Province Introduction of China: Heilongjiang

Key Information

Introduction
Heilongjiang is the northernmost province in China. It borders Jilin to the south, Inner Mongolia to the west and Russia to the north. The border between Heilongjiang and Russia is 3,038 km long and both sides have close economic ties with each other. Heilongjiang also has the most number of talents in China who are proficient in Russian.   
   
The province is sub-arctic in climate. Winters are long and frigid, with an average temperature of -31 to -15°C in January, while summers are short and cool with an average temperature of 18 to 23°C in July. The annual average rainfall is 500 to 600 mm, concentrated mostly in summer.   
 
 
Economic Overview

Figure 10.1.1 shows the breakdown of Heilongjiang’s GDP into sectors. The industry and service sectors take up more than 40% of the overall GDP each. Agriculture contributes significantly less to the economy, comprising only one-tenth of the GDP. 

Table 10.1.1 shows the breakdown in fixed asset investment in 2006. Real estate, manufacturing, mining, logistics, and agriculture are among the industries that have the highest fixed asset investment. Together, these industries make up nearly 70% of the total fixed asset investment. As illustrated in the “Change” column in the table, fixed asset investment has seen an overall growth in the year 2006, with the logistics industry increasing by 43.7% from the year before.

The major consumer markets are located in Harbin and Daqing. Heilongjiang also acts as a gateway for consumer products to enter the markets of Russia and the Inner Mongolia Autonomous Region. In 2006, the sales of edible vegetable oil, chemical pesticides, computers, shoes and clothing grew rapidly.   











 
Agriculture
As one of the country’s most important commodity grain production bases, Heilongjiang occupies first place in terms of both the volume of commodity grains and storage. The province’s total grain output volume was 37.8 million tons in 2006, hitting a record high.   
 
Industry
Pillar industries in Heilongjiang include equipment manufacturing, petrochemicals, energy and food processing. Table 10.1.2 shows the total industrial output of these industries. From the table, it can be observed that energy remains one of the strongest pillar industries in the province, with a total industrial output of RMB 242.8 billion. Petrochemicals, equipment manufacturing and food processing are also maintaining a stronghold in this industry, with industrial outputs of more than RMB 50 billion. 

Heilongjiang has the most energy resources in China. The Daqing Oil Field is not only the biggest one in the nation, but also one of the largest in the world. In 2006, the Daqing Oil Field produced 43.41 million tons of crude oil, accounting for 26.8% of the nation’s total output.  
 
Heilongjiang also has the fifth largest gas field and the seventh largest coal mine in the country. However, like the other two provinces with energy resources in Northeast China, Heilongjiang is facing a major resource depletion problem after decades of energy production. Oil production in Heilongjiang dropped from 55 million tons in 1997 to 43 million tons in 2006. As a result, Heilongjiang moved down the industrial chain to producing petrochemicals. The total production value of the petrochemical industry in Heilongjiang reached RMB 99.9 billion in 2006, up 15.4% from 2005.

 
Heilongjiang has become one of China’s most important equipment manufacturing bases. The total output and profits were RMB 84.0 billion and RMB 4.0 billion respectively in 2006. Large-scale equipment manufacturing enterprises have been set up in the province.    Heilongjiang has the most energy resources in China. The Daqing Oil Field is not only the biggest one in the nation, but also one of the largest in the world.
   
Examples of these are Qiqihar Heavy CNC Equipment Corp., Qier Machine Tool Group Corp., Harbin Power Equipment Corp. and China First Heavy Industries.   
 
The province is the nation’s largest organic food processing base. It has the most organic food production output as well as the largest crop area. The total output was 18.36 million tons in 2006, an increase of 22.4% from 2005. Harbin Beer, Wandashan and Red Star are among some of the better-known brands. 


Services
The service sector in Heilongjiang contributes more than 40% to its overall GDP. However, it still contributes less in total GDP than the service industry in other developed areas in China. Traditional service industries are still the focus of the service industry and the newly emerging service industries are in need of development.  
 
To improve this situation, Heilongjiang has been encouraging the development of the computer, software, exhibition, sports and entertainment industries, while at the same time, continuing the development of traditional service industries like real estate, transportation, warehousing and resident services.  
 
Among the industries in this sector, real estate is one of the key industries. Keeping up its fast growth in 2006, the gross output value of the real estate industry amounted to RMB 70.0 billion in 2006, up 22.2% from 2005.  

 
Foreign Trade and Foreign Investment
In 2006, the utilized FDI reached US$1.75 billion, 14.9% higher than the previous year. The number of projects for utilization of foreign capital was 251, 7.7% lower than 2005. 
  
   

Large foreign investors in Heilongjiang include Lane Crawford and New World from Hong Kong, Wal-Mart and Coca-Cola from U.S., as well as Mitsubishi and Kirin from Japan. 

Figure 10.1.3 shows the major import products in 2006. Mechanical and electrical products comprise nearly a third of the overall imports

Russia is the main trading partner of Heilongjiang, with trade between the two areas amounting to more than half of Heilongjiang’s overall trade. Other major trading partners include Hong Kong, U.S., Japan and Saudi Arabia (see Figure 10.1.3).

In terms of FDI, the Virgin Islands and Hong Kong have injected the largest amount of FDI into Heilongjiang, taking up 34.4% and 30.7% of the province’s overall FDI respectively. The Cayman Islands is also a key source of FDI for the province, contributing 19.3% to the overall FDI. See Figure 10.1.4. Of all the various sectors, manufacturing has received the highest amount of FDI, reaching 87.7% of the total. Other noteworthy sectors are the real estate and energy sectors, which comprise 4.9% and 3.7% of the overall FDI. Figure 10.1.5 illustrates this.

Major Development Zones
There are several major development zones in Heilongjiang. The land area, pillar industries and industrial output of these zones are presented in Table 10.1.3. 

Harbin Development Zone (HDZ)  
HDZ consists of the Harbin Economic and Technological Development Zone and Harbin High and New Technological Development Zone (both development zones are at a national level). By the end of the year 2006, 7122 enterprises had been set up in the Development Zone with a total of 168,175 employed persons. Their gross output value was RMB 85.2 billion and profits reached RMB 3.44 billion. Total exports amounted to US$754 million. HDZ was modeled after the ideal concept of having one zone comprised of various parks with various functions. These parks include the centralized parks, university parks and the administrative, scientific and technological parks.

 
Daqing High-Tech Industrial Development Zone  
By the end of the year 2006, 1860 enterprises had been set up in the Daqing High-Tech Industrial Development Zone with 74,000 employed persons. Their gross output value was RMB 41.3 billion with total profits of RMB 4.73 billion. Based on Daqing’s resource advantage, six major industries have been set up in the zone, namely, petrochemicals, new materials, electronic information, machinery manufacturing, intensive processing of agricultural and pastoral products, and pharmaceuticals.  

 
Education
Heilongjiang has 65 universities and colleges with 627,000 students. 23 of these universities have postgraduate courses. In 2006, there were 605 scientific research institutes, with a R&D cost accounting for 0.8% of the local GDP.

   
Harbin Institute of Technology’s scientific research capability has consistently been among the strongest amongst all universities in China. They are particularly renowned for their research in the fields of automatic control systems, computer science and robotics.   
 
Harbin Medical University is one of the top medical schools in China. It also serves as a national base for basic science research and teaching talent development.  
 
Harbin Engineering University is an important base for the ship industry, ocean exploration and nuclear application.  

 
Major Cities in Heilongjiang
There are a total of 13 cities in Heilongjiang. Table 10.1.4 presents the cities’ GDP, land area, population and utilized FDI. As illustrated by the statistics, Harbin and Daqing have the strongest economies in Heilongjiang, with GDPs of RMB 209.4 billion and RMB 162.0 billion respectively. Harbin also has the highest utilized FDI at US$371.5 million.

The following subsection presents a brief overview of the capital city of Heilongjiang province, Harbin.

Harbin

Introduction
Harbin, the capital of Heilongjiang Province, is the core of politics, economics, culture, science and technology, and transportation in the northeastern part of China. Its GDP accounts for 33.8% of Heilongjiang’s total GDP.

 
Investment Climate  
The pillar industries of Harbin are mechanical manufacturing (in particular, automobile manufacturing), high-technology, food processing and pharmaceuticals. 

Foreign Investment
In 2006, Harbin’s total foreign trade reached US$2.47 billion, up 2.1% from 2005, accounting for 19.2% of the whole province’s total foreign trade. Harbin is one of the major destinations of FDI in Heilongjiang. Within the same year, the city’s utilized foreign capital amounted to US$0.4 billion. The foreign investments focus on electrics, food, chemicals, the light industry, energy and real estate. Major investment partners include Hong Kong, South Korea, Singapore and Australia.  
 
Important Travel Information
Time taken to travel from Harbin Airport to:
- Beijing
- Shanghai
- Guangzhou
- Nanjing
- Chengdu
- Hong Kong
- Niigata
- Seoul  1 hour 50 mins
2 hours 40 mins
4 hours 15 mins
2 hours 30 mins
3 hours 50 mins
4 hours 40 mins
2 hours 10 mins
2 hours 20 mins