Coastal pearl earns a name in its own right

LONG gone are the days when the name Beihai conjured only visions of the artificial lake in the namesake park in Beijing, or the oil field. Beihai the open coastal city - whose economy has taken off in recent years on the back of an exuberant real-estate sector - is very well known to most of Hong Kong's property magnates including Li Ka-shing. The port in Guangxi province in southwest China was one of the first batch of 14 open coastal cities named in 1984. ''A late-emerging, outstanding city with a future beyond limits'' was the comment on it from Communist Party General Secretary Jiang Zemin. ''Our ultimate goal is to become a cosmopolitan centre by the year 2010,'' said Vice-Mayor Jiang Tianchen. ''Almost all of the famous, big enterprises have come, including Kerry Properties and Hong Kong Parkview of Hong Kong. Investors from the United States, Australia and Japan also have come to study the investment potential,'' he said. ''International dignitaries such as Singapore's Senior Minister Lee Kuan Yew have also visited the city,'' he added. ''About 400 senior cadres from Beijing also came.'' Beihai offers an international access for southwest China which has a population of more than 200 million and area of 2.4 million sq m. ''It is the most important exporting port in this part of the country and has a long history of 2,000 years,'' he said. The jewels of Beihai - historically a fishing port - are its role as a coastal city close to Southeast Asia, and its convenience as port for trade with Europe. ''We face Southeast Asia and should venture out to Southeast Asia,'' Mr Jiang said. ''We aim at achieving this year a gross domestic product value of 5.9 billion yuan - which originally was our target for next year,'' he said. That would represent a growth of 24.2 per cent. In 1993, its gross domestic product stood at 4.75 billion yuan (about HK$4.2 billion), up 51 per cent. The city has assigned this year as ''tourism year'' to promote tourism growth, and is building a state-level tourist zone of 18 sq km - one of only 11 state-level tourist zones in all of China. Weizhou Island, a multi-functional development zone with an emphasis on tourism, is also being developed. It has built the biggest musical fountain in Asia, which last year attracted 1.8 million visitors, up 16.7 per cent on 1992. Beihai authorities also are applying to the central government for the setting up of a 2.3 sq km tax-free zone, expected to be approved by June, and an industrial zone also is being developed. The city has made forays into Hong Kong twice - last February and September - to attract investment, and had projects worth US$3 billion signed up by territory investors. However, about 10 per cent of those were not fulfilled due to subsequent changes in market and conditions. Beihai main city has an area of 275 sq km, but the total area under Beihai's administration - including the main city, two districts and a county - spreads over 3,337 sq km. It has a population of 1.27 million, with 240,000 urban citizens. ''Real estate development and tourism are the driving force for Beihai's economy,'' said Mr Jiang. ''Industry is our main column. But we want to have the co-development of trade, industry and agriculture,'' he said. The city also benefits from the border trade policy of Guangxi Zhang Autonomous Region which offers lower import and export taxes with neighbouring countries such as Vietnam. It is now luring foreign investment by reducing investment barriers as far as possible. Last year, the city approved 545 joint ventures - up 121 per cent on 1992 - with contracts worth US$3.63 billion (up 419 per cent), of which 76 per cent or US$2.75 billion was foreign fund (up 535 per cent). Of the ventures, 64 projects have total investment of more than US$10 million. In all, US$510 million in foreign fund was used last year (up 315 per cent), accounting for 51.7 per cent of total foreign funds used in Guangxi. Foreign investment has been attracted from 18 countries, with more than 80 per cent being Hong Kong registered companies - including foreign groups registered in Hong Kong. Foreign investment mainly targets property development, including hotels, although it also goes to industry, agriculture and fisheries. Contracts worth a total of 20 billion yuan are expected to be signed this year. They are aimed at an oil refinery, a power station, a steel plant and a chemical fibre plant. In a move aimed at raising the city's international profile and foreign investment, officials organise an International Pearl Festival - to celebrate the pearl processing industry - every two years. The festival is an occasion for foreign investors to admire pearls and take part in a trade fair at the same time, having already lured investors from Hong Kong and Singapore. While the nation-wide imposition of value added tax could put off foreign investors, Mr Jiang said: ''We will adopt some beneficial terms to make up for that.'' He would not elaborate. Last year, there were 2,606 inter-provincial economic co-operations and joint ventures with Beihai enterprises, with a total registered capital of 8.89 billion yuan. Of them, 254 already have started operations, representing a total investment of 4.1 billion yuan, of which 1.8 billion yuan has been injected. The city's industrial output totalled 5.6 billion yuan last year, up 31.8 per cent on 1992. Its agricultural output was up 17.4 per cent to 2.7 billion yuan. Fixed-asset investment rose 90.32 per cent to 4.8 billion yuan. This year, city officials expect to see US$800 million in foreign funds pour in, an investment surge of 55.6 per cent. The city aims to continue to shift its focus to industry and service from agriculture this year. The aimed proportions of output from agriculture, manufacturing and service are 28 per cent, 37 per cent and 37 per cent, respectively. That compares with last year's 30.1, 35.1 and 34.8 per cent, and 1991's 37.9, 31 and 31 per cent respectively. Its main industries are petrochemicals, steel, electronics, infrastructure and building materials. Key investment projects in Beihai include the building of a US$1.07 billion oil refinery with an annual production capacity of six million tonnes in a joint venture with the Parkview group. Another is a four billion yuan joint venture with Henderson Land and New World for a 1.2 million kilowatt power station. A four billion yuan steel plant and 1.47 billion yuan chemical fibre plant also are planned with other developers. Work on the four projects started in January. Dole, a US-based agricultural firm, has a US$40 million project under way to process agricultural products. Beihai's service industry is growing. As a port, its cargo throughput stood at 2.27 million tonnes last year, up 39.6 per cent. It also handled 12.38 million passengers. ''Private enterprises make a big contribution to the economy. Rural industries, for instance, also played an important role,'' said Mr Jiang. Last year, industrial output from rural enterprises totalled 2.3 billion yuan. The city's retail sales were 1.35 billion yuan last year, up 28 per cent. The average wage for urban residents was 4,103 yuan, and 1,275 yuan for rural residents. The city this year aims at an average wage of 5,100 yuan a year for urban residents, and 1,500 yuan a year for rural citizens. Last April, senior party leader Li Ruihuan called on Guangxi officials to make fighting poverty their prime task. However, Beihai is believed to be the richest city in the province. A Beihai investor said: ''Beihai is good because it is a small city and easy to find people. Hospitality is in its culture - this is different from big cities.'' Foreign Economic Relations and Trade Commission of Beihai deputy director Chen Xuirong admitted the city's infrastructure and lack of industry's scale still limited attractiveness to foreign investors. However, Beihai is working hard to improve the situation. It acknowledges the importance of infrastructural support for economic development. In 1992-93, it invested 6.4 billion yuan, with work worth 3 billion yuan completed. During the two years, 71.76 sq m of road area was added, taking the total road area of the city to 20 per cent, compared with 12.6 per cent in Shenzhen - thanks to a policy of building wide roads to avoid traffic jams. STATISTICS: Population: 1.27 million, of which 240,000 are urban citizens. Area: 3,337 sq km, of which 275 sq km is Beihai main city - the coastal open city. Total foreign joint ventures approved by the city in 1993: 545. Total investment agreed by foreign joint ventures approved in 1993: US$3.635 billion, of which US$2.757 billion was foreign fund. Total foreign funds used in 1993: US$510 million, accounting for 51.7 per cent of total foreign funds used in Guangxi. Gross domestic product in 1993: 4.75 billion yuan, up 51 per cent on 1992. Industrial output in 1993: 5.6 billion yuan, up 31.8 per cent on 1992. Agricultural output in 1993: 2.7 billion yuan, up 17.4 per cent on 1992. Fixed asset investment in 1993: 4.8 billion yuan, up 90.32 per cent on 1992. CONTACTS: Vice-mayor: Jiang Tianchen 2 Dong Er Xiang, Beihai Tel: (0779) 334356 Vice-mayor: Wang Fangchun 2 Dong Er Xiang, Beihai Tel: (0779) 223391 Foreign Economic Relations and Trade Commission deputy direc- tor: Chen Xuirong 4 Bei Bu Wan Road East, Beihai Tel: (0779) 254480 People's Bank of China Beihai Branch deputy director: Rong Minggao Bei Bu Wan Road West, Beihai Tel: (0779) 334093 Construction Commission deputy director: Da Hegao 4/F, Construction Comm. Building, Beihai Da Road, Beihai Tel: (0779) 334152