City Introduction of Shandong, China: Zaozhuang

Major Economic Indicators (2007)

Source: Zaozhuang Economic and Social Development Report 2007

Introduction

Zaozhuang is a prefecture-level city lying in the southern part of Shandong Province. Situated at the intersection of Shandong and Jiangsu Province, it borders Linyi, Shandong to the east, Pizhou, Jiangsu to the south, Jining, Shandong to the west and Zhoucheng, Shandong to the north. It covers an area of 4,563 sq km.

Zaozhuang has convenient transportation. The Beijing-Shanghai Railway, the Beijing-Fuzhou Railway and the Beijing-Shanghai High-speed Railway traverse across the city, as does the Grand Canal. The city is located 200 km from Jinan Airport in Shandong Province and 60 km from Xuzhou Airport in Jiangsu Province, both of which offer daily flights to major cities throughout China. Qingdao Port, Rizhao Port and Lianyugang Port are within 5 hours’ drive from Zaozhuang.

The city enjoys a temperate monsoon climate, with four mild, distinct seasons. The average temperature in Zaozhuang is about 15 C.

Economic Features

Zaozhuang’s economy is relatively small in Shandong Province. The GDP of Zaozhuang rose 16.0% from a year earlier to RMB 92.7 billion in 2007, comprising 3.6% of Shandong’s GDP. The city’s GDP ranked fourteenth among the cities in Shandong. The private economy, with value-added output of RMB 50.4 billion in 2007, contributed 54.4% to Zaozhuang’s GDP.

The industrial value-added output from the industrial sector in Zaozhuang grew 17.2% year on year to RMB 59.5 billion, accounting for 64.2% of the city’s GDP. Heavy industry and light industry generated RMB 35.6 billion and RMB 12.7 billion in industrial value-added output, respectively, accounting for 37.7% and 26.3% of that of the city respectively.

The city’s major industries are coal mining and production, nonmetal mining, raw chemicals and chemical products production, textiles and agricultural products processing. The industrial value-added output from these industries amounted to RMB 25.6 billion, comprising 53.1% of Zaozhuang’s total industrial value-added output.

Zaozhuang Coal Mining Group, Yikang Group and Dihao Liqor-making Group are the major enterprises in the city. Zaozhuang Coal Mining Group, originating from Zhongxing Mining, was set up in 1956. Its businesses cover coal mining and production, machinery, chemicals, electricity and construction materials. With 1.42 million in recoverable coal reserves, the group is one of top coal producers in Shandong Province.

Yikang Group, a large private firm in Zaozhuang, was set up in 1983 and specializes in food production, pharmaceuticals and agricultural products processing. Its assets amounted to RMB 220 million and the sales revenue surpassed RMB 780 million in 2006.

Zaozhuang witnessed a rapid growth in foreign trade in 2007. The total foreign trade value in the city increased 35.6% year on year to US$643 million. The city contributed less than one percent to Shandong’s total foreign trade value. The export value topped US$541 million in 2007, with an increase of 20.2% year on year. Exports of mechanical products, textile products and chemicals added up to US$354 million, accounting for 65.4% of the city’s total export value.

In 2007, Zaozhuang attracted US$145 million in contractual foreign investments, while the utilized FDI in the city grew 25.9% to US$130 million. In 2008, SK, the large conglomerate in South Korea, decided to invest US$63 million into a benzol hydro production line in Zaozhuang. The line has an annual production capacity of 150,000 tons of benzol hydro.