Enterprises from South Korea are being encouraged to invest in Northeast China's Heilongjiang Province, making full use of the four economic zones being developed in the province.

The provincial government will establish four industrial bases across the province, namely Harbin-Daqing-Qiqihar industrial strip, a coal, electricity and chemical base in the east, Daxinganling ecotypes zoneand a border economic strip, said Wang Limin, vice governor of Heilongjiang Province.

"Investment in the four bases will total some 1.7 trillion yuan (US$215.19 billion) in the following five years," he said.

The move is aimed at strengthening the sectors of manufacturing, petrochemicals, energy, green food, pharmaceutical and processing of wood products.

Wang said the government would transfer the growth method of the province's economy and restructure its industries by improving the utility of energy and its innovation capabilities.

He added that the government, under the principles of efficiency, honesty, fairness and security, would create for investors from home and abroad an investment environment with the strongest policy support, lowest investment costs and the smallest interferences.

"We believe that our investment in the four industrial bases means massive business opportunities to foreign investors," Wang said. "We hope that entrepreneurs from South Korea will grasp the opportunity and participate in the economic development of our province."

South Korea is now the fourth largest trade partner and the fourth largest foreign investment source of Heilongjiang Province.

Experts from South Korea predict that the two sides will further their co-operation in energy and resources, as South Korea is poor in some natural resources, like minerals, which China has an abundance of. The fact that the two countries adjoin each other will facilitate such resource trade.

Since China established a diplomatic relationship with South Korea in 1992, two-way trade between the two countries has increased dramatically. Imports and exports between the two sides hit US$100 billion last year, and the figure exceeded US$26 billion in the first three months of this year.

China has become the largest trade partner and foreign investment destination of South Korea.

In terms of trade and investment flow between the two countries, Heilongjiang Province still sees a lot of potential in trade and investment with South Korea.

Experts say geographic, political and economic opportunities had not yet been fully taken advantage of as trade between Heilongjiang and South Korea was US$500 million last year, a tiny proportion of bilateral trade between the two countries.

In a bid to accelerate co-operation between Heilongjiang and South Korea, a "South Korea Commerce Day" was held in Harbin, the capital city of Heilongjiang Province in June.

With the theme of deepening exchanges and enlarging co-operation, the event attracted 120 business people from South Korea and 350 representatives from domestic enterprises.

During the one-day activity, enterprises from the two sides held project-matching dialogue in accordance with sectors and categories of their products, covering a vast range of industrial sectors, including machinery, petrochemicals and construction materials.

Some primary agreements for further co-operation were reached during the dialogue.

South Korean business people were interested in many sectors of Heilongjiang Province, such as agriculture, machinery parts manufacturing and electric and information technology.

South Korea mainly imports agricultural products and textiles from China and exports raw materials like electrical spare parts and steel to China.

This trade structure is expected to remain unchanged in the foreseeable future. And as China spends more on developing its high-tech industries, South Korea is likely to buy more high-tech products, such as machinery and household electrical equipment from China, and at the same time, China will import more semi-conductors and communication equipment from South Korea.

(China Daily 10/26/2006 page3)

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