The Flanders-China Chamber of Commerce and the EU-China Business Association organized a webinar on “Experiences of Bekaert of investing in Weihai, Shandong province” on August 29, 2024.
Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce/EU-China Business Association, welcomed the participants to the webinar and introduced the speakers. She visited Weihai for the first time about 16 years ago and was impressed by the openness and dynamism of the people of Weihai. Ms. Sonck is also honorary citizen of this vibrant and dynamic city. The FCCC has received many delegations from the city and also organized business delegations to visit Weihai. Over the past 16 years, the FCCC and Weihai have formed strong bonds. Mid-November the FCCC will organize an industry visit to Weihai with a limited group of companies to explore the potential cooperation possibilities. Business leaders who are interested to join are invited to inform the Chamber.
If companies want to keep up with the technology of the future, they must continue to invest in China. Why Weihai? Several member companies such as Bekaert and Beaulieu already have major investments in Weihai. It has many advantages which place it ahead of many other cities. Weihai has a diversified economy, with a focus on many industrial clusters, excellent local government support, a skilled labor force, an efficient and business-friendly investment environment, and good educational facilities. What makes Weihai special is also its attractive living environment with a thousand kilometers of seaside. It has a healthy environment with excellent air quality.
Ms. Alexis Guo, Representative of the Weihai Global Partnership Center in Europe introduced Weihai's investment climate and the different sectors in which Weihai is strong. Weihai was one of the first coastal cities in China to open up, located in the easternmost part of Shandong province. It is the closest city to South Korea by sea. It has an international airport and the most sea routes to South Korea. Weihai is speeding up the construction of a two-way international logistics golden channel. In 2017, the first China-Europe train was launched. There are now eight trains connecting more than 50 overseas cities and stations with an annual volume of more than 10,000 TEU. Weihai has a highly outward-oriented economy and has established sister city relations with 53 cities in 21 countries around the world. It carries out economic and trade cooperation with more than 200 countries and regions. There are 1,841 foreign-funded enterprises, ranking third in Shandong province. There are nearly 5,000 foreign trade enterprises with a total import and export value in 2023 of CNY2006 billion. The contribution rate of foreign trade of 42.7% is the highest in Shandong.
Weihai has eight industrial clusters: the new generation of information technology; new medicine and medical devices; advanced equipment and intelligent manufacturing; carbon fiber and other composite materials; marine life and healthy food; fashion and leisure sports; health tourism; and new energy. There are also 10 advantageous industrial chains: medicine and medical devices; carbon fiber; printers; special purpose vehicles; marine food; textiles & garments; vessels; electric machinery; tires; and fishing gear.
In this webinar, Ms. Guo focussed on new energy, new materials, advanced equipment and intelligent manufacturing. Weihai is the only city in Shandong that gathers nuclear, wind and photovoltaic energy and energy storage. The installed capacity of new and renewable energy power generation reached 5.02 million kW, accounting for 63.6% of the city's installed power generation capacity, and the capacity planned or under construction reaches 17 million kW. The installed wind power capacity has reached more than 2 million Kw. Many large wind energy companies such as SDEE and ZTT have settled in Weihai to build an off-shore wind power industry covering large components. The installed photovoltaic capacity reached 836,000 kW at the end of 2023. The new energy storage industry is also developing with the Wendeng pumped storage power station having the largest capacity in the province. The Shidao Bay nuclear power plant is the only nuclear power base in the world that integrates the third and fourth generation power plants with a long-term planned capacity of 9 million kW. The Rongcheng International Innovation Demonstration Park for the use of nuclear energy is being built.
There are 149 large industrial enterprises in the new material industry sector. Guangwei Group produces the most varieties of carbon fiber. Other famous enterprises in Weihai include Kaitai Sports, Haoran Special Plastic, and Zhongbo Glass. There is also an advanced equipment and intelligent manufacturing industry with 355 large enterprises. Weihai is the largest motor production base in northern China; the largest recreational vehicle industry cluster and export base; the first national ship export base; and an important yacht export base.
Weihai is ranked 34th in the Top 100 of innovative cities in China. There are 11 institutes and universities where every year more than 30,000 students graduate. There are 501 R&D platforms above the provincial level and 1,700 high-tech enterprises. The output value of the high-tech industry accounts for more than 74% of the total. Weihai is a benchmark city in China for building an international business environment.
Mr. Sean Sun, Senior Vice President, Rubber Reinforcement, North Asia, Bekaert, offered insights on the experiences of Bekaert of investing in Weihai. Bekaert was established in the 1880s and has a 144+ year history of innovation, growth and value creation. It made its first acquisition abroad in 1920. Bekaert is the global technology and market leader in steel wire transformation and coating technologies with a sales revenue of €4.3 billion, serving customers in 130 countries and manufacturing in 69 plants, of which 13 are in China. The company has 24,000 employees, of whom one-third are in China. The Asia-Pacific represents about one-third of the business globally and China about 20%. Bekaert made its first investment in China in 1993 and in 2003, Bekaert (Shandong) Tire Cord Co was established in Weihai and developed into the world's largest single steel cord plant. One in three tires is reinforced by Bekaert. China represents about 30% of global tire manufacturing output with half of it located in Shandong province. Bekaert's Weihai plant is the most competitive. It is important to be part of the local community. Bekaert has brought technology and investment, but also good labor relations and contributions to society with the support of the local government.
Mr. Philip Eyskens, Vice Chairman of the Flanders-China Chamber of Commerce and Chief Legal & Compliance Officer of Bekaert, also shared his experiences. Weihai has been an excellent investment location for Bekaert in the past 20 years. Mr. Eyskens joined Bekaert 30 years ago and lived and worked in China for seven years, originally on the project team that was looking for an investment location in Shandong province, ending up in Weihai, which has proven to be an excellent choice. Bekaert always had a good relationship with the local authorities, which have been very supportive. Bekaert is also active in other sectors in Weihai such a off-shore wind power with mooring lines that anchor those big windmills to the seabed, and also in the construction area to allow buildings to be built with less concrete. It has been a very rewarding experience.
A Q&A session concluded the webinar. Q.: What are the three main points for doing successful business in China? Mr. Sean Sun: You need to be able to understand the market and the customers. You are not just a manufacturing facility, you need to embed yourself in the local ecosystem, including customers, suppliers, partners and have a good relationship with the local government. Third is to have local talent. Q.: What is your main challenge? Mr. Sun: China has become the world's largest manufacturing center after many decades. It is not only a very mature industrial base but also a very competitive environment.
