The Zhoushan Archipelago in east China’s Zhejiang Province, which consists of 1,390 islands, won approval to build a state-level new area and develop the marine economy.
The new area is China’s fourth development area to receive state-level policy support to allocate resources and attract investment, next to the Pudong New Area of Shanghai, Binhai New Area of Tianjin and Liangjiang New Area of Chongqing.
But it is China’s first state-level development area oriented toward the marine economy, said Lu Zushan, Governor of Zhejiang Province.
The Zhoushan Archipelago, located at the juncture of China’s eastern coastline, has an ideal location, marine resources and industrial strengths working to its advantage.
The Zhoushan new area is expected to inject new steam into Zhejiang, one of China’s major manufacturing powerhouses in the Yangtze River Delta, while assisting development of China’s marine economy and deploying its overall strategies for regional development, Lu said.
National importance
The blueprint for the Zhoushan new area got approval from the State Council in less than 18 months, while the previous one, the Liangjiang New Area, took two years. The contrast reflects the imperative need for China to shift focus from its populous land to the sea for future growth, said Yi Peng, a researcher on China’s regional economy at Peking University, in an article for China Business Journal.
China now has only 280,000 square km available for future industrial development, or 3 percent of its total land area, said a development plan of national major functional regions released by the State Council in June 2011. In contrast, China has a vast sea of abundance that stands at more than 3 million square km.
The State Council on March 1, 2011 approved the development plan of Zhejiang Marine Economic Zone, of which the Zhoushan new area is a key component. Previous to that, it approved a similar plan on the Shandong Peninsula on the north coast on January 4, 2011 and will have a third one in Guangdong Province on the south coast.
“By then, China will rely on the three demonstration zones to implement its national strategy of building up a competent marine economy,” Yi said.
Industrial output of Zhejiang’s marine sector stood at 280.9 billion yuan ($43.2 billion) in 2009. The demonstration zone is expected to yield 700 billion yuan ($107.7 billion) by 2015, accounting for 16 percent of Zhejiang’s GDP and 15 percent of national marine industrial output, according to the blueprint.
And Guangdong, China’s manufacturing hub, is also eyeing at a similar project to push forward its efforts of economic restructuring. At present, the marine sector contributes to nearly 20 percent of Guangzhou’s GDP, said Fan Hengshan, Director of the Regional Economy Division under the National Development and Reform Commission.
The winner
Zhoushan sets itself apart from competitors as it strives to achieve the national title of marine economy demonstration area, said Lu. With a population of 1 million, Zhoushan is China’s only county-level administrative city established on a series of islands. With a land area of 1,440 square km, it covers 20,800 square km of inland sea.
“Location is the archipelago’s unique advantage when it comes to developing the marine economy, because it marks the shortest route to the ocean within China’s territory,” Lu said.
As to its rich marine resources, the archipelago boasts a 280-km-long deep water coastline, taking up 18.4 percent of the country’s total. Of the total, more than 100 km run deeper than 20 meters, which is ideal for Zhejiang to forge a large port comparable to Shanghai. In addition, Zhejiang has nearly 3,000 islands, which account for 40 percent of China’s total.
The third advantage lies with Zhoushan’s full-dimension marine industry supported by port logistics, coastal industries, marine tourism and fisheries, which stands at 68 percent of its GDP, Lu said.
Zhoushan is China’s largest fishery produc
tion and processing base and largest fishing product exporter. And the merger between the ports at Zhoushan and Ningbo of Zhejiang turned Ningbo-Zhoushan Port into one of the world’s largest in terms of throughput, which reached 630 million tons last year, said Lu.
The blueprint
With these advantages, the new area will be fostered into a trade center for storing, transporting and processing bulk commodities. It will become an important gateway on the eastern seaboard, a comprehensive demonstration zone for island protection and development, a modern ocean industrial base, and a pilot region for integrating land and sea resources, according to the development plan.
One key component of the development plan concerns innovation, specifically how to set up an institutional infrastructure that will help make that blueprint a reality, Lu said.
Institutional innovation will take place in at least four areas such as opening up inland sea and islands within its administration, fundraising for related development projects, attracting professional talent and effective administration, said Lu.
“We are thinking of ways to avail ourselves of direct financing, take advantage of Zhejiang’s rich private capital and allow the private sector to play an active role in related investments,” he said.
Zhejiang is reputed for its strong private economy. The province’s private capital should be encouraged to enjoy a piece of the Zhoushan cake by investing in port logistics, large commodity storage and transportation, shipbuilding and marine engineering, creating win-win results, Yi said.
Zhang said the output of Zhejiang’s marine sector stood at 350 billion yuan ($53.8 billion) in 2010, which came mostly from Zhejiang’s powerful private economy.
“There will be barely any barriers preventing private capital from investing in Zhejiang’s marine sector,” Zhang said, adding the shipyards in Ningbo and Zhoushan are all privately owned and operated.
Liang Liming, Secretary of the Zhoushan Committee of the Communist Party of China, pointed out the importance of different development strategies for these scattered islands. Major projects will be carried out on the largest island, where the Zhoushan Municipal Government is seated, and islands nearby, while the remaining islands will focus on tourism, advanced manufacturing or clean energy, in line with their individual advantages, Liang said.
“We expect the new area to play a pioneering role in the province’s endeavor to explore marine resources in a comprehensive way, develop its marine economy and become a new growth engine in the Yangtze River Delta,” said Lu.
Zhejiang needs to forge a brand of Chinese characteristics for the Zhoushan new area because it will serve as a demonstration platform for China’s efforts to shift from a land-oriented to an ocean-oriented economy, Yi said.
In its pursuit to establish a trade center, Zhoushan should model itself after London to have a shipping index, offer boat charter, rental and leasing services, and provide related economic information instead of pursuing only the largest throughput volume, Yi said.