In other articles, we have looked at how Shenyang and the province of Liaoning has suffered from the decline of such industries as steel and coal, where overcapacity has combined with slowing global demand. But there is another side to this: the city’s attempts to innovate without losing sight of its industrial roots.
Shenyang is designated one of China’s 10 most innovative cities and is a national pilot area for the integration of information technology and industry.
It is considered a national base for advanced equipment manufacturing. This will continue to be a key economic driver, not just locally but nationally. Everything from ethylene equipment to tunnel-boring machines is made here, to the highest international standards. “Enterprises in Shenyang have broken up foreign companies’ long-time monopoly on many technological fields in the domestic market,” says the Shenyang People’s Government, “and made great contributions to the localization of national key technical equipment manufacturing and the development of the national economy.”
Examples abound. Shenyang is a hub for machine tools in China; it is, among other things, the largest manufacturing base of comprehensive lathes in China. Ethylene equipment manufacturing, using propylene refrigeration compressors, is at an advanced level internationally. And, at the heavy-machinery end of the market, there is the QMJ4620 full-face coal-tunnel-boring machine, a mighty and frightening-looking armour-clad warrior of a piece of equipment. That machine, the government says, “signifies that Shenyang is capable of researching and manufacturing world-leading coal-mining equipment with fully self-possessed intellectual property rights, obtaining the approval of all counterparts in China’s coal industry.”
Shenyang has long been a hub for the automotive industry. This, too, has come under threat in difficult economic conditions, but here too there is innovation and success. The BMW plant in Shenyang is the subject of another article, but it is only one part of the burgeoning advanced equipment manufacturing capability for the automotive industry in the western part of Shenyang. Increasingly, the area is becoming a centre for the manufacture of clean-energy cars.
Shenyang also attracts hi-tech industrialization, tapping into both the strong scientific research base locally and the city’s role as a regional economic centre. Neusoft Group and Siasun Robot & Automation are examples of thriving hi-tech businesses set up in and around Shenyang.
Another vital element of Shenyang’s rebirth will be its combination of internet and industrial fields. The government talks about Shenyang becoming the first “internet plus” industrial base, with a major emphasis on developing cloud data and other new-generation measures in IT. The government encourages internet companies to set up in the city and offers tax concessions, initial free rent and support on company registration.
On Shenyang’s Sanhao Street, the city has its own Silicon Valley. Numerous computer, technology and internet businesses are based there. The government hopes the street will ensure that young entrepreneurial talent doesn’t leave Shenyang. In one building, the government has taken several floors, where entrepreneurs with good ideas can get access to a desk and even a bed. An incubator has developed here to help new tech businesses. One building, Tongfang Times Square, targets high-tech entrepreneurs and seeks to centralize all the various windows a young company needs – from tax to approvals – so that new businesses can get started seamlessly.
An example of Shenyang’s ambitions in this area came with the October 2015 news that Shenyang Municipal Government had tied up with Alibaba on a cooperative deal through which Alibaba will help to build big data and cloud development in Shenyang. The deal followed the foundation in July that year of the Shenyang Big Data Operation, a joint venture between Shenyang Venture Capital Management Group, the municipal government and East Network Technology. This company, says Chen Dawei, head of Shenyang Big Data Operation Bureau, “will help the government build a city-level database, promote innovation and help data resources for government industries and enterprise.”
Shenyang hosts the China International Equipment Manufacturing Exposition (CIEME), co-hosted with several key national state institutions including the Ministry of Commerce, National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Science and Technology and the Liaoning Provincial Government. “Through careful design, construction and refinement, the expo has formed a combined exhibition layout of CNC lathes, industrial automation, engineering machinery, energy equipment, and other kinds of equipment,” the city government says. CIEME has been called one of the 10-best brand expositions in China.
Shenyang’s classic older industries are still impressive too. Shenyang’s total GDP was equivalent to €106.9 billion in 2014, a 6% year-on-year increase. Machinery and equipment, automotive parts, aerospace, electronic information and product manufacturing industries are all considered competitive for the long term. Shenyang remains China’s most important heavy-industry base for the manufacturing of equipment.
The key to success for Shenyang will be building new avenues of growth, particularly in the digital sphere, while continuing to embrace the century-old expertise that has been built in heavy industry.