City Introduction of Shandong, China: Zibo

Zibo

Major Economic Indicators (2007)

Source: Zibo Economic and Social Development Report 2007

Introduction

Zibo, lying at the intersection of the Luzhong mountainous region and the Lubei plain, is seated in central Shandong Province. The city is adjacent to Weifang to the east, Linyi to the south, Laiwu and Tai’an to the southwest, the provincial capital Jinan to the west, Dongying to the northeast, and Binzhou to the north.

The Jinan-Qingdao Railway, the Bingzhou-Laiwu Highway, State Highway 205 and State Highway 309 go through the city, connecting the city with other major cities in Shandong. Zibo’s downtown is only 70 km from Jinan Yaoqiang International Airport. Qingdao Port, the world’s seventh largest port by cargo throughput in 2007, is 300 km from Zibo. In 2007, Qingdao Port handled 265 million tons of cargo, 18.2% more than in the previous year, and 9.46 TEUs , an increase of 22.9% from the previous year.

Zibo is rich in mineral resources such as iron, fireclay, coal and bauxite. Jinling and Heiwang are the two major iron ore reserves in Zibo, and has proven iron ore reserves of 140 million and 39.6 million tons, respectively.

Economic Features

In 2007, Zibo’s GDP was increased by 16.0% from a year earlier to RMB 194.5 billion, comprising 7.5% of Shandong’s GDP and ranking fifth among the cities in Shandong Province. The private economy gained RMB 121.6 billion of industrial value-added output, contributing 62.5% to Zibo’s GDP.

Zibo is a traditional industrial city. The value-added output from the industrial sector rose 15.4% year on year to RMB 125.6 billion, accounting for 64.6% of Zibo’s GDP. Metallurgy, machinery, construction materials, ceramics, pharmaceuticals, chemicals and textiles are the major industries in Zibo. In 2007, Zibo produced 15.6 million tons of raw coal, accounting for over one tenth of the total raw coal output in Shandong Province.

Leading enterprises in Zibo include Chalco Shandong Company, Sinopec Qilu Company, Jincheng Petrochemicals and Zibo Coal. Chalco Shandong Company is a subsidiary under China’s largest aluminum producer, Aluminum Corporation of China (Chalco). Established in 1954, Chalco Shandong Company was the first aluminum producing base in China. It has an annual aluminum production capacity of 2 million tons.

Sinopec Qilu Company is a unit under China Petroleum and Chemical Corporation (Sinopec), the oil giant in China. It was formed in 1966, and its products range from refined oil, synthetic rubber, and fertilizer, to ethylene and fiber. It is capable of refining over 10 million tons of oil per year. Sinope Qilu can produce 0.8 million tons of ethylene and 1.1 million tons of rubber annually.

The value-added industrial output from the service sector in Zibo soared 15.4% year on year to RMB 61.4 billion in 2007, accounting for 31.6% of the city’s GDP. The sales of consumer goods hit a record high of RMB 59.3 billion in 2007, up 18.7% year on year, accounting for over 7% of Shandong's Province's total sales of consumer goods.

The foreign trade value amounted to US$4.7 billion, accounting for 3.8% of Shandong Province’s total foreign trade value. The export value reached US$3 billion, with a rise of 19.5% year on year. Exports to the E.U., the U.S., South Korea, Southeast Asia, Middle East and Japan added up to US$2.1 billion, comprising 70% of the city’s total export value. Electronic and mechanical products, construction materials, pharmaceuticals and coals are the major export products of Zibo.

In 2007, the utilized FDI gained 16.9% year on year to end at US$432 million. U.S.-based PPG, Japan-based Ebara, and the Italian IMA Group, along with other large multinational companies, have made investments in Zibo.