Manufacturing province

CIMC raffles marine engineering construction center [Photo provided to chinadaily.com.cn]

Shandong, a major manufacturing province and a strong pillar in industry, has a sound industrial foundation. As such, a variety of industries are based in the province. Statistics shows that the total industrial added value of Shandong in 2017 is 2.87 trillion yuan, an increase of 6.6 percent year-on-year.; and the value of companies with an industrial output value above 20 million yuan saw6.9 percent increase, 0.3 percent above the nation’s average. Shandong’s annual revenue from its main business operations achieved 14.3 trillion yuan including 832.76 billion yuan of profit, accounting for 12.2 percent and 11.1 percent of the country respectively.

Shandong enjoys outstanding a comparative advantage in traditional industries, which still play an important role in China. In the chemical, building materials and medicine industries the revenues from main business operations all rank first in the country, the light, machinery and textile, and metallurgical industries all come third. The output of 110 key products in Shandong province ranks among the top three over the country, of which 46 are top ones. In addition, Qingdao, a coastal city of Shandong province, has been approved to develop as a pilot city in response to the Made in China 2025 initiative.

Emerging industries in Shandong are growing so rapidly that they are gradually becoming an important force in progressing economic development. For instance, the main business revenue of the information technology industry reached 1.46 trillion yuan, an average annual growth of 20 percent; the output of new energy vehicles doubled for two years in a row; the main business income of rail transit equipment ranks first in the country, marine equipment, high-grade equipment and other industries rank second; and the e-commerce sales in the industrial sector has achieved an average annual growth rate of 20 percent. Besides, under the promotion of the individualized customization model, a group of manufacturing enterprises have changed from just selling products to "products and services".

Shandong province stands at the forefront of the nation in intelligent manufacturing. It has cultivated the first batch of 60 provincial intelligent manufacturing pilot demonstration projects in 2017, and managed to take over 13 of the national intelligent manufacturing standardization and new model application projects, with 130 million yuan for funding. The number of its funded projects put it at the forefront of the country. By the end of 2017, 23 projects of Shandong had been listed into the national pilot demonstration sites of intelligent manufacturing, accounting for 11 percent of the country's total, again ranking first in the country.

Lots of companies in Shandong have huge potential for development. Shandong boasts 40,270 above-scale industrial enterprises in 2017, including 145 companies whose main business income has surpassed 10 billion yuan. A number of large enterprises operate, generating some famous and competitive brands like Haier, Hisense, Tide, Yanzhou Mining, Chenming, and Heavy Duty Truck Group. Among the first group of 60 demonstration enterprises awarded single champion in manufacturing industry, 13 are from Shandong Province, another area in which the province ranks No.1 in China.

Service industry

The service industry of Shandong province has been expanding and restructuring at a fast pace for many years. The added value of the service industry in 2017 reached 3.49 trillion yuan, ranking third in the country, contributing 56.4 percent of GDP and increasing GDP by 4.2 percent. Now the tertiary industry has become a major driving force for economic growth, leading the modern industrial structure to a further consolidated shape. Modern service industries such as finance, express service, software and information service, industry, culture, and sports and entertainment industry gather momentum each day. What’s more, the service industry  shoulders a larger and larger part in tax revenue, as it reined in 421.54 billion yuan of tax revenue in 2017, of which local tax revenue is 192.79 billion yuan, or 65.1 percent of the total revenue from local taxes.

More than 3000 e-commerce platforms are in operation, of which have emerged some influential ones, such as Haier, Red Collar, Jiuyang, Han du Cottage.

E-commerce in Shandong is maintaining a steady growth momentum. Online retail sales of physical goods and commodities saw year-on-year growth of 46.8 percent in 2017, and cross-border e-commerce imports and exports increased fourfold by 1.98 billion yuan, with exports of 1.23 billion yuan, up 2.1 times as much.

Market dynamics

The development of Shandong market remains fast and healthy while its economic vitality increasing every year. The total amount in market entities exceeded 8 million households in 2017, ranking third in the country, with 16.6 trillion yuan of real registered capital. There are 2.259 million real enterprises in Shandong, which ranks Shandong third nationally after Guangdong province and Jiangsu province. The private economy market continues to be very active. There are more than 2 million private enterprises, accounting for 92.8 percent of the total. The number of individual industrial and commercial households’ ranks second in the country, and that of professional cooperatives continues to remain the first. In terms of all the enterprises in Shandong province, private companies have absolutely become a vital force in business development.