China's Strategy For Coastal Liberalization

China's Strategy For Coastal Liberalization & DevelopmentRam Dev Bharadwaj

Head

Department of political Science,

Rani Durgavati University,

Jabalpur (M.P.) INDIA.

China a is the most populous developing country in the world. After over two decades of reform and opening up the Chinese economy and Chinas over all national strength have grown substantially with an ever-expanding market. In recent years substantially with an ever-expanding market. In recent years ,China has redoubled its efforts to expand domestic demand and imports ,and it has managed to maintain the momentum of a sustained ,rapid and sound economic development. Todays China has entered a new stage of development in which it is building a well-to-do society across the country and speeding up the socialist modernization drive .The time had gone of Maos policy of isolation and extreme self-reliance, when China found herself 20 years behind the developed countries in science-technology and industry, 40 or 50 years behind them in agriculture. But the introduction of Chinas opening up and reform policy over the past two decades has brought high-speed development of its economy and a significant improvement in different sectors of society. Todays liberalized China is a major international producer of certain key industrial commodities: she ranks first in coal, cloth, cotton, meat, rapeseed, cement, steel and TV sets second in electricity, chemical fertilizer, foreign exchange reserves and absorbed foreign capital ;fifth in crude oil ;eight in international tourism ,tenth in foreign trade & exports and twelfth in imports . How for all these drastic changes and dynamism of Chinese personality been taking place become a deep concern and meter of discussion ,analysis and research among the political and academic leadership of the world. The present article is indented to discussed about significance of strategic situation of China and the strategic shifts in development & modernization policy of Chinese leadership which led to opening and liberalizing to Coastal areas of China .An attempt has also been made to review the impact Chinas open door policy and liberalization on Coastal cities of China At the historic stage of creating new situation in all fields of liberalization and development programmes the coastal cities have opened their door to attract more and more foreign capital ,technology and establish Chinas most important trade bases.

China is situated in the eastern part of Asia, on the west coast of the Pacific Ocean. It has a total land area of 9.6 million square kilometers. Out of which China's land border is 22,800 and its coast of the mainland covers 18,000 km. long area. China has vast territorial seas and numerous islands. Curving in a crescent around the eastern shore of the mainland, the ocean nearest to China is divided into four seas, from north to south the Bohai, Huanghai (Yellow Sea), and the East China to South China seas. Sheltered by the Liaodong and Shandong peninsulas, the Bohai is almost an island sea. The Huanghai runs from the Liaodong Peninsula to the mouth of the Changjiang (Yangtze) River. The East China sea, east of the mainland, runs from the mouth of the Changjiang River. The South China Sea begins at the southern tip of the Taiwan Strait. The coast of the mainland runs (18,000 km.) from the mouth of the Yalu River on the Chinese-Korean border in the north to the mouth of Beilum River on the Chinese-Vietnamese border in the south (1). From north to south, the most famous coastal harbors and ports and cities include (1) Dalian, (2) Qinhuangdao, (3) Tianjin, (4) Yantai, (5) Qingdao, (6) Lianyungang, (7) Nantong, (8) Shanghai, (9) Ningbo, (10) Wenzhou, (11) Fuzhou, (12) Guangzhou, (13) Zhanjiang, (14) and Beihai. The coastal water are rich in natural resources. More than 1,500 species of fish, prawns, shellfish, allege, and kelp live in the Bohai, Huanghai, and the East China and South China seas; the continental shelf also contains vast reserves of petroleum and natural gas as well as geothermal energy resources.

In 1979, the Chinese Government decided to establish the Special Economic Zones. The opening of fourteen coastal cities followed this to the outside world in 1984. Each of the 14 cities is a unique gateway to China's vast interior and has its own special advantages. Although they all share the qualities of good ports and enthusiastic, progressive leadership, they also differ greatly each with its own set of assets and liabilities, personalities and flavour. Some of the cities, such as Shanghai and Tianjin, are well-known metropolises. Other, like Beihai and Lianyungang, are now taking their first steps on the march to modernity. Still others are cultural and historical centers; some are more industrial and commercial; and a few are known as resorts that attract tourist from around the world. As China strives to export its beautiful products and import and assimilate the world's technology, 14 of these coastal cities have opened their doors to the four corners of the earth.

Talking with Prime Minister Robert Mugabe of Zimbabwe, Comrade Deng Xiaoping said that "if China is develop, it must continue opening to the outside world and proceed with its liberalization and reform. These should also include reform of the political structure, which is in the realm of the superstructure. The policy of opening to the outside world is correct, and China has benefited greatly from it. If anything, we (China) should open our doors even wider. And that's we are going to do (2). The policy of opening China's doors to the outside world has produced the results we hoped for. We (China) have implemented that policy in various ways, including setting up SEZs and opening 14 coastal cities. Wherever the open policy has been implemented there have been notable results(3).Our (Chinese) achievements in the last few years have proved the correctness of our policies of reform and opening to the outside world. Although there are still problems in various fields. Comrade Deng Xiaoping added that, I do not think they'll be too hard to solve, if we go at it systematically. Therefore, we must not abandon these policies or even slow them down. One of the topics we have been discussing recently is whether we should speed up reform or slow it down. That's because reform and the open policy involve risks. Of course we have to be cautions, but that does not mean we should do nothing. Indeed, on the basis of our experience to date, the Central Committee has been considering to accelerate the reform and our opening to the outside world (4).

In order to maximize the advantages of its coastal zones and actively develop its export-oriented economy, the Chinese Government determined, in March 1988, to appropriately expanded the three free deltas, and named the Liaodong and Jiaodong peninsulas, the Bohai valleys, Shenyang, Nanjing, and Hangzhon as the zones opening up to the outside world. Now, the eastern coastal free zone includes 288 cities and countries, embracing a population of 160 million and covering an area of 320,000 sq.m. Thus in East China, a multi-layered economic free area with key cities, consisting of SEZs, coastal cities open to outside world, coastal economic free zones and interior regions, has been formed. The formation of these zones is of great significance to the further opening of China to the outside world and to the economic development of the coastal areas. Between 1990 and 1992, the Central Government initiated the Yangpu Development zone in Hainan Province and the Pudong New Zone in Shanghai; the opening of 28 cities and 8 regions along the Yangtze River was approved, their economic activity to be funneled into the "dragon head", Shanghai's Pudong New Zone. In addition, a number of border cities were opened to foreign investment and 13 free trade areas were established in Shanghai, Tianjin, Dalian, Shenzhen, Guangzhou, Haikou, Fuzhou and other ports. Thus China has formed a multi-level, directorial mechanism for opening the country to the outside world extending from SEZs, open coastal cities and open coastal economic zones to island and border areas (5).

The establishment of free trade areas is another important measure adopted by the Chinese government to expanded its opening to the outside world and attract foreign investment. In China, a free trade area is a small special district with closed access facilities, analogous to free ports or free trade district in other countries. It is a customs service supervised area combining export processing and foreign trade, implementing special traffic policies and employing special managerial methods. From 1990 to 1992, the Chinese government approved the establishment of 13 free trade areas : (1) The 3.28 sq.km. Waigaoqiao Free Trade Area in Shanghai, located at the southern mouth of the Yangtze River, is currently China's most open free trade zone. (2) The 5 sq.km. Tianjian Port Free Trade Area, located on land adjoining Tianjin's harbour, is the largest zone of its kind in north China. (3) The 1.25 sq.km. Dalian Economic and Technological Development Zone, is an important window on north-east China's opening to the outside world. (4) The 0.2 sq.km. Shatoujiao Free Trade Area is located in Shatoujiao Town in Shenzhen. (5) The 1.35 sq.km. Fution Free Trade Area is located in Huanggang Port in south-central Shenzhen adjoining Hong Kong. (6) The 1.4 sq.km. Guangzhou Free Trade Area is located in the north-east section of the Guangzhou Economic and Technological Development Zone. (7) The Zhangjiangang Free Trade Area, located on the east side of Zhangjiagang Harbour in the lower reaches of the Yantze River, is currently China's only free trade area in an island river port; initially occupying 2 sq.km., it is projected to eventually expand to 4.1 sq.km. (8) the 1.93 sq.km. Haikou Free Trade Area is located in the Jinpan Processing Zone in Haikou. (9) The Qingdao Free Trade Area, located on the west coast of jiaozhou Bay near Qingdao, is planned to occupy 2.5 sq.kms. (10) The 2.3 sq.km. Ningbo Free Trade Area is located to the north of Belium Harbour in Ningbo. (11) The 1.8 sq.km. Fuzhou Free Trade Area is licated in the Economic and Technological Development Zone in fuzhou. (12) The Xiangyu Free Trade Area, located in the Xiamen Special Economic Zone, will initially occupy 0.6 sq.km. (13) The 2.3 sq.km. Shantou Free Trade Area is located in the Shantou SEZ. The first steps in establishing free trade areas in China are proceeding smoothly. A number of such areas, including Tianjin Port Free Trade Area, Shanghai's Waigaoqiao Bonded Area, and the Dalian and Zhangjiangang free trade areas, have

already been sealed off and are soliciting business. To date, nearly 1,000 enterprises have entered these free trade areas, with a total investment in excess of US $ 2 billion, half of which is foreign capital (6).DALIAN COASTAL CITY : LOOKING FORWARDS

Dalian is one of China's key ports for international trade. Dalian covers 12,000 square kilometers and population is about 471,000. Dalian is located on the southern most tip of the Liaodong Peninsula. Because of the moderate climate, Dalian has become an ideal place for growing rice, fruits and vegetables. Its natural resources include diamonds, limestone, dolomite, silicon, and iron. Dalian Harbour is one of China's best northern ports. It is deep, broad, ice and salt free. In 1902 Russia built the first wharf here, and later the Japanese replaced the Russian and build several others. Since liberation, the central government has invested a huge sum to revamp the old wharf and build several new ones for sundry goods, coal, hazardous goods and containers. In 1976, Dalian built China's largest deep-water wharf at Nianya Bay. Dalian Harbour can now handle more than 35 million tons of cargo a year. Dalian Harbour is also the ocean gateway to the north-eastern provinces of Heilongjiang, Jilin and Liaoning, and the eastern part of inner Mangolia. Since Central Government decided to open outside the world, Dalian has opened for foreign business, the funds and advanced technology imported will spark the economic development of the whole area.(7) President Jiang noted that the initial successes have been achieved in implementing the macro-economic regulatory policies and measures taken by the central authorities. Jiang describes the deepening of reforms as crucial in solving new contradictions and problems in China's economic activities (8). Jiang called for stepped up efforts to carry out reform in all fields, especially in the areas of the financial, investment and taxation system, to speed up the establishment of socialist market economy and gradually to institute a sound state macro-economic regulatory system.(9)

Dalian specializes in machine building, petrochemical, textiles and other light industrial products. About 80 percent of its products are shipped to other parts of the country. It leads the country in producing ships, internal combustion engines, combination machine-tools, high-speed tool steel, soda ash and synthetic cloth. More than 1,900 industrial enterprises are staffed by 580,000 people. Of these business, 59 are fairly large or key enterprises, producing more than 70 percent of the city's total value. The state policy is for this open city to absorb outside investment and import advanced technology to revamp the old enterprises rather than build new ones. The reason is clear; these enterprises have ready workshops and skilled workers and technicians. Importing some key equipment, raw and semi-finished material and advanced management methods can greatly increase their productivity and enhance the quality of their products and can even enable some factories to produce new items. Renovating old enterprises requires less money and yields quicker benefits for both the Chinese and foreign partners. The year 1983 saw the fourth technological transformation. The Plants increased productivity provides a good example for all enterprises.(10) transforming old, outdated factories into modern enterprises is a hard job, involving many trades and skills, But the people of Dalian resolved in the next few years to bring at least 40 percent of their major products to near the level the developed countries reached in the late 1970s or early 1980s. Dalian municipal government has devised a pacific programmes to turn it into an important hub of international communications, an advanced industrial base and one of the trade, finance, tourism and information centers in Northeast Asia within 20 years. Bo Xi, the mayor of the city, recently revealed details of these goals at a seminar on building a Hong Kong in the north. Led by the local development zones, Dalian is quickening its development pace to promote opening to the outside world. Following the establishment of the Dalian Economic and Technological Development Zone, Dalian has set up a high-teach district, a bonded district and the Jinshitan National Tourism Holiday District with the approval of the State, plus a small economic development area along the Shenyang-Dalian Express way and the coastline of the Yellow Sea(11) Foreign investors also enjoy preferential treatment in these zones. A development zone, through a part of a city, is somewhat independent of it. However, its prosperity adds to the prosperity of the entire municipality. The Development zone for Dalian is 33 kms. from the city limit. Of the 20 sq.km., there have been set aside to build technology-intensive enterprises. Bids have been invited nationally for the construction of an office building and some modern hotels. Work is already underway to level off the area and to ring in electricity, water, gas and communications facilities. The State Council supports Dalian's infrastructure construction in order to keep the city's urban construction in line with its economic development. Dalian plans to expand its harbours by opening up an area in suburban Jinzian Country, which will provide about 100 berths for ocean-going vessels. Backward local post and telecommunications facilities are being updated. A 160-channel microwave communications system linking Dalian to Shenyang and a 300 channel coaxial telephone cable project put into operation in 1984 (12)About 500 foreign funded enterprises have been setup in the Dalian Economic and Technological Development Zone. The five important items on the agenda all rank number one out of all development zones nationwide. They include area occupancy, total investment volume of foreign owned, joint venture and cooperative enterprises, negotiated foreign worth, actual implementation of foreign exchange earnings for exports. In 1992 alone, Dalian used foreign funds to set up 200 projects in finance, real estate, merchandising, entertainment and information services, obtaining US $ 355 million of contracted foreign funds (13). Dalian has a good land communications and transportation networks. The Dayaowan New Port Area is to see the building of 1010 deep-water berths in 1995 with annual handling capacity of 10 million tons. In the near future Dalian will open international air routes to Osaka and Sendai in Japan and Seoul in the Republic of Korea. The completion of the Dalian-Shenyang Electrified Railway will speed up the formation of this international communication hub.(14) The largest heavy oil catalyst facility being built which will have an annual production capacity of 3.5 million tons in Dalian,Liaonting Province.(15)During January-June 2001the trading volume of soybean futures at the Dalian Commodities exchange was 4.3 times of that at the Tokyo grain exchange and 23.5 percent of that at the Chicago futures Exchange . Soybeans has become a leading variety in Chinas futures sector. this variety alone has enabled the Dalian Commodities Exchange to rank first in Asia and second in the world in themes of trading volume .moreover, there is a strong inputs for development.(16) QINHUANGDAO COASTAL CITY : TOWARDS KEY WORLD PORT

Qinhuangdao is a quickly growing port on the Bohai Bay in north China. The central government has invested heavily in Qinhuangdao because of its superb natural harbour and its importance to China's modernization programmes. Situated on the coast of eastern Hebei Province, the city of Qinhuangdao includes three districts and four countries. It covers a total area of 7,523 square km. and 113 km. of coastline, it has a population of 2.52 million, 530,000 of which are urban residents. The city enjoys the oceanic climate of northern temperature zone. Mountains and hills rise in the northern part of the city, where fruit and Chinese medicinal herbs are grown. There are an estimated 600 million tons of quartz reserves and 220 million tons of limestone reserves. The city also has sizable deposits of granite and marble, as well as mining potential for coal, iron, lead, zinc, gold, silver and graphite (17). Qinhuangdao was a small fishing village. In 1898 the Manchu government opened it as a commercial port to foreign traders. Later it became a coal port for the Kailuan Coal Mine owned by a British firm in Tangshan. After 1949 the government improved and expanded the dock. Several deep-water berths were built and the port channel was dredged to make way for ships of more than 10,000 tons. In 1973 work began on an oil wharf. Fifteen months later a pier which can simultaneously berth two 20,000 ton oil tankers was completed, together with ancillary facilities to accommodate 10 million tons of oil. The new dock provided a new sea route for the oil produced in the Daqing Oilfield in Heilongjiang Province.

. The geological structure of the Qinhuangdao harbour is stable, and there is little silt. Warm currents from the Yellow sea and a high salt content combine to keep this Bohia Bay port free of ice the year round. Qinhuangdao is, in fact, north China's only ice-free port. The winding coastline, smooth tides and deep waters combine to make Bohai Bay an ideal shelter for ships 18). (With a 124.4 km. long coast, Qinhuangdao is a major agriculture base for north China. Special products include prawns, sea cucumbers and jellyfish. There are 5,600 hectares of beaches and 137,000 hectares of shallow waters suitable for the development of aquatics. The city also has 190,000 hectares of forests and orchids. There are 190 varieties of trees, and chestnuts, walnuts, peaches and grasp from the area are world famous. According to Mayor of Qinhuangdao City, Wang Daming, Primary, secondary and territory industry sectors are all developing rapidly in the city. The strongest industries are those engaged in glass, machinery, construction materials, aluminum goods, textiles and food production and ship rearing (19.Qinhuangdao is among the first 14 sea ports open to foreign investment and trade in 1984. Since than, the city has made concerted efforts to better its investment environment by upgrading its infrastructure facilities. In 1992, Qinhuangdao was listed one of the top 40 cities with the best investment environment in China. Qinhuangdao's modern international harbour remains ice-free the year round, and is equipped with state-of-the art facilities catering to every shipping need. Its 28 berths have an annual throughput capacity of 93.5 million tons... Imported 25,000 channel programmess controlled telephone exchanges now give direct dial access to large and medium sized cities throughout China and 180 countries and regions all over the world. The city can supply sufficient electricity to meet both domestic and production needs. Its 14 substations have a combined capacity of 1 million kw. When completed, the Qinhuangdao Thermal Power plant now under construction will have a total installed capacity of 1.1 million kw. The first two 200,000 kw. generators have already been put on-line. the second pair is expected to put into operation in 1994, and construction of facilities for two 350,000 kw, generators is under way (20).

As the Qinhuangdao Economic and Technological Development Zone, established in 1984 with the approval of the State Council, is only 1.5 km. from the harbor, the railway station and the city proper. This Zone was an immediate hit among investors. Among the zone's 304 enterprises, 84 are foreign funded ones involving a total foreign investment of US $ 372 million. The State Council has approved the zone's plan to expand its coverage from 1.9 sq.kms. in two stages. To make the examination and approval of foreign funded enterprises more efficient, Qinhuangdao has set up a 'Foreign Information Service Center' (21). Efforts are being made to further improve the city's investment environment. An area covering 21.6 sq.km. will be developed in Shanhaiguan following the policies applied to SEZs. Existing and planned bonded warehouses are being developed into a free trade zone. Liaoning, Jilin and Heilongjiang provinces, which make up a heavy industry base, lie to the northeast. This triangular economy zone is to develop its own economy, gear itself to north-east Asia and further enter the world marker"(22). Continuous efforts are being made to turn Qinhuangdao into a modern international city with advanced harbor facilities, high-tech industries, efficient agricultural production and development tourism. Qinhuangdao is rated by the state as a top-level tourist city. There are more than 300 tourist attractions in the mountains and forest, and along the sea, rivers, lakes and springs. Sites worth visiting include places, temples, caves and the Shanhaiguan Pass. The 'Great Wall' begins its long journey to the west from Shanhaiguan Pass (17 kilometers northeast of Qinhuangdao harbour). It goes first to north and then to the west along the mountain ridges. The bay is only 4 kms. South to the fort. The fort was built in the 14th century by a general of the Ming Dynasty (1368-1644). Near Shanhaiguan Pass is a small temple commemorating an ordinary Chinese women named Meng Jiangun. For 2,000 years, Meng Jiangnu, as a symbol of resistance and an emblem of loyalty, has earned the respect of the Chinese people.(23).

There are about 20 cooperative projects stated for Qinhuangdao in various specification in various areas.(24). Some of them are as follows: (1) To introduce magnetic controlled spray-coating equipment and technology to produce 400,000 to 600,000 square meters of coated glass per year. It has total investment of US $ 3 million, including US $ 750,000 of overseas investment. It is joint venture type project. (2) To set up a production line making 1,000 tons of clinker cement per day. It has total investment of US $ 27 million, including US $ 12 million of overseas investment, its nature is joint venture, compensatory trade and foreign loans. The Qinhauangdao Wushan Cement Factory is a Chinese partner. (3) To introduce equipment and technology to produce, 3,000 tons of spun bounds geography non-woven fabrics per year with US $ 9.6 million, including US $ 4 million of foreign investment. Its type of partnership is joint venture. (4) To introduce an assembly line with an annual production capacity of 1.5 million read only and erasable optical disks. It has 300 million yuan, including US $ 36 million of overseas investment with joint venture nature. Its Chinese partner is Qinhaungdao Electronic Glass Factory, Haigang District of Qinhaungdao.(5) To set up a production line capable of producting 2 million nickel-hydrogen rechargeable batteries annually. With a joint venture nature of partnership it has 14 million yuan, including US $ 1.6 million of overseas investment.(6) To construct the four lane Qinhaungdao-beijing Expressway Five year duration. Total investment of US $ 509.6 million (equivalent to 2.96 billion yuan). A foreign loan, exclusive foreign investment in nature and Qinhaungdao Communications Administration is Chinese partner. (7) To produce super-contortion liquid crystal displays (STN-LCD), with US $ 4 million, including US $ 2 million of foreign investment of joint venture project is to established.(8) To set up facilities to produce 1 mw-solar energy batteries project is to be established with a joint venture in nature in Qinhaungdao.(9) To set up facilities producing 15,000 model PK ratchet-action electric blocks annually, a project with a joint venture in nature has to established in Shanhaiguan with US $ 1.7 million, including US $ 700,000 of foreign investment.(10) To set up facilities to produce 5,000 low-speed, high-torque motors per year, a project is proposed by the Qinhaungdao Hydraulic pressure Equipment Factory, with 15 million yuan, including US $ 2 million of foreign investment.(11) To install ampicillin processing facilities which can produce 200 tons of ampicillin and 150 tons of cephaloridine per year, a project with US $ 4.55 million, including US $ 2 million of foreign investment is proposed by the Funing Country Amylum Glucose Factory, Qinhuangdao.(12) To contract the Qinhuangdao Shopping Centre, the largest multi-function business and commercial center in Qinhuangdao is proposed with US $ 25 million, including US $ 6.5 million of foreign investment, it has joint venture type of partnership.(13) To set up a 200,000 ton dock (342m x 58m 12.6m). Total investment of this project is US $ 80 million including US $ 50 million of foreign investment. Chinese partner of this project is the Shanhaiguan Shipyard.(14) To produce 10 million instruments and meters annually, project proposed by the Beidaihe Instrument and Meter Factory, Beidaihe District, Qinhuangdao. Nature of project is joint venture.

TIANJIN : ECONOMIC CENTRE OF NORTH CHINA

Tianjin is an old-line seaboard industrial and commercial city in north China. It is a leading port, industrial base and economic and trade centre. Tianjin (covers 11,300 sq.km. with a population of 7.85 million), faces the Bohai Sea 120 kilometers north-west of Beijing. Tianjin Port, the largest dock for foreign trade in sundry goods in the north with 37 berths to accommodate 10,000 ton vessels and 45 international shipping lines, is the estuary nearest to Beijing. The city takes a dominant position in China's Bohai Bay Economic Ring. Most of the goods and materials exported by north and northwest China are shipped out from Tianjin. Mayor of Tianjin said that, the Tianjin government has decided to place strategic focus on development of its 2,000 square.km. seashore to foreign economic growth. The area encompasses Tianjin Harbor plus economic development and free foreign trade zone and the lower Haihe River Industrial Zone (25). . Development projects are already fully arranged on the 1.2 sq.km. tract in the first phase of the Tianjin harbor Free Trade Zone. It will increase to five sq.km. in the second phase. At present, business interests from more than 50 countries and regions have invested US $ 1.5 billion here. In the free trade zone, about 40 percent of 2,00 firms have started up business. the establishment of the zone outs Tianjin in a fine position in terms of transit trade(26).During the "93 Tianjin Investment Environment Symposium" held in Tianjin, Mayor Zhang Lichang said that "Tianjin aims is to attract US $ 1.2 billion of foreign capital in the coming five years and transform itself into an international economic, financial, commercial and trade center". This symposium was attended by 35 managers from Tianjin's foreign funded enterprises (27).

Introduction of foreign capital constituted the most important activity. More than 2,200 foreign traders from over 50 countries and regions including Hong Kong Japan, the United States, Taiwan, held wide-ranging negotiation with more than 300 enterprises or company representatives from 24 of China's provinces, autonomous regions and municipalities. They signed 98 contracts and agreements for the use of foreign capital Tianjin Pipe Corporation- TPC -is Tianjin's largest industrial project (it is a major state run iron and steel enterprises), with a total investment of US $ 980 million. It's the biggest seamless pipe producing base with advanced equipment to make up for the oil pipe shortage in China (28).Italy's Zanussi Elettromeccanica (ZEM) signed an agreement to transfer ozone friendly compressor technology to its joint venture operation in Tianjin. . Since its representative office was opened in Beijing in 1981, the IRI Group, with 400,000 employees in some 400 enterprises across the world, has developed favorable relations with several of China's governmental departments, and has had success with some significant projects in the fields of energy, aviation, manufacturing of iron and steel machinery and telecommunications (29). The Tianjin Steel Tube Co. is another significant Co., which has completed in 1993. The company is designed to have an annual capacity of 500,000 tons of steel tubes. Its oil casing and boiler pipes will meet 30 percent of the domestic need.. The firm, with a total investment of 2.7 billion yuan, ships in its main equipment from Germany, Italy and the United States (30).

The Tianjin Economic and Technological Development Zone (TETDZ) is another reform measure. TETDZ is a modern industrial urban complex on the once saline infested soil near Bohai Bay, has become one of the best among China's 30 plus development zones.In 1993, foreign business people from 46 countries and regions has come to establish businesses in the zone. A foreign financed firm ratified has totalled 1,709. Contracted investment volume reached US $ 2.53 billion and US $ 1.66 billion of foreign capital has been employed (31). Yi Zhikuan, director of the TETDZ Administrative Committee, explained how the zone gained such a strong booming momentum. The crux is our adherence to a practical and realistic line. We initially handled development ourselves by depending on lones (32). Then by coming profits with borrowing and finally through accommodating funds from all channels. Starting in 1993, the zone began to accept funds from all avenues to develop plots of land. The total area covered came to 7.45 sq.km. Accommodation funds reached 550 million yuan (including US $ 38 million). A development mode on this a scale could ensure acceleration of infrastructure construction and enable the zone to develop 2 square km within its limits annually. So far, the zone has put 1.5 billion yuan (which includes 370 million yuan Bank loans) into land development and infrastructure construction. Land is placed under intensive management (33). Project in vestment averages US $ 300 per square meter on land leased out by the zone. The figures for the electronics industry and food-processing districts come to US $ 800 and US $ 1,000 respectively, putting them at advanced level in Asia-Pacific region (34).

The United Planning Co. of America spent US $ 467,000 on conducting detailed assessment of the Tianjin zone. They affirm it has surpassed export-processing districts in some other Asian countries and regions due to its fine investment environment that helps attract funds from abroad. This favorable environment has turned the zone into a source of wealth for foreign concerns. Motorola Co. of United States, which manufactures half of the world's mobile telephones, spent four years comparing and studying all development zones in China. In 1992, it invested US $ 120 million in the Tianjin zone, becoming the largest US venture in China. The corporation purchased 3,500 square meters of standard workshops and built 17,000 square meters of new factory building itself. The multinational thus decided to increase its investment in the zone to US $ 400 million within three to five years. Kodak Co of the United States also followed suit. It signed a letter of intent with the Tianjin zone to put in US $ 140 million in investment. A manager from the Motorola (China) Electronics Ltd.. said during the' 93 Tianjin Investment Environment Symposium, that the Tianjin Motorola Co has been dramatic progress. It now appears that the original US $ 120 million investment plan will be greatly expanded. the company is set to add another US $ 150 million. However, growth has to brought new problems such as shortfall of housing for staff. For example, the company would like to recruit 40 new overseas employees this year (1993) but Tianjin does not have enough flats suitable for foreigners (35). Looking all these development one can think that why are foreign business people so attracted by the zone? What is it appeal? Tian Guiming, a press spokesman for the zone once said that "in addition to providing foreign businesses with a favorable hard investment environment from the very beginning. This includes high efficiency of operation, and establishment of fine legal system rules and standard regulations, and comprehensive intermediate practices, as well as a sound social security system (36). Tainjin De Pu (DPC) Biotechnological and Medical Producer Inc. is a high-tech Sino-US joint venture set up in 1992. Business turnover that year was more than 8 million yuan and reached 15 million yaun in 1993. High efficiency has led the investment to add US $ 600,000 to its original US $ 870,000(37). The Tianjin Harbor Commercial Co.Ltd.(CBW) is China's first such warehouse jointly run by the Tianjin Post Office and the Royal Nedlloyed Group N.V. Covering 150,000 square meters with total investment of US $ 30 million, its first phase construction coast US $ 9 million(38). Company business did not proceed smoothly until early 1992. Chang Wenlin, General Manager of the Chinese side said that the company lost US $ 2.5 million in 1991 if depreciation and repayment of loans were taken into account. In 1992, the company was in the red to the tune of US $ 440,000. In 1993, the situation had returned favorable and extra dividends were drawn after making up.

Apart from all these development, the free trade zone still confronts some problems. First, any foreign financial body intending to enter the zone needs state approval and so far none exist there. Second, the zone lacks experienced professionals. Third, the Zone's development direction should be handled with dexterity. Currently, the free trade zone is treated as a special economic zone and therefore, rules and regulations should be drawn up early to help it evolve toward becoming a free port(39). The first primeval forest style garden of China is now under construction in the Tianjin Development Zone with total investment of 200 million yuan.In the section of hills and rivers, the building of a 170,000-square-meter lake with a storage capacity of half million cubic ,meters is being planned. (40)The Tianjin municipal Government has planned to create a better investment environment for foreign enterprises .First, the collection of administrative fees is regulated. A collection license and identity papers issued by the pricing department must be produced and collection standards must be strictly, adhered to when collecting fees from foreign enterprises. Second, preferential policies on investment in infrastructure projects have been formulated. Foreign investors are encouraged to invest in infrastructure projects, including roads, bridges, railways, airports, rail transit ,electric power and heating .Various measures have been adopted to guarantee reasonable investment returns, Third, a service center to promote foreign trade has been established to provide policy consultation, import and export information, marketing and logistic services for foreign investors. An investment and start-up center for small-and medium-sized enterprises from foreign countries and Hong Kong, Macao and Taiwan has been established to minimize their investment risk.(41)YANTAI: A FAIRYLAND CITY

Yantai is a small city and not as well known as, for instance, its neighbors Qingdao. Yantai is linked by rail to Qingdao and Jinan. It is connected with the rest of the country through the Lanzhou-Lianyuangang Railway. Yantai and its jurisdiction cover 19,800 sq.kms. Total area population is 8.10 million, 860,000 of which live in the Yantai urban area. With a 1,350 km coastline and 360,000 hectares of shallow water suitable for fish breading, Yantai is well known for its aquatic products, particularly its prawns. Other area resources include gold, copper, iron, lead and coal. Known in legend as 'a fairyland' city, Yantai has a pictures landscape fascinated many including Qin Shi Huang, the first emperor or the Qin Dynasty(42). Since the founding of New China in 1949, Yantai had lad Shandong Province in industry, agriculture and fishing. Its industrial output value ranks second only to Qingdao. After opening to outside world Yantai beats Qingdao in resources, and a combination of its own strength and foreign investment and technology will certainly speed development.

Yantai's Zhangyu winery, built in 1982, was the first of its kind in China. In July 1983, the Japanese Koshuen Co.Ltd. signed an agreement with the Zhangyu winery in the form of compensatory trade. The Japanese firm provides the presses, storage cans and other equipment, and the winery will pay back the investment with its products in three years. Yantai, is rich in gold. It turns out one-fourth of the country's gold every year. Yexian's Xinchssang and Jiaojia gold mines have already begun mining, and expansion is on the way. The construction of the Yantai Bonded zone has proceeded smoothly. Till August 1993, more than 10 Sino-foreign joint ventures have begun working in the zone and 18 joint venture contracts have been signed. Offshore funds, totaling US $ 21 million, mainly emanate from the United States, Japan, the Republic of Korea, Germany, Hong Kong and Taiwan (43). The zone has been divided into three functional districts to handle finance and trade, processing and storage respectively (44). Quiet changes have taken place in the trend of foreign investment pouring into the Yantai. Instead of schemes with limited funds, small risks and a short reoccupying period, more foreign capital is now being invested in infrastructure projects with substantial investment greater hazards and a long pay back period, such as those involving energy, transport and telecommunications. Reports cite the amount of foreign capital invested in the city's infrastructure projects as already exceeding US $ 160 million.

Foreign investment in Yantai infrastructures has three major characteristics, First, it involves a wide range of industrial sectors, including electric power and water supply, port and highway construction, port and telecommunications facilities, and sewage works. The power industry has attracted the most foreign capital, totaling US $ 97.4 million. Second, forms of investment have become more diversified, including joint ventures, outright monetary grants, and foreign bank and government loans. Third, the amount of foreign investment in each project is great. Around 66 percent of foreign funded endeavors have individual foreign investment exceeding Us $ 10 million. Among them are the third stage of the Longkou Power Plant with an installed capacity of 400,000 kw. and the construction of six 10,000 ton berths for second stage of the western port are of contracted foreign investment in each of the above two projects has soared above US $ 40 million(45). More noteworthy is the fact that some prominent international consortiums, such as Mitsubishi of Japan, the Daewoo Group of the Republic of Korea, the Bank of China Group of Hong Kong and two other Hong Kong based groups, have developed growing investment in Yantai. They have signed agreements or letters of intent with the city authorities on placing funds in the power industry plus highway and railway construction. One Hong Kong group alone has promised to invest 8 billion yuan in the construction of the jointly financed Moushan Power Plant.

The Yantai was among the first 14 opened coastal cities in China.In 1993,it was listed among Chinas top 50 cities in terms of comprehensive economic strength and among 40 Chinese cities with with the best investment environment. The city also took the lead in China in settling up an economic and technological development zone, high-tech development zone and bonded zone.(46)The Yantai is a favorite investment destination of members of Asia-Pacific Economic Cooperation-APEC- countries Up to now,all 20 APEC members outside Chias mainland have established trade links with Yantai and 18 of them have investments there.So far,Yantai has carried out economic cooperation with more than 50 countries and regions in the world in a variety of internationally concentional practices. The city has approved 5,826 foreign investment projects of which 1,900 have gone into operation. The combined contracted foreign capital of 215 overseas-funded projects, each with an investment of more than US$10 million, amounts to US$3.47 billion, accounting for 45.25 percent of the citys total.(47)

QINGDAO : CENTRE FOR OCEANOGRAPHY

The city of Qingdao is located in the south-east corner of the Shandong Peninsula, one of the China's most affluent area. Qingdao jurisdiction cover 10,654 square kilometers with 6.2 million of population. Qungdao's harbour (the fourth largest in the nation) is deep-water and ice-free all year. It can handle more than 22 million tons of cargo annually. Qingdao's rubber, chemical, electronics, and building material industries have been expending rapidly. Its beer, white wine and marble products are among its most popular products. The thick, leafy trees which covered mountain slopes dropping gently to the sea on three sides give this city the name it deserves-Qingdao or "Green Isle". You can see the ocean from almost everywhere in Qingdao. The city's 730 km long shore, Jiaozhou Bay and the sea around Qingdai's 20 odd island are rich in nutrients and attract almost a hundred varieties of fish, seaweed and shellfish(48). Economic potential has also sparked scientific research. Half of China's Oceanographic Research Institutes are based in Qingdao(49).

An open city featuring textile and other light industries, a harbour for foreign trade. Qingdao has well-developed industries. In an interview Zang Kun, the Mayor of Qingdao said, we are going to undertake 440 technological projects. Ocean to foreign investment in other areas which will promote Qingdao's technological advance. We have decided to stake of the Huangdao district on the western shores of the Jiaozhou Bay for on economic and technological development zone. By the end of the century we plan to build in Huangdao an industrial area of 15 square Kilometers ,100,000 people and more than 300 enterprises(50). On August 1, 1992 the Qingdao High-Tech Industrial Park has been established, and it made notable efforts to attract foreign investment and the results have been remarkable. According to Jiang Huashan, deputy director of the park's management committee, recently announced there are 273 enterprises registered in the zone, 66 of which are foreign invested. Total investment stands at 3 billion yuan, including US $ 150 million of overseas investment (51). High-Tech Industrial Park in the city will encompass 67 square km. The five districts therein are for higher learning, scientific research, tourism, living quarters and the manufacture of high-tech products. Infrastructures in the park have ready for large-scale development. It is expected that foreign-funded projects involved in high-tech area as marine science and technology, bio-engineering, new materials, fine chemical, optical mechatronics, micro-electronics and computers to move into the park. A number of large projects have already entered the park, including one which produces wireless security telecommunications with senses International Ltd., based in the United States Silicon Valley, as a partner, and a programmes controlled telephone exchange manufacturer set up in cooperation with AT & T (52).

The Republic of Korea's firms and investors are finding an excellent environment in China, particular in Qiangdao. In Qingdao Republic of Korea (ROK) funded Enterprises Society. Qingdao has 131 ROK funded enterprises, and most of them are exclusively ROK funded. The total ROK investment in Qiangdao comes to US $ 210 million, accounting for one-third of its total in China today, Qiangdao not only has the largest number of ROK enterprises but also the largest number of ROK citizens in any place on China's mainland. There are estimated to be over 1,000 ROK nationals working in the city. In the late 1980s, the ROK government formulated the West Coast Development Programmes and founded a promotion committee. At a total cost of US $ 25 billion, the programmes aims to form a Yellow Sea Economic Zone which encompasses the Shandgong Peninsula and China's east coast open cities. Qingdao, because of her strategic situation acutely sensed an opportunity. In 1988, the Qingdao International Chamber of Commerce organized the first delegation to visit the ROK and initiate contacts with ROK counterparts. Later established steady contacts with the ROK trade Society, major corporations like Samsung, Hyundai, Daewoo and Sankyong, and many small and medium sized enterprises. ROK enterprises began to invest and run factories in Qingdao in 1988. Initially there were only a few tentative, small joint ventures(53). In late 1989 encouraged by the sincere cooperative spirit esixting between Qingdao and ROK firms.Since second half of 1989, Qingdao and the ROK have established 52 joint ventures. This has resulted in total foreign investment of US $ 73.62 million, the development of 7,800 workers and the collection of US $ 3.1 million in rent and US $ 1.1 million in administrative expenses (54).

LIANYUNGANG : PROMISING PORT

, Lianyungang city covers 6.262 square with the population of 2.93 million of whom 430,000 live in the city proper. Its position at the edge of China's heartland. Lianyungang has a varied topography. In the northwest there are small mountains and hills, while in the east a plain abuts the costal line. The coastline is 119.1 km. long, and there are seven small islands (55). Compared with the other 13 open coastal cities, Lianyungang is perhaps one of the least developed. Over the past 35 years it has been built into a port city based on light and chemical industries. It now has great potential for economic development. Some of the nation's best fishing waters are off the coast of Lianyungang. The largest phosphorus ore mining and processing complex is in the city, and its valuable building materials include rock crystal, marble and granite. There are also such oil reserves in the Yellow Sea continental shelf. But more than anything else, the area's salt industry is key to the national economy. In fact, salt accounts for 20 percent of the city's total industrial output value. At a salt-making institute in Lianyungang's urban district, researchers proudly displayed one of their new products a low sodium salt that can be used by people who suffer from high blood pressure (56.)

Lianyungang's ice-free harbour is one of the nation's most promising. Located midway between Shanghai to the south and Qingdao to the north, transport distances from much of the heartland are shorter to Lianyungang. After the 1911 Revolution, President Sun Yat-Sen planned to build a harbour at Lianyungang, but the project was never carried out. In 1936 the Dutch built a 1,050 meter long break water and two docks capable of berthing six 3,000 ten-class ship. The port was revamped and expanded many times after founding the People's China. Its handling capacity grew from 56,400 tons in 1949 to 2.75 million tons in 1972, making it the nations eighth largest seaport. The city has also constructed nine docks along its 1,200 meter water front, together with supporting dockyards, water houses, loading facilities and railway lines. New 40,000 ton class cargo ships can still in and out with the tide. The port's expansion, which is one of the nation's 70 key projects in urgently needed. Work is underway on a 6,700-meter jetty and a new harbour on the wide side of the port ((57). The strategy of opening doors both inside and outside China has no doubt, contributed to the development of previously underdeveloped Lianyugang. In 1979, Liantuangang imported equipment and received lones worth US $ 500,00 from Japan to expand its prawn production. He Renhua, Mayor of Lianyungang, has been busy implementing the open policy. In November 1984, he led a negotiation team to Hong Kong to attend a foreign investment seminar sponsored by the 14 coastal open cities. During the 12-days session, Lianyungang officials negotiated with foreign business representatives on a number of projects. The proposals included port construction, a direct sea route between Lianyungang and Hong Kong, a flourmill, a fodder processing factory, a paper mill, a tannery and livestock-breading farm. The projects involved a total investment of sum US $ 360 million. Lainyungang has established trade links with more than 50 countries and regions. In 1983 it established friendly ties with Sakai in Japan, and by the end of 1983 it has utilized foreign funds to import 61 projects of advanced technology from countries (58). Lianyungang has many historical sites and scenic spots, though tourist facilities are largely underdeveloped. Among them most interesting attraction are: Primitive Rock Carvings which is found on the slope of a hill about 9 km. from the city proper. Archaeologists have suggested that these carings were does to the farming gods worshipped by tribes 3,000-4,000 years age. There are more than 100 Buddhist statues carved into the cliffs to the south of the city. Accordingly to China's classic novel 'Journey to the West' the Monkey King, a hero of the novel, was born at Huaguo (Flower and Fruit) Mountain. Located between the city proper and the port, the mountain is a scenic spot covered in streams, flowers, shrubs and trees. A top a nearby peak there is an old Buddhist monastery, which dates from Tang Dynasty (618-907). Lianyungang is an ancient city with a rich cultural heritage (s59).NANTONG: ROTTERDAM OF NETHERLANDS

The Nantong city earned its name, which means "a readily accessible southern town", because it is ideal for navigation. Nantong is situated on the north bank of the lower reaches of the Changjiang River, bordering on the Yellow Sea in the east. It has an area of over 8,000 sq.km. And a population of about 7.5 million. Nantong is one of China's largest grain producers; it is also rich in cotton, silkworm cocoons and marine products. With favorable geographical conditions, well-developed regions surround Nantong. Being the last port along the lower reaches of the Changjiang River, Nantong stands northwest of Shanghai. As one of the China's key communication hubs with the outside world, it is linked to port cities both in China and abroad. Upstream 15 provinces in China can be reached. Nantong is only 460 nautical miles from Nagasaki in Japan (60). In terms of geography, Nantong can be compared with Rotterdam in the Netherlands and New Orleans in the United States. Nantong harbour has a smooth, deepwater shipping frontage along 26 km. strength of the Changjiang River, which runs 8-16 km. wide and 11-20 meters deep. Ice and salt-free and protected from the burned of typhoons, the harbour operates year round. Two more harbours - Nantong and Langshan were added after liberation to form today's port city. The whole establishment has three deep-water berths capable to accommodating 10,000-25,000 ton ships and 10 berths for 3,000-5,000 ton ships. There are also 11 platforms built in the middle of the river, where 24 ocean going ships can have cargo unloaded onto barges. Langshan port has a 6,500 sq.m. Operation zone, which is virtually a labyrinth of water lanes and canals reaching into the northern Jiangsu inland navigation network. During May 1983 t January 1985, Nantong harbour received 50 ships from 22 countries and regions, including Panama, Greece, Japan, Britain, the United States, Indonesia, ex-Soviet Union, Cuba, Yugoslavia and Thailand. It has also established shipping links with 36 overseas parts (61).

. The city has now 48,000 cotton thread shindles, 26,000 weavers, 28,000 woolen textile spindles and can print and dye 200 million meters of fabric a year. Eight industry and textile constitute the mainstay of Nantong's comprehensive industrial setup. The machine building, electronic, chemical, pharmaceutical, building materials and foodstuff industries are also well developed (62). In addition to this peasant run factories have sprung up like mushrooms in recent years. Accounting for one-third of Nantongs total industrial output value, they have become a major new economic force. In Zhongxing, a village on the southeastern suburbs, the 800 villages in 275 families operate a fishing fleet, refrigerated storage facilities and five factories making hydraulic devices and household electrical appliances (63). The co-operation between the Nantong Machine Tools Plant and the US Tree Machine Tool Co. proved highly rewarding to both. Two companies negotiated in March 1981 and in August 1981 a five-year trade agreement was signed. Accordingly, the American firm supplied blueprints; some components and digital control devices need by Nantong factory to produce three various of digital control boring machines. The Chinese factory, on its part, was committed to sell at least 600 machines to its American partner (64).

Nantong has marked off a 4.62 sq.km. economic and technological development area at Fumin port, about 10 km. to the south-east of the city proper. Skirted by revers and linked to the city by a bridge, Fumin is an ideal location for setting up joint ventures and whooly owned foreign enterprises. The Mayor of Nantong is confident that so as the city's people work with one mind to implement the state's policy of opening to the world and enlivening the domestic economy, Nantong will surely become an important trade and transportation hub on the Changjiang, a modern textile and light industrial base and major export commodities producer were foreign capital and expertise will be put to good use (65). Nantong has developed trade links with over 90 countries and regions in the world. Since 1980 the total volume of export has been doubled. Foreign funds to the tune of $ 60,000,000 have been utilized to import more than 90 items of advanced technology and equipment from Japan, Britain, Italy, Holland, the Federal Republic of Germany, Switzerland, Hong Kong, Belgium, the United States, New Zealand and Macao (66).

Nantongs social security system also began to take shape in 1980s.Old-age insurance system reforms made progress in 1990sIn 1992,Nantong put forward to have the system cover all labores, guaranteeing pensions to be given in full and on time to retirees of bankrupt and less incurring enterprises. Their 10-year effort has made the goal become trueIn 2002 there are 600,00 enterprise employees, including those of private firm, have taken part in old-age insurance. The subsistence allowance system is the base of the Nantong social security system .By the end of 2002,10,703 residents in 4.558 households received the subsidy. (67).

SHANGHAI : LARGEST INDUSTRIAL & COMMERCIAL CITY

Metropolitan Shanghai is located half way up China's Pacific coastline with the highly developed Changjiang (Yangtze) River Delta at its back. Shanghai covers 6,186 sq.km. Area and a population of more than 12 million. Shanghai is one of the world's busiest port cities and China's largest. It has abundant technology and is richly endowed by nature. It occupies a decisive position in industry, agriculture, science technology and domestic and foreign trade, Shanghai has a modern industry of 140 years standing, with development especially rapid after Liberation. Today it has become a comprehensive industrial base with solid economic, technical and professional resources. Its industrial output value makes up about one-ninth of the nations total, and its financial income one-sixty. Both its import and export volume accounts for one-fifth of the country's total. It occupies first place in the whole country in terms of the economic results of industry (68). These achievements reinforced the confidence of Shanghai leaders to turn the city into an international economic, mercantile center within 20 years.

A cradle of China's modern industry, Shanghai has become one of the nation's key industrial bases. It processes comprehensive industrial system encompassing 15 industrial departments.. A number of key enterprises, including the Shanghai Baoshan Iron and Steel Complex, the Shanghai Petrochemicals Factory, the Shanghai No. 3 Iron and steel Plant, the Shanghai Volkswagen Automobile Co., the Shanghai Yaohua Pilkington Glass Co. Ltd., the Shanghai Bell Telephone Equipment Manufacturing Co. Ltd., the Yongxin Colour Picture Tube Plant Factory, were set up in succession. They have brought more verve and vigour to China's old industrial base. The Shanghai Shipbuilding industry is capable of building all sorts of vessels to meet the shipping classification standards of all countries. The MD83 large passenger aircraft of Shanghai have own praise and fame for quality and been sold to United States where their design originated. Nuclear Power units produced by Shanghai have entered international market. In addition, heavy load capacity rocket carriers and man-made satellites developed by Shanghai have been sent into the sky (69). The open door policy has fostered new friendships between Shanghai's intellectuals and their overseas counterparts and brought many old acquaintances back together. Deputy Mayor of Shanghai, Yuan Chongwu, focussed on the development strategy of Shanghai in future. He said "Using foreign capital, importing advanced technology and strengthening international cooperation constitute Shanghai's long-term policy for economic and social development (70).

In the immediate future Shanghai will, acting on its needs for economic and social development, emphasize the following endeavors: (1) Speeding up the technological transformation of old enterprises, especially those in meters, building materials, light industry, textile and food processing, so that by 1990 the city's industry, transportation, communications and construction will reach the level of the developed countries in the 1980s. (2) Development of new technology, while seeking a break through in microelectronics, Shanghai will gradually launch new industries such as in new materials, optical fibers, lasers, biological engineering, marine engineering and robotics. (3) Developing the Minhang and Hongqiao Development Areas, which will become Shanghai's investment centres for overseas industrialists and entrepreneurs. (4) Developing tourism, trade centres and other service industries. More tourist hotels, offices buildings, apartment buildings and recreational centers will be built. (5) Speeding up urban development. That means developing the infrastructure, including energy supply, transportation and public utilities. Shanghai will also transform and build new harbours, railway stations, airports, tunnels, highways, and subways and telecommunications facilities so as to improve the investment climate. (6) Developing sideline production in sub-urban areas, with the emphasis on milk, fresh water fish, poultry, fodder and opening up Chongming Isle. (7) To provide a good investment environment for overseas business representatives, in the near future Shanghai will build an express trolleybus line between Baoshan and Jinshan, a new sub-way and a bridge across the Huangpur River. The city's construction plans also include two tunnels under the Harangue River, railway overpasses and highways. Shanghai Harbour's cargo handling capacities will be expanded, and preparations are underway for the establishment of a Shanghai based airline.

In the 1980s, Shanghai set up three economic and technological development zones in Minhang, Hongqiao and Caohejing. In 1990s development of the Pudong New Area has been in full swings. The Minhang Development zone devoted to the processing industry has attracte many foreign firms. The Hongqiao Development Zone, focusing on finance and foreign trade, has led the nation in implementing compensated transfer of land-use rights. Caohejing Development Zone is Shanghai's base for high-tech development, testing, production, operation, training and service. Many big names in the high-tech world such as the 3M Co. of the United States, the Bell Telephone Equipment Manufacturing Co. Ltd. of Belgium, and the Daikei Data Processing Co. Ltd. of Japan have all set up there. The Pudong New Area differentiates itself from others with its large, territory sector and high-tech projects. It has been the establishment of 700 foreign enterprises and over 1,400 domestics enterprises, attracting a total US $ 1.56 million and 9.26 billion yuan (71). For more than a century, Shanghai has been a well-known commercial hub with various undertaking and a beacon for legions of traders. In 1992, the city experienced consumer commodities retail sales equivalent to 47.94 billion yuan, putting it in the nation's top rank By the end of May 1992, it had 629 commodity markets on various scales such as large specialized wholesale markets, trade centers, wholesale and transaction markets, a future market, trade warehouses, small commodity wholesale markets and collectively run trading markets (72).. Shanghai has established links with over 30,000 traders in more than 170 countries and region. Hong Kong, Japan, The United States and Western Europe are its four biggest trade partners. In the past few years, trade ties with Russian, South Korea and Southeast Asian countries also developed with great momentum. Shanghai is restoring its image as an Oriental foreign trade center that lures countless businessmen (73).

The construction of the 7,658, meter-long Yangpu Bridge, the world's largest cable-styled bridge that spans 602 meters, was completed on September 15, 1993. The magnificent bridge, with its twin towers that rise some 208 meters in height, is shaped like an inverted 'Y'. Some 256 colorful cables support the massive structure. The bridge has the capacity to handle 50,000 vehicles per day, and its height, which rises some 48 meters above water level, provides easy and navigation for 50,000 ton ships. The 1.33 billion yuan Yangpu Bridge was completed in 29 months (74). In addition to the Yangpu Bridge, two other key projects-the Luoshan cloverleaf project in Puodong and the road widening project on Jiangsu Road in western Shanghai were also completed in September 1993(75). The new highways and overpasses that have been built to link Pudong and Puxi have narrowed the gap between inadequate infrastructure and expanding city functions. Shanghai is now exploring new mechanism for the construction of urban communications and raising of funds. It intends to quickly introduce a system to raise, use and repay money independently for urban construction and the management of state owned assets (76).

Shanghai has now over 1,600 real estate companies the nearest developments to the down town area are in Hongqiao and Pudong. Villas generally cover 250 sq.m., with the largest covering 400 sq.m. They often have gardens each with an area of 200 sq.m. Currently, villas range in price between US $ 1,000-2,000 per square meter. However, those in the distant suburbs normally sell for less than 1,000 US $ 1 million (77). The introduction of new styles plays an important tole in enhancing the city's architectural level and beautifying the urban environment. The expanded opening and rapid development of Shanghai's real estate industry has also encountered various new situations and problems concerning laws and regulations. Such irregularities have manifested themselves in the following three aspects: (1) Transfer of land use rights. The city's regulations stipulate the leasd land can only be transferred after 60 percent of the land development project has been completed. However, disregarding the relevant regulations, some enterprises have received transferred land and collected funds from their enterprises who do not qualify for land use rights and are unable to participate in land development and operations. (2) Law and regulations governing development of the real estate industry are imperfect, and are thus unfavorable to the development of a secondary market. Problems are certain to arise during future real estate transactions if the problem remains unsolved. (3) Some Chinese enterprises use foreign investment to build housing in their own names. While this guarantees that the Chinese partners will retain land use and property rights in the future, such transactions are indeed abnormal. Consequently, the economic rights and interests of investors are difficult to guarantee if disputes arise (78).

Foreign-funded projects and investment have greatly increased during last few years. With the rapid growth of the private economy in Shanghai, a new investment tide is rising. In the wake of the stock, forward trading and real estate craze in the metropolis, privately owned enterprises are becoming a new investment hot spot.. They have attracted the most attention with their rational industrial structure and coordination of growth with city macro-control development programmes (79).. Scientific and technological consulting services have developed at the fastest speed, with 180 opened in the first half of 1993, or an average of one daily (80). An agreements signed in Beijing on March 16,1993 saw foreign funds that are being used by four projects (81) in Shanghai. (1) The first is the Shanghai (ford) Motor Vehicle Spare parts and Components Co. Ltd. jointly established by the Ford Motor Automobile Co. of the United States and Shanghai Yanfeng Accessories Factory under the Shanghai Auto Industrial Corp (2) The second is the co-establishment of the Shanghai Siemens Mobile Co. Ltd. by the Shanghai Changing Communication Equipment (Group) Co, The Post and Telecommunications Administration and the Xinda Communication Technique Co. of Shanghai, as well as Siemens of Germany.. (3) The third is the co-founding of the Tomson Waigaqiao Development Co. Ltd. by the Units Development Co. of the Shanghai Wagaoqiao Bonded Zone and a firm attached to Tomson of Hong Kong. (4) The fourth is the joint setting up of Shanghai Jinqiao Fujita United Development Co. Ltd. By the Shanghai Jianqiao Export-processing Zone Development Co. and the Fujita Co. of Japan., The Shanghai Yuejin Electrical Machinery Plant has engaged in over a decade of cooperation with the ABB Co., a well known transnational Britain and four other firms. Since 1992consortium and flourishing concern in Europe (82). Shanghai has clearly promoted not only expansion of numbers but also improvement of quality of Sino-foreign joint ventures in the fields of machinery and electronics industry. Efforts will be made to accelerate the pace of joint investment and cooperation with famous global firms and transnational three forms in the establishments of joint ventures with foreign business: (a) Establishment of new joint ventures; (b) Increase in investment; and (c) Participation in Sino-foreign joint ventures with substantial investment. For instance, a US firm and the Shanghai Engineering Machinery Factory will set up a new joint venture with a total investment of US $ 14 million (83). Looking to the establishment of new industrial projects in Shanghai, she has selected 14 key industrial projects for priority development. The completion of the projects will greatly aid the city's industrial restructuring (84). In addition, the micro-electronics, computer, biotechnology, optical all these fiber and computerized telecommunication, industrial robots, laser and new material industries have taken shape in Shanghai. Currently, Shanghai boasted 115 firms with quite high technical levels. By the end of 1993 their output value was about to reach 4 billion yuan or 1.5 billion yuan exceeding the 1991 figure. They are advancing much faster those traditional industries. The growth of high-tech industries have promoted readjustment of industrial structure, thus, playing an important role in the economic development of the Yangtze River delta and regions along the Yangtze River. As Hightech industry in Shanghai began in 1987 since than it has obtained 67.05 million yuan of government funds for high-tech industries and set more than 200 key projects. The seven high-tech industries in Shanghai can be divided into three categories in terms of period of development, degree of difficulty, technical and material conditions and market factors: (i) The first category involves the large-scale micro-electronics, computerizied switch boards and optical fiber telecommunications industries. In 1993 the output of integrated circuits reached total 20 million pieces in Shanghai, while total income from computer software was expected to reach 5 million yuan and total output is about 300 million yuan (ii) The second category covers modern biotechnology, laser and new materials that have initially taken shape. (iii) The third category refers to industrial robots, a field in the formative stage (85).

The city of Shanghai is foreign ahead toward the goal of establishing a socialist market economy and becoming a modern international metropolis. There are 121large terms-national companies in Shanghai alone and over a third of those are from United States. The US is second in capital investment in Shanghai, a total of 2,012 foreign-invested projects were approved in 1992, 4.5 times the number in 1991. The amount of foreign investment in 1992 was US $ 3.357 billion, 6.5 times the amount in 1991. And that was just in the 1992. All together, there are 3,289 projects in Shanghai, adding up to a total of US $ 6.689 billion (86). There are 630 American goods being developed in Shanghai, with over US $ 1.4 billion investment in them. The US is responsible for China's first insurance company; the largest hotel, the Portman Shangri-La and the very first US-Chinese joint venture, Foxboro (87).

Financial reform has also been taken place in Shanghai. Shanghai has established a financial system with the Central Bank (People's Bank of China) as its core and state specialized banks as the principal components. The setup also includes commercial, overseas Chinese and foreign banks. The city has set up a comprehensive market system of bourses, foreign exchange transaction centers, ordinary and inter-bank loans and insurance. The Bund area, known as Shanghais Wall Street, holds numerous foreign financial institutions (88). The Shanghai - based Bank of Communications started operation on April 1, 1987. As the country's comprehensive specialized bank that took the lead to espouse stocks as a means change the mold of professional banking, it transformed the long-standing, single facted and depressed situation of China's financial business and opened a new page for financial reform. When the Pudong New Area began its development and opening in September 1990, foreign banks including the Banque de I Indochine and Credit Lyonnais of France, the Citibank and Bank of America of United States, and the Dai-Ichi Kangyo Bank, Industrial Bank of Japan and Sanwa Bank of Japan all swarmed into Shanghai when it announced that foreign financial institutions and those from Hong Kong and Macao were welcome to set up wholly foreign-funded and Sino-foreign financial institutions. Sino-Japanese and Sino-French financial companies, and the first solely foreign funded financial firm, China Tai Financial Co. of Thailand and the firt joint venture bank the International Bank of Shanghai and Paris, were also set up successively (89). By the end of 1992, financial institutions operting FOREX businesses in Shanghai had established business agents and account ties with some 5,300 central institutions and their subsidiaries in more than 150 countries and regions. This promoted the development of Shanghai and the whole country's foreign trade and international financial business, creating a favorable financial environment for domestic and foreign investment. One significant financial reform move in Shanghai is the cultivation and development of securities market (90). The total market value of stocks reached 55.8 billion yuan, an increase of 19 times over 1991. In 1992, the transaction volume of the Shanghai Stock Exchanges came to 76 billion yuan, 6 times the figure of the previous years. The Shanghai securities market is spreading far and fast across the country and is expected to become a national center (91).

Shanghai has introduced market approaches by hosting a meeting of Asia-Pacific Economic Cooperation in 2001.With Chinas economy changing from a planned to a market system, many activities that were dependent on government exclusive sponsorship are new subject to market operation. As a result, Shanghais convention/exhibition sector has developed rapidly, with its economic benefits growing 20 percent annually.(92)Shanghai has given much support to the pollution free ,highly efficient convention/exhibition sector since the early 1990s.Shanghai now regularly hosts around 40 world-renowned professional and international exhibitions a year. In addition, Shanghai has successfully hosted more than 700 important international meeting. The success of APEC meeting has greatly stimulated Shanghais real estate sector. In 1001,there were 28.000 enterprises from 91 countries and regions have invested in construction projects in Shanghai. Li Ka-shing invested 390 million yuan in a project to construct 150,000 square meters of apartments and official buildings. At present,144 domestic and foreign financial institutions have been established in Lujianzui finance and Trade District ,and 49 of the 88 banks are foreign.(93). Relation between Shanghai and other APEC members are very strong. In 2000, the total trade volume between Shanghai and APEC members increased 43.5 percent over the year 1999,accounting for 77 percent of Shanghais trade volume. Till 2000,17 pf 21 APEC members had invested in 19,000 projects in Shanghai, accounting for 85.2 percent of the total foreign investment there. Contracted investment reached US$31 billion or 68.4 percent of the total.(94)To established multilateral cooperation in extensive realms and extended activities in the international community as a formal international organization the Shangahi Cooperation Organization(SCO) is playing very significant role. The basic document defines the SCO as an international organization of openness paving a way for the participating of neighboring countries and cooperation with other international organization .On June 7,2002,president of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan gathered in St. Petersburg and discussed about the future development of Shanhai The SCO is significant in many ways as after the September 11 terrorist attacks, the US realized that regional economic under-development and political instability can affect the world.

NINGBO: MECHANIZED HARBOUR

Ningbo is located in the southeast coastal province of Zhejiang, is the second largest city. Covering an area of 9,400 square kilometers, it has population of 4.8 million. Ningbo farmers grow large crops of rice, cotton and aquatic products. The area also has rich mineral resources such as flourite, lead, zinc, pyrophyllite and quartz. An ancient city, Ningbo began to trade with Korea, Japan and the Southeast Asian countries during the Tang Dynesty (618-907). During the Northern Song Dynesty (960-1127) it became one of the coutnry's major trading ports, comparable to Guangdong's Guangzhou and Fujian's Quanzhou. After the Opium War (1840-42), Ningbo was declared one of the five trading ports (95), open to the west. The founding of the People's Republic of China in 1949 boosted Ningbo's economic growth and it has gradually become a prospering port city with up-to-date facilities, a god industrial base and a diversified rural economy. In May 1984 the city was designated one of the 14 coastal cities to open international trade. Currently Ningbo is actively making use of foreign investment and improving advanced technology. Efforts are also being made to upgrade the city's existing enterprises, improve its telecommunications, air and sea transportations services, water and electricity supplies and expedite its infrastructural construction. The State Council approved the city's plan to further expand its economic relations with other countries and allowed it to establish an economic and technological development zone at Xiaogang at the mouth of the Yongjiang River. Ningbo Port today consists of the three dock areas of Beicang, Zhenhai and Ningbo. There are 21 big and small berths, including a deep-water pier for 100,000-ton vessels. When the port is fully completed the predicted volume of cargo handled will total over 26 million tons. Ningbo Port has a big capacity for transporting goods to the interior. Ningbo Port lies in the middle part of China's castling. Its international shipping routes lead to Korea, Japan and countries in Southeast Asia. It is also situated like a focal point in the centre of fan-shape inshore area. The distances are all nearly about 2,500 kilometers from Ningbo across the Pacific to North America and Oceania and across the Strait of Malacca of the Gulf area. Westward through the Suez Canal to Europe and southward around the Cape of Good Hope to South America are also about the same distance. This special geographical position provides an economical, rational centre for transportation of goods between continents.

Construction of Beilum Harbour began in 1979. It went in to operation in 1982. Belium Harbour, at a berth for 25,000-ton vessel, bags of chemical fertilizer enter a ship's hold on a conveyer belt. The old scene of men carrying sacks and baskets on their shoulders is gone forever. The port is also equipped with radar and navigational devices, enabling the ships to enter even into windy or foggy weather. This harbour is 50 meters deep, and there is a natural deep-water navigation route through which loaded 120,000-ton cargo ships can pass freely and 150,000-ton ships can enter and leave at high tide. Seeing the magnificent scene, half a century ago Dr. Sun Yat Sen envisaged a big harbour in Zhejiang Province. Ningbo is an ideal site to fulfil Sun's dream (96). Since it opened its door wider to international trade in 1984, Ningbo had nested more than 800 business representatives from 22 countries and regions. City's officials have signed contracts with some of them, and are still holding talks on many other projects. More than 150 joint ventures, wholly foreign-funded and cooperative enterprises have signed up, with 80 in operation, Close to the east side in the 1.3 square km. Xiaoshan Industrial District. Being developed with exclusive funds from Hong Kong enterpreneurs, it is the first vast tract of land in Zhejing Province to be opened up solely by non-mainland investment (97).

The Ningbo Economic and Technological Development zone, covering a total area of 29.6 sq.km, was one of the first development zones to be established in China. The government, Zhejiang Provience and Ningbo have successively invested some 6 billion yuan in many projects. There are a total of 30 major projects valued above US $ 10 million under construction, planning of negotiation, with a total investment of US $ 4 billion (98). In November 1992, the Ningbo Bonded Zone which covers area of 2.3 square km was established with state approval. Currently, the free trade zone is a free economic area opened to the widest extent in China. Besides enjoying preferential was policies granted to special economic ones and economic and technological development zones, it also implements free trade policies characterized by freedom of trade, import and export of gods, exchange of foreign currency, and entry and exit of personnel. The free trade zone also institutes the enterprise registration system under which no examination and approval are required from competent authorities, and controls over the business scope and management power are lifted Ningbo Free Trade Zone was mainly funded by the Huaneng Group. To form the United Development Co., Huaneng took up 51 percent of total investment, the rest coming from the Zhejiang Provincial government, Ningbo Government and Ningbo Port Office. The first phase of development involved 30 million yuan (99). The General Administration of Customs certified the first-phase development area of 1.2 square km. Within two short months (from November 19, 1992 date of establishment to February 28, 1993), the zone had attracted and registered in the zone, has taken advantage of the zone's closeness to Beilum Harbour Container Dock and used the free trade zone's side to handle import and export goods (100).

According to a senior official of the development zone, the free trade zone can handle trade, finance, storage, transport and export processing. The Reward (Ningbo) Wool Industry Corp., a joint venture with nearly US $ 30 million of mainly Taiwanese capital, has set up a wool factory in the zone. Statistics provided by the administrative committee showed that up to June 1993 approval had been granted to 240 joint ventures, cooperatives and wholly foreign-funded enterprises, with total investment of US $ 1.92 billion. Already 22 projects have attained US $ 10 million level or over (101). Among them the following four extra large concerns: (1) The Petrochemical Project established by the Concord Group of the United States. (2) The China National Paper Industry Co. Ltd. set up by an Indonesian group company. (3) The Belium Steel Plant, with an initial production of 1.5 million ton annually, jointly erected by the Concord Group of the United States, the Baoshan Iron and Steel Complex and the Ningbo Development Zone. In 1993, the contract for the first phase was signed with total investment of US $ 1.96 billion. (4) The Dixie Island Project. The China International Trust and Investment Corp. (CITIC) plans to inject billions of yuan for development over 15 years. At the end of 2000,Zhejiang Province has registered 18,339 foreign funded companies with an investment of US$43.6 billion. It has established economic and trade cooperation with more than 200 countries and regions in the world. (102) Investment and cooperation in the following fields are very prominent ( i )Infrastructure projects: communications, energy, water supply, sewage treatment.(ii) Farming technology, livestock product processing breeding,(iii)Petrochemical, synthetic materials ,new building materials,(iv)Machinery, electronics, chemistry and pharmaceuticals,(v)Information, photo-electro-mechanical integration, bio-engineering, environmental protection, (vi)New technology and new equipment production projects (vii) Upgrading of the conventional service industry ,new trades and management, construction, tourism, new business operation, consulting service (103)The Ningbo has been selected to introduced the policy because it has Economic and Trade development Zone(NETDZ) established in 1984 and a Free Trade Zone (NFTZ) opened in 1992. The Ningbo has a solid foundation of comprehensive economic strength. Ningbo has become a foreign investors paradise;5,040 foreign enterprises have been approved till 2001 and 40 of them rank among the 500 top global firms The NETDZ and the NFTZ are the pillars of development and the locomotives of Zhejiang opening up to the outside world. Chinas development strategy is not confined to the economic or technological but it includes and boosts tourism also. In this regard the tourism and investment attraction department of Ningbo city has launched 72 project with a total investment of US$555.43 million to develop tourism and invite investment both home and abroad. (104) Intention agreement have been signed for five projects, with a combined investment of US$108 million of which foreign investment accounts for US$8.5 million. The other 67 projects are still under negotiation with various departments, business people and consortia, both China and abroad. Under the new vision of religion combine with tourism, the Baoguo Temple will be transformed into public park featuring pseudo- classic architecture and Buddhist Culture, thus attracting more vacationers, especially those interested in Buddhism, it will cost US$10 million.(105)In addition, the Hong tang Sightseeing Agriculture Zone(HSSAZ),with an investment of US$12.06 million ,will include a fishing park, an orchard and a special animal breeding farm .The China Farm History Park(CFHP),located to the east of the ruins of Hemudu Culture ,a birthplace of civilization located into a major tourist attraction displaying Chinese agricultural relics. . .

WENZHOU : CAPITAL OF ALUNITE

Wenzhou, a city of Zhejian Province, is situated on the southeast coast. It has warm and mild weather with a mean annual temperature of about 18 C, hence the name Wenzhou, meaning "warm prefecture" in Chinese. Wenzhou has an area of 11,784 square kilometer and a population of 6.2 million. The city's jurisdiction covers two districts and nine countries. Back in 12th or 13th century, "Wenzhou had early trade relations with the countries in Southwest Asia, and in 1976, it was officially opened as a trade port for foreign powers. Surrounded on three side by mountains and facing the sea in the east, Wenzhou has over 40 mineral ores in its vast mountainous areas, including alunite, lead and zinc. With more than 300 million tons of alunite reserves, Wenzhou is called the "capital of alunite". The fertile Wenzhou Plain in the east, criss-crossed by rivers and ditches, produces abundant cash crops such as grain, tangerines, and sugar cane. With a history of over 2,400 years in growing tangerines, Wenzhou is one of the China's major commodity bases for tangerine export. Along its 350 kilimeters of coastline are fine fish farming centres, producing abundant aquatic products for exports such as swimming crabs and groupers (106). Wenzhou has always been a commercial and handicraft centre. Its cowbells milk, leather shoes, paper umbrellas, straw mats and fireworks have a high reputation. In 1983, it exported 19 million tons of dairy products, or half of the nation's total. Wenzhou has fairly well developed food, textile, fine chemical, computer, instrument and meter, shoe-making, ship building and ship-dismantling, and building material industries. During 1978-83, the value of industrial production increased 10.6 percent every year, reaching 1,800 million yuan in 1983.

Wide and with deep water, Wenzhou Port is the cargo clearing house for south Zhejiang and north Fujian, with an nnual handling capacity of 3.07 million tons. Its has direct shipping routes to Ningbo, Shanghai and Dalian, and to Japan, Korea and Hong Kong. Since becoming an open city, Wenzhou has sought to accelerate its economic growth by attracting investment and cooperation from other