Coastal pilot FTZs in Fujian set to take on bigger role along new Silk Road

By Li Xuanmin in Fuzhou and Zhang Hongpei in Xiamen Source:Global Times Published: 2018/6/27 17:13:40

Containers are prepared for transportation from Xiamen, East China's Fujian Province to Moscow via the China-Europe freight train, on August 25, 2017. Photo: Courtesy of Xiamen C&D Bonded Logistics Co



Pilot free trade zones (FTZs) have become key agents in promoting and bolstering China's reform and opening-up policy. As the country further deepens its reform and boosts innovation in its coastal FTZs, the China (Fujian) Pilot FTZ is now ready to navigate more toward the routes of the 21st Century Maritime Silk Road, the maritime part of the China-proposed Belt and Road (B&R) initiative. Global Times reporters Li Xuanmin and Zhang Hongpei recently visited to the China (Fujian) Pilot FTZ to investigate how the zone has developed to help implement the initiative and drive further opening-up. This is the fourth part of a five-part story.

East China's Fujian Province, the starting point of the ancient maritime Silk Road, is stepping up its efforts to deepen economic cooperation with Taiwan and to accelerate further development at the core zone of the Maritime Silk Road, the maritime part of the China-proposed Belt and Road (B&R) initiative.

Li Faming, director of the management committee of the Fuzhou Area of the China (Fujian) Pilot FTZ, told the Global Times in a recent interview that the Maritime Silk Road has prompted Fujian to better connect with countries and regions along the routes and to accelerate the expansion of local enterprises in overseas markets.

Hongdong Fishery Co, based in Fuzhou, Fujian's provincial capital, is a company that is riding the boom of the Maritime Silk Road.

'Go out'

In 2010, the fishery company signed a 50-year contract to build a large-scale fishery base in the Western African country of Mauritania with an investment of $300 million. The base, which includes a complete industry chain from processing to refrigeration and production, has created 2,000 job opportunities for locals and helped the nation develop an infrastructure network.

"In the 1990s, when we were trying to 'go out' and expand our business, there were many barriers due to distrust, but now countries along the routes of the B&R initiative like Mauritania are willing to cooperate with us, because they know projects along the routes could bring mutual benefits," Chen Zhongjie, board secretary of the fishery company, told the Global Times.

Chen noted that Hongdong's investment focuses on long-term, sustainable growth, while companies in Europe mostly adopt the strategy of "coming, catching fish and leaving."

The project also elevates the value of local fish resources because the company, through processing, has begun to supply fish as food to human beings rather than as fodder for animals.

The B&R initiative also provides a platform for China and other countries and regions along the routes to communicate, spot business opportunities and discover local demands, Chen added.

For example, to facilitate cross-border fish trading in countries and regions along the B&R routes, authorities in Fuzhou have also set up the China-ASEAN Marine Product Exchange within the Fuzhou Area of the China (Fujian) Pilot FTZ. The exchange, with standard pricing mechanisms, had attracted 358 fishery companies and 2,187 dealers from Hong Kong, Macao, Taiwan as well as ASEAN countries as of February 2017.

In addition to Hongdong Fishery, other Fuzhou companies such as battery-maker SCUD and Wanquan Logistics have also set up branches in Singapore under the initiative, according to Li.

The Maritime Silk Road Mall, located inside the Fuzhou Area of the China (Fujian) Pilot FTZ, is another example of how Fuzhou is facilitating trade via its well-developed transportation network and importing products from countries along the Maritime Silk Road to diversify the Chinese mainland market.

The mall, designed for wholesale transactions, has attracted enterprises from more than 40 countries and regions along the Maritime Silk Road, including Thailand, Malaysia, Spain and Indonesia, which helped to set up exhibition halls there.

A salesperson surnamed Li at the Thailand Exhibition Center told the Global Times that Thai sauces such as sweet chili and fish have been "selling quite well" in the market.

"Many clients visit the exhibition center and then place orders, which is a great way to lift up sales," Li said.

"Fujian is a key part of the Maritime Silk Road, and we're taking advantage of the province's geographic location, as well as a number of preferential policies issued by the local government," said Chen.

According to Li, maritime, inland and air routes have been opened to connect Fujian with European countries.

For example, in 2017, the railway routes that link Fuzhou with Europe via Manzhouli in North China's Inner Mongolia Autonomous Region have been put into trial operation.

Silk Road by land

China's freight train service, officially known as the China Railway Express, is an important part of the B&R initiative.

Xiamen, a key port city in Fujian Province as well as a strategic pivot spot along the Maritime Silk Road, has opened six international lines to Europe and Central Asia.

As of May, the China-Asia/Europe freight train starting from Xiamen had operated 316 trips, with its commodity value reaching 5.16 billion yuan ($793 million), data from the Xiamen Area of the China (Fujian) Pilot FTZ showed.

Lin Zhenya, director of the Economic Development Bureau of the Xiamen Area of the China (Fujian) Pilot FTZ, told the Global Times that Xiamen is a natural pivotal junction for the Maritime Silk Road and Silk Road Economic Belt.

"Through rail-sea intermodal transport, we want to transform Xiamen into a new national logistics passageway, radiating toward ASEAN countries as well as the Taiwan region," Lin said.

The first China-Europe freight train to depart from one of China's FTZs left Xiamen in 2015 and carried electronic goods made by Taiwan-headquartered Admiral Oversea Corp to Lodz, Poland.

Xiamen and its surrounding cities are export-oriented, boasting clothes and shoemaking industries, machinery equipment and handicraft, Lin noted, adding that the port city is also ramping up efforts to import more goods from the countries and regions along the B&R routes, including auto parallel imports from Europe.

"The Russian version of the Land Rover is likely to ride on the Xiamen-Moscow freight train and arrive in China [in the future], while the current imports from Russia are mainly wood and paper pulp," said Ou Xiaping, port service manager of Xiamen C&D Bonded Logistics Co, the operator of the Xiamen-Moscow line that first set off in 2017.

At the moment, the train departs from the Xiamen Area of the China (Fujian) Pilot FTZ every Sunday and takes about 14 days to arrive in Moscow. "Since May, we have added one or two trips per month to meet Russian market demand amid the FIFA World Cup," Ou said.

"Goods related to the World Cup, like sneakers, sportswear and backpacks, have seen an obvious increase in demand recently," he noted.

Wang Xiu, vice general manager of Xiamen C&D Bonded Logistics Co, believes that the Russian market is set to embrace more growth in the future based on the good ties between China and Russia as well as Russia's recovery from US sanctions.

"Orders placed by Russian customers have witnessed obvious increase over the past few years," Wang noted.

In 2017, the total trade volume between China and Russia via Xiamen port reached 8.68 billion yuan, up 32.2 percent year-on-year, data from Xiamen's customs bureau showed.


Newspaper headline: Fujian, a key B&R player


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