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The capital of Liaoning Province, Shenyang is the industrial center and aviation hub of Northeast China. The city is only 500 kilometers away from the North Korean border and serves as a transportation and trade center with countries such as Japan, Russia, and the Koreas. Shenyang is known as one of China’s original “heavy industry bases,” featuring prominent manufacturing sectors for automotive components, building materials, agricultural product processing, chemical product manufacturing, and steel and non-ferrous metal smelting. Today, the city’s economy also relies on electronics, textiles, and pharmaceuticals, as well as other light manufacturing industries.

In 2017, Shenyang’s GDP reached $83.43 billion (RMB 586.50 billion), up seven percent from the previous year. Primary industry contributed $3.82 billion (RMB 26.82 billion) of GDP, and secondary industry contributed $32.16 billion (RMB 226.1 billion). The service sector grew 9.1 percent to $47.45 billion (RMB 333.6 billion) the same year. According to the most recent statistics released by China’s National Bureau of Statistics, import and export volume reached $12.8 billion (RMB 89.98 billion) in 2017, with a growth rate of 13.4 percent. Imports to the city increased 15 percent compared to the previous year. The United States has become Shenyang’s number one export destination and main trading partner in recent years. Major imports to Shenyang include automobile parts (particularly components of internal combustion engines), medicine and health products, steel, and pumps and liquid elevators.

Key Industries

  • Automobiles

Shenyang’s automobile market has been changing in recent years and offers exciting opportunities for U.S. companies engaged in the industry, particularly in electric car production. Heavy pollution in Northeast China has led to calls for more environmentally-friendly vehicles. In 2011, Shenyang was chosen by the central government as a model city for new energy vehicle promotion and the city has since established a special R&D fund for electric cars and components such as batteries, electric motors, and control systems. Individuals and companies purchasing new energy cars will also be entitled to additional subsidies, which have led to increased domestic demand.

Industry in Shenyang still faces challenges, including the high cost of developing clean energy automobiles and a lack of charging infrastructure. To reach its industrial output target of $110 billion (RMB 750 billion) by 2020, the city encourages domestic automakers to cooperate with overseas companies to build charging facilities and introduce foreign technology and high-end car manufacturing equipment.

  • Aviation Industry

Shenyang is one of China’s primary aviation hubs and imports an array of advanced aircraft and parts such as aircraft motors and bearings. Driven by increasing demand, Shenyang recently signed new trade agreements with Wichita, Kansas with the aim of building future trade. Wichita is known as the “Air Capital of the World”. Its economy is dominated by aircraft manufacturing and is home to several airplane manufacturers, including Cessna Aircraft Co. and Beechcraft (merged into Textron Aviation).

While foreign investment in complete aircraft production and aircraft ownership remains restricted in China, exports of certain environmentally conscious and high-tech aircraft parts to local Chinese manufacturers can receive reduced import tariffs.

  • Biomedical Technology

Shenyang is currently looking to develop seven “strategic emerging industries,” including new energy and biomedical technology. The city has recently set up a bio-medical industrial zone, which is located close to its airport and train station and specializes in developing chemical products, bio-medicine, modern Chinese traditional medicine, and medical devices.

As Shenyang’s bio-medical sector is still at an early stage of development, the city has not yet acquired the capability to carry out independent research of new medicines and consequently relies on importing foreign medicine and medical devices to maintain growth. For the past several years, medicine and health products have featured in Shenyang’s top 10 major imports. This trend looks set to continue as the local government introduces new incentives for foreign medical imports.

Shenyang and Chicago Sister City Relationship

Shenyang maintains strong business connections with the United States. Shenyang became an international sister city of Chicago in early 1985 and has since worked closely with Chicago in certain sectors, including pharmaceuticals and education. Chicago has signed the Gateway Cities Agreement with Shenyang and seven other Chinese cities to fortify Chicago’s position as a gateway for Chinese investment into the U.S.

Development Zones

Shenyang’s main development zones include:

  • Shenyang Economic and Technological Development Zone

Approved by the State Council as a national-level development zone in 1993, the Shenyang Economic and Technological Development Zone features industries such as equipment manufacturing, automobiles, auto parts, chemicals, medicine, new materials, and bioengineering. Over 100 foreign companies have been established in the zone together with local companies such as Northern Heavy Industries and Shenyang Chemicals. The zone provides financial incentives and stipends for companies engaged in modern construction and software.

  • Shenyang-European Union Economic and Technological Development Zone

The Shenyang-EU Economic Development Zone is a new project launched by the Shenyang Municipal Government and is located in the central area of the Shenyang automobile industry zone. Though mainly focused on promoting investment from the European Union, the zone has also been making efforts to increase imports of high-quality auto parts from all over the world, with an aim of building high quality automobile electronic parts and an advanced equipment manufacturing base in Northern China.

Large European manufacturers such as Michelin and BMW have already set up factories and warehouses in the zone. Special tax benefits will be granted to car exporters or manufacturers seeking to start businesses with local carmakers in the zone.

  • Liaoning Benxi Pharmaceutical Industrial Park

The Benxi Pharmaceutical Industrial Park, located at the junction of Shenyang and Benxi, Liaoning Province, was founded in 2010. It is 30 kilometers from Shenyang, and 20 kilometers from Benxi. With a land area of 176 square kilometers, it focuses mainly on the development of life and health industries centering on bio-pharmaceuticals. It was upgraded into a national high-tech industrial development area approved by the State Council in 2012.

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Northeast China

The mission of the Commercial Service office in Shenyang is to assist American businesses enter and succeed in the Northeast China market. Our jurisdiction covers the provinces of Liaoning, Jilin, and Heilongjiang, together representing a region with massive untapped potential for future growth, with a population of 120 million and a land area of 800k square kilometers.

China’s Northeast region is rich in natural resources, including coal, oil, iron ore, and timber. The region is China’s heavy industrial center for iron and steel, oil, petrochemicals, shipbuilding, machine tools, aviation, and automobile manufacturing. Encompassing one of the world’s three black earth belts, the region is also an important agricultural, animal husbandry, and forestry base for China. The Northeast is China’s largest producer of corn, soybeans, and wheat, and the production of fruit crops and aquaculture are also rising in significance.

In 2003, the central government launched the “Revitalize Northeast” initiative, offering policy and financial incentives aimed at reforming state-owned industrial enterprises and developing new industries in the region, such as information technology, food processing, and services. Since then, plans and policies have continued to develop the Northeast as an important base for China’s manufacturing equipment, new materials and energy sources, grain and agricultural/stock production, and technological R&D and innovation. The Northeast has also been designated an area for ecological protection, including the region’s wildlife, mountain ranges, wetlands, forests, and grasslands.

In China’s Thirteenth Five Year Plan (2016-2020), which outlines key economic development goals for the country, the Northeast was specifically mentioned regarding the continuing revival of the region’s historic industrial base. Key areas of development focus for Northeast China include:

  • Equipment manufacturing
  • Raw materials
  • Automobiles
  • Agricultural products and processing
  • Aviation and Railways
  • Energy
  • Financial services
  • Logistics
  • Tourism
  • Software and IT

Other development targets include deepening the reform of state-owned enterprises, supporting the region as a strategic base of national grain production and using the region as a food security base, promoting development of the private sector and SME’s, accelerating the development of high-speed rail networks and power delivery tunnels, and improving cooperation with peripheral countries Russia, Japan, and South Korea.

In 2018, Northeast China GDP grew to $858 billion (RMB 5.68 trillion), up 4.6% from 2017. Foreign trade reached $161.5 billion (RMB 1.07 trillion).

Source: National Bureau of Statistics of China; GDP converted from RMB to USD based on Yearly Average Currency Exchange Rates provided by the U.S. Internal Revenue Service

Liaoning Province

As the most industrialized province of the Northeast region, Liaoning has benefited significantly from the government’s “Revitalize Northeast” initiative, undertaken in 2003. The capital city Shenyang, together with six mid-sized surrounding cities, is expanding into a “Greater Shenyang” region. In China’s Twelfth Five Year Plan, the development of the Shenyang Economic Zone was indicated as a national priority. The zone covers 8 large cities and 7 smaller cities. Shenyang also hosted China’s 12th National Games in 2013, and infrastructure in the city and province were significantly boosted in preparation for the games.

Liaoning has the largest variety of manufacturing industries in China, including machine tools, metallurgy, transformers, petrochemicals, iron & steel, and crude oil. Well-established industries in the province include automobile parts and manufacturing, modern construction, agriculture products and processing, chemicals, and steel and nonferrous metals processing. Emerging industries include advanced equipment manufacturing, IT, biopharmaceuticals, aviation, new materials, and energy and environmental technologies.

Liaoning is the gateway to Northeast China and Inner Mongolia. Coastal city Dalian, with the biggest port in Northeast China, is being transformed by the central government into a transportation hub for Northeast Asia. Dalian also plays the leading role in the coastal economic development of the province. The regional development of Liaoning’s coastal economic belt is specifically mentioned in China’s Twelfth Five Year Plan, building on the Eleventh Five Year Plan, which outlined Liaoning’s “Five Points, One Line” development project, aimed at accelerating the development of five key industrial areas and providing interconnectivity between Liaoning’s coastal cities through the construction of a single road. China’s Thirteenth Five Year Plan also mentions the construction of a coastal high-speed railway from coastal city Dandong in Liaoning, to Fangchenggang, China’s southernmost port.

In 2018, Liaoning GDP grew to $382 billion (RMB 2.53 trillion), up 8.1% from 2017. Foreign trade reached $114.4 billion (RMB 757 billion).

Source: National Bureau of Statistics of China; GDP converted from RMB to USD based on Yearly Average Currency Exchange Rates provided by the U.S. Internal Revenue Service

Jilin Province

Jilin Province holds an important position in China’s automobile industry. Jilin currently produces around 3 million units yearly and has a goal to increase annual production to 4 million. China First Automobile Works, located in Jilin’s capital city, Changchun, is China’s largest automobile group with diversified production and assembly lines, and R&D centers for cars, trucks, and auto parts. Jilin also holds a leading position in the manufacturing of railway vehicles in China.

Petrochemicals is another important industry in Jilin, and the province is currently upgrading the industry from initial processing to fine chemical production. Jilin City is home to CNPC Jilin Chemical, China’s largest manufacturing base for propylene, MMA, and TMP, and producer of approximately one-third of China’s oil products.

The province is also focused on developing pharmaceuticals and tourism, both of which are aided by Jilin’s strategic location between mountains and rivers. In 2019, over 30,000 international athletes gathered in Changchun for a marathon organized by the provincial government as part of an ambitious program to transform the city into a sports tourism hub. Jilin also recently opened the Sino-Singapore Jilin Food Zone (SSJFZ) with Singapore's Ascendas-Singbridge (CapitaLand), a food-processing industry park for husbandry breeding, grain processing, and the supply of high-quality food products. It is strategically located between Changchun and Jilin cities, and it is a commercially-driven project.

In 2018, Jilin GDP grew to $228 billion (RMB 1.51 trillion), up 1% from 2017. Foreign trade reached $20.7 billion (RMB 136.9 billion).

Source: National Bureau of Statistics of China; GDP converted from RMB to USD based on Yearly Average Currency Exchange Rates provided by the U.S. Internal Revenue Service

Heilongjiang Province

Petrochemicals and equipment manufacturing have traditionally been Heilongjiang’s pillar industries. Heavy industry plays an important role in the provincial economy and Heilongjiang boasts several Hi-Tech Industrial Development Zones. Heilongjiang is also home to the Daqing Oil Field, the largest in China. In addition to petroleum, other important minerals include coal and graphite.

Heilongjiang boasts vast farmland and abundant natural resources such as lumber. The province is Northeast China’s most important agricultural region and serves as China’s top producer of soybeans. Due to its geographic location, Heilongjiang also plays an important role in trade between Russia and China.

In addition to strengthening its contribution towards national manufacturing and agricultural industries, the province has also focused on developing its dairy industry. Heilongjiang has the highest number of dairy cows of any province and is the country’s top milk producer. The World Bank Heilongjiang Dairy Project which recently closed helped to improve the financial viability of dairy operations within the province and led to the development of innovative technologies to reduce greenhouse gas emissions. Heilongjiang has also been actively developing its tourism industry. Capital city Harbin features the Harbin International Ice and Snow Festival – the world’s largest, attracting upwards to 20 million tourists annually.

In 2018, Heilongjiang GDP grew to $248 billion (RMB 1.64 trillion), up 2.9% from 2017. Foreign trade reached $26.4 billion (RMB 174.8 billion).

Source: National Bureau of Statistics of China; GDP converted from RMB to USD based on Yearly Average Currency Exchange Rates provided by the U.S. Internal Revenue Service

Given the speed and direction of the Northeast region’s development, excellent export opportunities exist for U.S. companies with products and services in or related to pollution control, clean energy technology, port construction, logistics development, automotive electronics, machine tools and equipment, and downstream food processing systems.

Please contact our office and let our Commercial Officer and team of Commercial Specialists help your business enter and succeed in Northeast China!

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Recent and Upcoming Events

2019 SelectUSA Investment Summit

The 2019 SelectUSA Investment Summit was one of SelectUSA's largest, drawing more than 3,100 attendees to Washington, D.C. Several new announcements were made, including nearly $100 million in new investment projects and the release of SelectUSA's case-study report on reshoring in the United States. 1,200 business investors from a record 79 international markets joined economic developers from 49 states and territories.

June 10-12, 2019

Washington, DC

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U.S. Travel & Tourism Roadshow

Brand USA is collaborating with the Commercial Services of the U.S. Consulate in Shenyang to arrange a travel/tourism roadshow in two key cities in Northeast China. U.S. partners and key travel agencies in the region will participate.

July 1-5, 2019

Dalian and Shenyang, China

Brand USA

Summer Davos World Economic Forum

Summer Davos is the foremost global business gathering in Asia, providing exchange between top business leaders and government decision-makers, as well as influential members of academia, media, and civil society. More than 1,500 participants from 90 countries will attend.

July 1-3, 2019

Dalian, China

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Northeast and Central China Franchise Roadshow

The 2019 U.S. Commercial Service Northeast and Central China Franchise Roadshow is a two-stop roadshow aimed to help U.S. franchisors expand into new regions of China, engage local investors, and explore untapped potential in these markets. After meeting in Changsha, Hunan Province, the Franchise Roadshow comes up to Northeast China, making a stop in Dalian. The event will include market briefings, presented by the U.S. Consulate General Shenyang, presentations by U.S. companies to local investors, and one-on-one matchmaking sessions.

August 28-30, 2019

Changsha and Dalian, China

More Info

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Additional Links and Information

Information on important second-tier cities in Northeast China: Shenyang, Harbin and Dalian.

Webpage of the Foreign Commercial Service at the U.S. Consulate General in Shenyang can be found here.

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