EurAsia Info Exclusive interview with Mr Lu Lin, Member of the Party Committee and Vice Mayor of Dalian
On 25th April 2017, Mr Lu Lin, Vice Mayor of Dalian city in China, visited the headquarter of Eurasia Info in Zurich together with Ms Wang Liying, Director of Foreign Trade and Economic Bureau of Dalian city, Mr Zhang Xiaopeng, Director of Foreign Affairs Office, Mrs Liu Mingming, Vice Director in EU-Africa Department of Foreign Affairs Office, and Mr Li Xiang, Vice Director in International Liaison Department of Foreign Affairs Office. Vice Mayor Lu was interviewed by EurAsiaInfo, President of Eurasia Info, on various topics, the investment environment, the current stage of economic and social development in Dalian as well as the closeinteraction between Dalian and Switzerland.
Five Cooperations Cause Tremendous Changes for Dalian City
EurAsiaInfo: Dalian and Switzerland have started close cooperation and superior interaction in multiple fields. Since Dalian is the permanent host city of the “Summer Davos” World Economic Forum meeting, could you briefly introduce the Summer Davos and Dalian?
Lu Lin: From the snow-capped Alps to the booming shore of the Yellow Sea, Eastern and Western cultures cross the Asian-European continent to come together in Dalian, China. During the eight years from 2007 to 2015, the “Summer Davos” forum, taking place very second year in Dailian, focused on themes like “the changing power balance”, “growth regeneration”, “focus on growth quality and mastery of economic pattern”, “innovation: the inevitable tendency”, “description of the new growth blueprint”.
The initial holding of summer Davos in Dalian city is seen as the most important turning point of World Economic Forum in the new century. Up to now, the five-Davos forums in Dailian have caused significantchanges for Dalian.
EurAsiaInfo: What are the specific manifestations of the tremendous changes thatDavos brought to Dalian?
Lu Lin: First of all, the Davos forum is the important window that could show new trends in world economic development and outline development thoughts. As said by Major Xiao Shengfeng of Dalian City, “Summer Davos Forum is the important window where we could keep up with world economic tendency and development trend.” Throughout the themes of summer Davos from 2007, the general line of world economy and the perspective of global elites could be clearly perceived.
By carefully summarizing the new ideas in the forum, it could be easily found out that many new terms and new thoughts have been incorporated into the proposition of Dalian development, such as “Internet”, “newly emerging industry”, “intelligent city”, “industry 4.0” and “big data”. According to the Dalian government reports from 2008, we have found out that all relevant contents of the Davos Forum have always beenmentioned in the reports.
EurAsiaInfo: Do the government reports mention the changing focus of the forum over the years?
Lu Lin: Of course. In 2008, the government emphasized the development of Internet technology, including projects like “Lunshun Software Industry Belt”, “Tengfei Software Garden”, “Dongruan International Soft Park” and so on. In 2010, the government emphasized the cultivation of newly emerging industries.
Dalian successfully became the first location for “national high-tech service industry bases”, the sample city for national intellectual property work and pilot city for “three-network integration”. In 2012, Dalian city became a national modern service industrialization base, innovative software industry base and pilot city for science, technology and finance combined. Cross-border CNY settlement in Dalian city ranked first in Northeast China and its finance competitiveness got the eighth rank in China.
In 2014, Dalian’s newly emerging industries showed prosperous development and its ocean engineering and nuclear power equipment production ability ranked first in China. Dalian city developed 107 innovation-driven projects in Internet and intelligent equipment manufacturing. The financial center indicator of Dalian city achieved the sixth rank among identical cities. It also became the first “intelligent city” and pilot city for “water ecological civilization”. In order to become more efficient, Dalian city cancelled multiple government administration approval processes. Gaoxin District became the first “non-administration charging zone” in the province.
Accordingly, Dalian became the pilot for reform and opening-up and is continuously expanding the correspondingvision.
EurAsiaInfo: Dalian has connected with the world and kept up with world economic trends through the Davos Forum. While introducing the new technologies, does Dalian encourage all walks of life to connect with the world?
Lu Lin: This is correct; actually the second point that I want to mention. The other important change brought to Dalian by Davos is opening a path to the world. In 2015, the promotion film on New York Times Square known as “Crossroads of the World” attracted the world’s attention on Dalian.
As a platform, Summer Davos presented the new outlook of Dalian city to the world and expanded the international influence of Dalian. In the first summer Davos in 2007, President Zatlers of Latvia said that “the conference in Dalian was an unforgettable experience since the beauty and prosperity of Dalian had deeply impressed me”.
In 2013 summer Davos, a journalist website in France made a comprehensive report on summer Davos, published many city landscape pictures and introduced the geographical locations and history of Dalian. It is undoubted that summer Davos is a platform where Dalian can present itself to the world and open a new window for the world to get access to Dalian. At the same time, from the perspective of economic development, Dalian keeps up with global economic trends through the meeting and can follow them in terms of technological innovation and progress. As a port and open city, Dalian has developed in line with the world’s development.
EurAsiaInfo: Keeping up with the world and connecting he world to Dalian – what are the effects of this process?
Lu Lin: It is an in-depth integration. This is the third change I want to talk about, namely the permanent impact of Davos on Dalian. Summer Davos is a bridge that connects Dalian with the world economy and its leading companies. In addition to the enhancement of international cooperation, it also promotes the opening-up of Dalian. Up to now, there are 113 World Top 500 enterprises in Dalian, running 262 projects. Summer Davos not only introduces the world to China but also enables Dalian get access to the world.
In the first summer Davos session, Dalian companies started to appear on the international stage. In the second summer Davos session, 17 domestic Dalian companies presented themselves to the global elites. To summarize: Davos promotes the change of the city and its habitants. Davos provides the chance to improve the city environment as well as to change the way of thinking.
EurAsiaInfo: While promoting the globalization development, Dalian manifests the unique charm of a Chinese city. The Summer Davos World Economic Forum will be held in Dalian again this year. Could you introduce the prospects for Dalian and the Davos Forum?
Lu Lin: In the future, Dalian city will try to further enhance the cooperation and exchange with Davos and improve the quality of Davos Forum. We will also use summer Davos Forum to seize the chance, speed up the integration into world economy as well as the alignment with global trends, promote economic and industrial structural adjustments and accelerate the prosperity, beauty and structures of a modern and global city.
Dalian and Switzerland Have Giant Cooperation Potential
EurAsiaInfo: Dalian has a beautiful environment and pleasant climate. Does Dalian have strong geographical and environmental advantages?
Lu Lin: Yes. Located on the Eastern shore of the EurAsian continent, and the southeast end of Liaodong Peninsula, Dalian is in the central area of the Bohai region, with the Yellow Sea in the East and Bohai Sea in the West. It is also close to Japan, Korea, North Korea and Russia. With overall 13 thousand square kilometers, Dalian has a population of 6.9 million and comprehensive city functions. As a world-famous tourism destination, Dalian is successively awarded as “World Top 500 Green City” by UN and “Habitat Environment Award” and “Optimal Tourism City” in China.
Dalian is an important international hub and logistics center in Northern China. Dalian International Airport is hosting 148 domestic and 48 international airlines, connecting Dalian with over 30 cities in 13 countries and regions. It is also the hub for connections with Japan, Korea and Russia, with an annual passenger traffic volume of 13.55 million. At present, Dalian has basically formed a nationwide airline network covering Japan, Korea, Russia, Europe and America. In the high season, Dalian has more than 2200 flights everyweek.
Dalian Port is connected through 94 ship routes with over 300 ports in 160 countries and regions.
EurAsiaInfo: Given the strong geographical and environmental advantage, does Dalian also have distinctive industrial advantages?
Lu Lin: Sure. Dalian is the international city with most vitality and business chances in Northern China. At present, investors from more than 80 countries and regions have built up 18’000 companies in Dalian with an accumulated foreign capital of over 100 billion dollars. There are over 700 financial and fund-raising institutions in Dalian which have formed a business relationship with around 4000 banks worldwide.
Correspondingly, the business scope covers approximately 150 countries and regions. In the “global financial centre indicator” system, Dalian is in 51th rank among global 82 cities, thus becoming the fourth listed city in China,following Shanghai, Shenzhen and Beijing.
EurAsiaInfo: We know that Dalian is a famous industrial city in China with developed equipment manufacturing, lithification, ship-building and electronic information industries. Could you give us a general introduction?
Lu Lin: You have a relatively comprehensive understanding. The equipment manufacturing industry in Dalian has developed over more than 100 years, including Dalian Machine Tool Group, Bingshan Group, Heavy Machinery-Hoisting Group, Baoyuan Nuclear Equipment Plant, Rolling Stock Plant, Ship-building Plant, Wazhou Group and many other famous equipment manufacturing companies.
Up to now, Dalian takes the lead in flexible machining centres, refrigeration equipment, hoisting equipment, nuclear power, wind power equipment, internal-combustion and electronic locomotive, ship and supporting components, motor and components, and pillow products. Besides, Dalian is also the base of a petrochemical industry with top processing capacity in China.
Nowadays, it has established large-scale petrochemical manufacturing companies such as Dalian Petrochemical Company, Dalian West Pacific Ocean Petrochemical Company, Fujia Petrochemical Company and Yisheng Petrochemical Company, formed a relatively comprehensive oil refining -PX-PTA-PET petrochemical industry chain and produced over 300 billion tons of oil per year. As one of the four major ship-building bases in China, Dalian has primarily built up the integrated ship-building industrial system which combines ocean engineering, ship-building, repair, supporting technical research and development and test facility functions. The ship building capacity also reaches up to 12 billion tons. The ship-building industry in China is in the top five in the world.
Dalian aims to be on the forefront of industrial clusters for IT. Among others, Gaoxin District software and information technology service, and Jinpu New District electronic information industrial clusters become the new-type of pilots for national industrialization bases. Over 80 world-class electronic information leading companies including Intel, IBM, HP and DELL have set up subsidiaries in Dalian. Dalian is the national base for “service outsourcing” and the pilot for“software industry internationalization”.
EurAsiaInfo: What are the expectations for the cooperation between Dalian and Switzerland?
Lu Lin: In comparison with other European countries, the cooperation between Dalian and Switzerland is still in an early stage. This also implies that the cooperation between Dalian and Switzerland has a giant potential, which could be reflected from the following aspects.
Lu Lin: The first step is to enhance the cooperation in high-end manufacturing industry.
Switzerland has always been famous for the high-end machinery manufacturing and precision engineering industry. Dalian also has prominent advantages in machinery, locomotive, wind power equipment, ocean engineering and other manufacturing industries. At the same time, Dalian also experiences industry 4.0 and the corresponding structural optimization in the equipment manufacturing industry. We expect the two parties to enhance the cooperation based on complementary advantages.
The second step is to enhance the cooperation in high-tech industry.
Switzerland has strong power in aviation, electronics, medicine and chemical industry. Dalian also rapidly develops the high-tech industries including integrated circuit, energy industry, information service and new materials. We expect the two parties to conduct the cooperation in high-tech research and development industry.
The third step is to enhance the cooperation in financial services.
As one of the biggest offshore finance centers in the world, Switzerland has advanced business modes and management experience in banking and insurance. Dalian is devoted to the construction of a North-Eastern Financial Centre and the formation of an enhanced financial system. Moreover, its banking and insurance industry also possess wide development prospects and market demands. We expect the two parties to enhance the cooperation in financial product innovation, capital management and financial talent training.
The fourth step is to enhance the cooperation in tourism field.
Famous for rich tourism resources, Switzerland becomes the prior destination for Dalian and Chinese citizens. Furthermore, Switzerland also possesses advanced experience in hotel management. We expect to enhance the cooperation with Switzerland in terms of visitor exchanges andhotel management talent training.
New Breakthrough of Dalian Free Trade Zone
EurAsiaInfo: Dalian has been listed as the third Free-Trade Zone. How big is it?
Lu Lin: On April 10th, 2017, the Liaoning free trade zone has been inaugurated in Jinpu New District. The Liaoning free trade zone is 119.89 square kilometers and Dalian occupies 59.96 square kilometers of it, which is half of Liaoning free trade zone.
EurAsiaInfo: What are the characteristics of Dalian free trade zone?
Lu Lin: Dalian free trade zone has the following characteristics:
First of all, the location advantage is distinct. Dalian has opened up as one of the earliest cities in China.
As a financial, shipping and logistics centre of Northeast Asia, Dalian has a significant history of being used by foreign powers for its ports.
Secondly, Dalian has a comprehensive opened-up system and has a solid foundation for opening up.
In 2016, the total foreign trade value of Dalian reached 339.65 billion Yuan, among which the value of imports reached 178.68 billion Yuan, accounting for 62.3% of the whole Liaoning province; while the value of exports 161 billion Yuan, accounting for 56.7%. Dalian has undertaken more than 70% of Cargo shipping and more than 90% of container in northeast China. The cargo handling capacity ascends to the world top ten, and the container handling capability is ranked as the 13th worldwide.
EurAsiaInfo: With such a great development momentum, on which aspects does Dalian free trade zone plan a new breakthrough?
Lu Lin: Dalian Free Trade Zone will focus on financial innovation, trade facilitation, investment liberalization, government functions to achieve a new breakthrough. Focusing on the development of port and shipping logistics, financial commerce, advanced equipment manufacturing, high-tech, circular economy, shipping services and other industries, and speeding up the construction of Northeast Asia International Shipping Center and international logistics center, Dalian will form a strategic high ground for cooperation in Northeast Asia.
The special supervision area of the customs will focus on exploring the institutional innovation with the main content of trade facilitation, and carry out bonded processing, bonded logistics, bonded service and other business; non-customs special supervision area will explore the investment system reform, and promote the transformation of manufacturing, financial innovation and service industry to open up. Dalian will focus on financial innovation, trade facilitation, investment liberalization, government functions and other aspects for a new breakthrough.
EurAsiaInfo: We are now in the world-famous financial region – Bahnhofstrasse of Zurich. Can you introduce specifically the financial breakthrough of Dalian?
Lu Lin: Regarding the financial innovation, Dalian will focus on financial internationalization to achieve new breakthroughs. We will facilitate cross-border trade and put investment and financing as the core; we will bring new ideas for financial resources supply and will improve the allocation of financial resources and assure their accuracy and effectiveness.
We will implement 44 financial innovation initiatives in 6 aspects: supporting the various types of entities in this zone to carry out cross-border investment in CNY, allowing enterprises and financial institutions in this zone to borrow CNYfunds from abroad according to macroprudential regulation ; deepening foreign exchange management reform; supporting Dalian Commodity Exchange (DCE) to start the international business sector, expanding new trading varieties, and constructing the Asian futures exchange; supporting commercial banks in this zone to expand the relevant offshore business, supporting non-bank financial institutions to conduct business like cross-border funding, cross-border guarantee and cross-border asset transferring in accordance with provision.
In conclusion, we will spare no effort to achieve new breakthroughs in the aspects like cross-border use of CNY, foreign exchange management reform, futures exchange support, deepening the construction of regional financial center and so on.
EurAsiaInfo: Can you also describe the breakthrough in respect of investment liberalization?
Lu Lin: In the area of investment liberalization, Dalian will focus on international investment standards and achieve new breakthroughs in investment liberalization, further relaxing the access conditions and improving transparency and predictability.
EurAsiaInfo: There will also be new breakthroughs in the transformation of government functions, right?
Lu Lin: Yes, in terms of the transformation of government functions, we will focus on making new breakthroughs in management modernization. We will give priority to making new achievements and promoting new transformation in government service provision. We will try our best to create a fair, relaxed and orderly internationalized business environment. We will deepen the reform of “streamlining administration and delegating power to lower levels, offering impartial supervision to promote fair competition and increasing the efficiency of services”, truly clarify the boundary between government and market and realize the maximal common divisor of the business environment with a first-class government administration environment. We should completely withdraw what should be “withdrawn”, completely delegate powers that should be “delegated”, completely reduce what should be “reduced”, completely regulate what should be “regulated”, completely prohibit what should be “prohibited” and completely publicize what should be “publicized”. We should strengthen supervision before and after incidents, exert reversed pressure on the reform of administration systems and mechanisms and expand the scale of opening up internally and externally.
Outlook and Expectations
EurAsiaInfo: Deputy Mayor, what are your outlook and expectations on the innovation cooperation between Dalian and Switzerland and in particular the cooperation between “Made in China 2025” and Swiss “Industry 4.0”?
Lu Lin: This year is the first year of China’s “13th Five-year” Program and a critical year to implement Made in China 2025 Dalian Action Plan. We should insist on “being driven by innovation, integrating informationization with industrialization, emphasizing quality over quantity, achieving green development and optimizing the structure” and accelerate the building of an industrial system with strong innovation capacity, good quality benefits, a rational structural layout, sustainable development capacity and international competitiveness to speed up Dalian’s strategic transformation from a big industrial city to a strong one.
Switzerland enjoys a highly developed advanced manufacturing industry with strong innovation capacity. Cooperation between Dalian and Switzerland can integrate “Made in China 2025” and Swiss “Industry 4.0” with a vast space for development.
Firstly, strengthening cooperation in intelligent manufacturing.
We should strengthen the cooperation with Switzerland particularly in major industries such as integrated circuit and robotics, focus on the development of smart products and equipment and gradually build digital workshops and smart factories.
Secondly, promoting close bilateral coordination and focus on breaking the development bottleneck in the major industries.
We should work together to tackle key obstacles in critical manufacturing techniques to guide enterprises to improve the manufacturing system and conduct technical innovations.
Thirdly, strengthening thecooperation in green industries.
We should support and guide enterprises and scientific research institutes in Dalian to cooperate with Switzerland in increasing the energy efficiency of traditional manufacturing industries and developing clean production technology to speed up the elimination of outdated production capacity and drive the development of traditional manufacturing industries in Dalian. We should achieve modernized, scale-based and industrialized development in the remanufacturing of engines, machine tools and bearings.
Fourthly, promote cooperation and innovation in high-end equipment.
We should keep a close eyeon high-end manufacturing fields and emerging industries in Switzerland and conduct cooperation and innovation in such fields as large crankshafts for ships and electric traction locomotives, develop some major products and equipment with strong driving force and core competitiveness, break through some key technologies and improve the independent innovation capacity and the level of system integration for Dalian enterprises.
EurAsiaInfo: On April 24, the Dalian Economic and Trade Project Promotion Meeting was successfully held in Geneva and many overseas Chinese from Dalian in Switzerland participated in the meeting. Many of them expressed their willingness to contribute to the development of their hometown.
To expand the market share of Dalian in Europe, how do you think overseas Chinese can support the development?
Lu Lin: First of all, I hope overseas Chinese can care about and support the development of Dalian.
The development of Dalian’s economy and society is depending on the support from overseas Chinese. Currently, Dalian has entered the golden period of development with multiple overlapping favorable policies. All major policy measures in the new round of Northeast Rejuvenation Strategy are related to Dalian; Dalian Area of Liaoning Free Trade Zone have been formally established; meanwhile, we have also set up National Jinpu New District, started to conduct comprehensive pilot experiments on constructing the new system of open economy, and accelerated the building of New National Demonstration Zone for Independent Innovation and Dalian Comprehensive Experimental Zone for Cross-border E-commerce.
In particular, Dalian Free Trade Area will carry out reformsand innovation on financial internationalization, trade facilitation, investment liberalization and management modernization, prioritize the development of such industries as port and shipping logistics, financial business and trade, advanced equipment manufacturing, high and new technology, circular economy and shipping services, promote the building of International Shipping Center in Northeast Asia and International Logistics Center and form a strategic highland to open up and cooperate with Northeast Asia. Looking into the future, I think Dalian enjoys a broad prospect and infinite vitality in development.
In 2016, despite the pressure of global economic downturn, the GDP of Dalian City reached USD 815 billion, registering a year-on-year increase of 6.5%; the actual use of foreign capital reached USD three billion, up by 11% year on year, putting Dalian in a leading position in big cities of Northeast China. In this regard, I hope that overseas Chinese can pay attention.
Secondly, I hope that overseas Chinese can come to Dalian for investment and industry revitalization.
Since reform and opening up, overseas Chinese and compatriots from Hong Kong and Macao have come to Dalian for investment and industry revitalization, bringing with them capital, technology, talent and advanced management experience and providing a strong impetus to the economic and social development of Dalian.
So far, overseas Chinese investment is still the major component of foreign investment in Dalian and enterprises established by overseas Chinese and compatriots from Hong Kong and Macao account for around 50% of foreign-invested enterprises in Dalian.
We welcome overseas Chinese in Switzerland and Europe to come to Dalian for investment and industry revitalization. We should jointly promote the building of “International Shipping Center in Northeast Asia, Logistics Center, Financial Center, International Trade Center and Modern Industry Cluster” and try to realize the goal of building “a pilot zone for industry structure optimization and a leading zone for economic and social development” so that Dalian can better play a leading role in the new round of rejuvenation for Liaoning Old Industry Base. Dalian municipal government will definitely try its best to provide good services.
EurAsiaInfo: I so appreciate you taking the time to speak with us today.
On behalf of overseas Chinese in Switzerland and all my colleagues at Eurasia Group, I would like to welcome and congratulate Dalian City Delegation on its successful visit in Switzerland! We also believe that Dalian City will continue to display vigor and brilliance in the world! Thank you!■
By EurAsiaInfo Keren Wang and David