the American business community.
Japanese and Korean companies have long had an established base in the city due to its proximity to their home markets. United States businesses have also begun to recognise the port's vast potential and benefits. For instance, Intel launched its first wafer plant in Asia in Dalian last year.
Balow says over the past decade, Dalian has created an investment environment by targeting development in priority sectors: equipment and manufacturing; logistics and transport; financial services; and IT/business process outsourcing industries.
The quality of life for Dalian residents has also improved markedly. Local authorities have made significant efforts to improve air and water quality, increase transport links and enhance investment promotion.
However, in order to attract more foreign investment there remain several areas for improvement, he says. These include improving the quality of health care services, enhancing public transport, addressing the need for more business-oriented education programmes, enhancing transparency in local policies and regulations, and creating jobs.
Balow says one of the biggest problems for international companies is to find and retain qualified upper-level management and skilled employees.
He says: 'Dalian has difficulty attracting talent from the outside because parents do not see the same educational opportunities for their young children as they do in Beijing, Shanghai and other cities. Despite having 14 universities, Dalian still needs more investment in higher education and skilled labour training.'
Dalian has several advantages for those looking for business opportunities, Balow says. Its location offers easy access to Korea and Japan, and northern China.
It has robust year-round port facilities for those industries dependent on sea transport.
For US companies, it is also relatively close to the US consulate in Shenyang, which will be even more accessible with a high-speed rail link due to open in the near future.
'Companies who will require a large number of Western workers should carefully evaluate the medical, educational, and housing infrastructure as part of their set up,' Balow says. 'The maturity of these areas has grown dramatically but still remains limited in terms of both options and extent of service.'