The Flanders-China Chamber of Commerce and the EU-China Business Association, with the support of Flanders Investment & Trade, organized a webinar focused on “How Bekaert is Succeeding in Weihai, Shandong province” on July 18.
Ms Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce/EU-China Business Association, introduced the speakers and welcomed the participants. Ms Sonck first visited Weihai about 15 years ago and the openness and dynamism of the people has left a deep impression. She is proud to be an honorary citizen of this vibrant and dynamic city. The Chamber has received many delegations from the city and also organized several business delegations to Weihai. Over the past 15 years, the Chamber and the Weihai municipal government have formed a strong bond to build and strengthen trade and investment relations between both sides. If companies want to keep up with the technology of the future they need to continue to invest in China.
Why Weihai? Several member companies, such as Bekaert and Beaulieu, already have major investments in Weihai, Shandong province. The city has a range of advantages that also place it ahead of many other cities. It 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. The city is logistically well connected. What makes Weihai special is also its attractive living environment, with 1,000 sq km seaside and excellent air quality. It has been awarded “Best Livable City” status.
Good cooperation is based on trust and the success of other investors gives confidence to others. Confucius said: “Crossing the river by feeling the stones”. Sharing experiences and learning from each other is also one of the services our Chamber gives to its members. We can also share the extensive network of our founding members in China.
Mr Hui Chen, Chief Representative of Weihai in the EU presented Weihai's industrial and investment environment.
City overview: Weihai is located at the core of the Northeast Asia Economic Circle and the Chinese city nearest to South Korea. It has a land area of more than 5,832 sq km, a sea area of 11,400 sq km. and a population of 2.9 million. Last year, the city's GDP reached CNY 346.39 billion. Weihai won first place in the contest “National Civilized City” and is one of the cities with the strongest spirit of contract in China and is an open and inclusive city. Weihai is one of the cities with the lowest crime rate and best safety in China. With beautiful natural scenery and a pleasant climate and environment, Weihai is known as the most suitable city for human habitation with moderate weather. The coastline of Weihai is 985.9 km long, accounting for about one-third of Shandong province and 1/18th of China. There are 185 islands and beaches along the coastline. With more than 50 A-level scenic spots, it is a famous tourist city and well-known hot spring town and the largest winter habitat for swans in Asia.
Transportation: Weihai has four international ports with 25 sea transport routes, including nine to South Korea, and international container routes to Incheon, Busan, Tokyo, Yokohama and other cities. Domestic container lines reach many cities in China. There are 16 sea routes to South Korea and Japan with 28 passenger and container ships per week. Weihai and Qingdao international airports are within two hours drive from Weihai with flights to 27 cities. It takes only 45 minutes to fly to South Korea. The city is connected to the national high-speed rail network since 2014, shortening the rail trip to Qingdao to one hour and to Beijing to 3.5 hours. There are three cargo trains a week to Europe, Central Asia and Mongolia. Goods can arrive in Europe from Korea in 18 days and from Japan in 20 days. Weihai Customs' clearance speed exceeds the national average by 30%.
Opening-up: Weihai has established sister city relations with 21 foreign cities and has economic and trade cooperation with more than 200 countries and regions. There are 1,700 foreign-invested enterprises in the city, ranking third in Shandong province, and nearly 5,000 foreign trade enterprises.
Industrial base: Asia's largest medical device production base is in Weihai, as well as China's largest aviation ground equipment manufacturing base and the largest carpet and tire production bases in China. About 40% of Chinese fishing rods are produced in Weihai. It is the country's largest recreation vehicle production base and an important ship export base. Weihai's industry covers 29 out of 31 manufacturing sectors with 20,000 industrial enterprises. Seven products from Weihai have the largest market share in the world. There are eight industrial clusters: new generation information technology; new medicine and medical devices; advanced equipment and intelligent manufacturing; new energy; health tourism; fashion and leisure sports; marine life and healthy food; and carbon fiber and other composite materials.
Human and innovation: The city ranks first in Shandong's innovation environment index with over 1,000 high-tech enterprises; 1,873 national science and technology enterprises and the output of high-tech enterprises accounting for 69.3%, ranking first in Shandong. There are 11 universities and colleges, 126,000 students on campus and 27,000 graduates per year. There are more than 800,000 workers in various industries and 300,000 technicians.
Business environment: Weihai is China's benchmark city for international business environment construction and China's city with “most happiness”, ranking first in public satisfaction in Shandong for 12 consecutive years. The government provides a one-stop registration service for foreign investors.
Contact: chenhuich2003@aliyun.com
Experiences of Bekaert of investing in Weihai were introduced by Mr Adam Touhig, Senior Vice President RR Asia, Bekaert. Mr Chen's presentation reminded him of what a beautiful city Weihai is, and a good place to invest. Bekaert started its investments in China 30 years ago in Jiangyin, Jiangsu province, and now has 15 manufacturing plants in 10 cities with 18 legal entities, including an Asia regional HQ. Total investment is exceeding €1.4 billion with approximately 8,000 employees. In 2003 the decision was made to set up manufacturing in Weihai. Bekaert Shandong Tire Cord (BSTC) is strategically located in an area with many local customers. Half of the tire makers in the world are in China and half of China's tire makers are in Shandong. Weihai has a good location, excellent investment environment, and a very supportive local government authority.
BSTC started production on October 28, 2004 and is the third Bekaert steel cord plant in China with an area of 240,000 sq m, 1,400 employees and producing 172,000 tons of tire cord per year. Registered capital has risen from USD30 million to USD100 million and total investment increased from USD30 million to USD300 million. Weihai has become Bekaert's largest tire cord manufacturing facility, where the latest technology and processes are implemented first. The company benefited from the strong support of the local government, not least during the Covid period. Tax paid in the 2005-2022 period exceeded CNY2.12 billion. BSTC has received numerous awards, including foreign investment enterprise in advanced technology and Shandong Top Brand. Bekaert looks forward to continuing working with Weihai.
A Q&A session concluded the webinar. Q.: Does Weihai offer preferential treatment to foreign enterprises? Mr. Chen: There are tax refunds and assistance to executives for example for their children to attend school. Mr. Touhig: we received subsidies and tax and employment benefits with less bureaucracy than one would imagine. Q.: What are the three main points for doing successful business in China? Mr. Touhig: It always comes down to people. Having the right people, and openness and integrity. You need to connect with the right authorities and individuals to enable a successful move forward. For the past 30 years each expansion was based on strategic planning, vision and relationships. Respect for Chinese culture and attempts to integrate will make you successful in China. Business challenges are pretty much the same everywhere.
Ms. Sonck: Later this year the Chamber will organize a small but interesting trip to Weihai. If companies are interested, they can send an email to info@flanders-china.be See you all in Weihai!
