39 Shaanxi Companies Flourishing along the “Belt and Road”

2017-01-15 23:14:52 , Source : The Government Website of Shaanxi Province

In the ancient times, it was a remote road traded out by the soft pads of camels, exporting silk, china and other merchandises made in China; in these days, it is a remarkable road that mechanical and electrical products, mechanical equipment, furniture and food are freely traded alongside, with Shaanxi companies acting as positive forces n the trade, investment, technology and cultural rejuvenation of the “Belt and Road”.

China Railway Express (Xi’an – Warsaw) of Xi’an International Trade & Logistics starts operation.

Photo by Journalist Liu Qiang

Directory of Shaanxi Companies along the “Belt and Road”

“In June this year, we signed a joint venture contract worth 400 million Yuan with Hungary Public Property Management Co., Ltd. to invest in spa hotels, characteristic tourism, biomedicine, traditional Chinese medicine and other fields”, recalled Chen Gaozhi, President of Shaanxi Ekia Holding Group, “Shaanxi is in the heart of China, and Hungary is the geographic center of European map, so, the cooperation between us can be described as the exchanges between two ‘hearts’ ”.

As the “Belt and Road” Initiative progresses, state companies and private-owned companies like Ekia are connected to the world. From merchandises like silk and china in ancient times to modern goods like electronic products, mechanical equipment and furniture, the Silk Road is being revitalized in terms of trade, investment, technology and culture.

1. Shaanxi companies along the “Belt and Road”

In recent days, as Shaanxi cuisine is going global, food from all over the world is also exported to Shaanxi. On January 13, 2015, pure milk from Melbourne Port in Australia arrived in Xi’an; on March 26, 2016, the first international freight Chang’an arrived in Xi’an Port loaded with virgin oil from Kazakhstan; on March 28, 2016, the chartered plane for cross-border e-commerce also arrived in Xi’an from Amsterdam Airport of Netherland. So, it has become a reality to drink milk from Australia in the morning, eat oil-splashing noodles by the cooking oil from Kazakhstan in the noon, and receive goods bought online from Germany in the afternoon.

“Indeed, the Belt and Road Initiative has brought entrepreneurs from two countries together,” said Jia Heyi, President of Xi’an Aiju Grain and Oil Industry Group, “While I was on a business trip in Almaty, I saw the chance for Aiju Group to seek a break through, that is, to import ingredients from Kazakhstan into Chinese market. Aiju Group has signed a cooperative agreement with Kazakhstan government to build an oil-plants base with an area of 1 – 5 million hectares along with an oil factory of 250 hectares.”

Aiju Group has founded a company named Teai in Kazakhstan, and the Agricultural Products Processing Zone invested by Aiju Group had started construction on May 31, 2016. Besides, Shaanxi Hengji Concrete Corporation has set up an affiliate in Tajikistan, Shaanxi Hongqi Industrial Explosive Group has founded a subsidiary in Kyrgyzstan, and Huashan International Company has started the building of an integrated and comprehensive phosphorus chemical project in Malaysia. All of that shows a more diversified new image of Shaanxi companies to the world.

It is reported that, by the end of September 2016, 39 Shaanxi subsidiary companies had been set by in countries along the Silk Road Economic Belt, such as Kyrgyzstan, Singapore, India, Indonesia, Tajikistan, Thailand, in fields like petrochemical industry, energy sector, minimal resources development, photovoltaic, real estate, building materials and others. The designing, equipment procurement and facility construction is going smoothly for Zhongda Oil Refining Industrial Park in Kyrgyzstan, Aiju Oil-plants Processing Industrial Park in Kazakhstan, and the Sino-Cambodia Economic Special District in Cambodia. The land-purchasing, financing, shareholding and research projects are also progressing forward for three key projects of the 2 million tons of aluminum oxide project of Shaanxi Youser Group in Indonesia, the oversea research center project of Shaanxi Blower Group in Czech, and oil exploration project of Yanchang Petroleum in Kyrgyzstan.

Pei Chengrong, Director of the Economic Research Institute of Shaanxi Academy of Social Sciences, said that Shaanxi has the industrial advantages in fields like resource exploration and development, energy and chemical industry, mechanical manufacturing and infrastructure construction, while faced with overcapacity, those industries are eager to go global; meanwhile, some countries along the Silk Road Economic Belt are in need for construction with insufficient development capabilities. But, in his view, for financial companies to blend in, issues like financial openness, investment policy and invest room must be taken into consideration.

2. Chang’an Train running through the Belt and Road

With 75% of the world’s population and 60% of the world’s GDP, Eurasian continent is east to the dynamic East Asia Economic Rim and west to the developed European Economic Rim, and the vast middle land is full of economic development potential. And countries along the economic belt are distinctive from but complementary with each other economically with broad cooperative space. “The CR express (Xi’an-Huasha) was officially launched on August 18 with 41 containers loaded with over 100 varieties of goods of mechanical equipment, furniture, clothes, lamp, water dispenser, ice maker, aluminum materials and electronic equipment. To open a new CR express while the Central Asia trains have been up and running for 3 years, it will greatly promote the trade between China and European and Asian countries,” said Zhuo Ruopeng, Vice General Manager of Xi’an International Trade and Logistics Group.

Trade starts off before other thins during economic cooperation while logistics plays the leading role for trade; such is the case for building the Silk Road Economic Belt. On March 26, 2016, 43 freights of Central Asia trains loaded with 2000 tons of virgin rape oil bought by Aiju Group returned to Xi’an, and it was the first return trip of Chang’an Express. On July 10, 2000 tons of fine flour from Kazakhstan procured by Aiju Group went home by the freight express again. In the future, Aiju Group will build production bases like wheat and oil processing factory, flour factory, diary processing zone, food processing zone and bean products processing zone, and more goods will take the return rides.

Time is money for doing business, and it is extremely important to bring back the goods with the minimum time, effort, and cost. “Without Chang’an express, Aiju Group would find another way to ship back the thousands of tons of oil, like taking train rides first, then traveling by sea, and at last taking the train again to get to Xi’an. However, the paperwork would not be easy to handle and it would take too long. Chang’an express has shortened 8-10 days out of the 45 days’ transportation, which has greatly reduced our cost for logistics,” said Li Zhao, Manager Assistant of Xi’an International Trade and Logistics Group, “During the operation, the international freight mixes train cars with containers to load the various goods, which are mainly from Shaanxi, Ningxia, Shandong, Jiangsu, Shanghai, Zhejiang and other provinces, among it, Shaanxi goods accounts for 30%, and that of other provinces accounts for 70%.”

Till November 15, the Central Asia trains (Xi’an-Almaty) had operated for 258 times, and it was 117 times for this year. The Express had transported 393,000 tons of goods with a total export value of $ 514 million. Four CR expresses have been launched with a total of 220 carts and they had transported 480,000 tons of goods. The international trains have brought goods made in Shaanxi and China to Central Asia and Europe, but also brought fine agricultural products and various products back to China. In March this year, since the starting of the first return operation of Central Asia trains, the trade passage has achieved mutual exchange of needed products.’

The freight express will make the best of Shaanxi’s geographic advantage and function as the new messenger of the economic and cultural exchange of the Road and Belt Initiative. “To unify the trains and to integrate resources, the freight expresses were named as Central Asia trains and CR express, which has improved the system operation and management,” explained Yuan Xioajun, General Manager of the Xi’an International Trade and Logistics Multimodal Transportation Company.

In ancient times, the Silk Road was traded out by the soft pads of camels; in those days, it is travelled by the speeding trains loaded with goods, which is truly extraordinary.

3. Shaanxi companies favored by various countries along the Belt and Road

In the afternoon of December 1, Qu Jinwei, General Manager of Xi’an International Trade and Logistics Group, along with her colleagues, returned to Xi’an after the business field trip to Germany, Czech and other countries. “During this trip, we felt the enthusiastic of European companies to work with Chinese counterparts. We have discovered various fine products and we are in the hope that we could bring them into China while exporting Chinese featured products to Europe. After the trip, we are more confident in expanding logistics channels and multilateral trade to benefit people of each country,” said Qu Jinwei, “Currently, The CR express (Xi’an-Hamburg) run by Xi’an International Trade and Logistic Group operates on a regular basis. On December 6, we launched another CR express (Xi’an-Moscow). In the future, we will make efforts to gradually complete the dimensional and international comprehensive transportation network of Xi’an on land and via air, so that we will pioneer a safe, effective and convenient passage for international import and export between China and Europe.”

As statistics of Shaanxi Provincial Department of Commerce shows, in the first three quarters, the total amount of import and export of Shaanxi Province was up to $ 2.627 billion, making up for 11.9% of the total value of import and export of Shaanxi Province. Among which, the amount of import and export with the five countries in Central Asia increased 19.03%, which is higher than the 16.6% average provincial increase. Among which, Aiju Group along brought along 1.26 time of trade increase with Kazakhstan by importing cooking oil and flour, and Central Asia Energy Group contributed to the 3.02 times of trade increase with Kyrgyzstan by importing goods for investment in the country. “It is great to see the growth of Shaanxi companies, but as more and more affiliates are setting up overseas, the issue of talents shortage is prominent in terms of language and technology,” said Pei Chengrong, “Besides, it also raises our attention that some countries require visa interview and only extend a short travel period, which is not enough for the project follow-up.”

On the Silk Road, the fast-running heavy trucks produced by Shaanxi Automobile Corporation are a common sight.

On the prairies of Kazakhstan, loaded with building materials, furniture and various industrial goods, the heavy trucks produced by Shaanxi Automobile Corporation are running all the way through. China has a sound highway network, but in countries along the Silk Road, especially in Central Asia countries, highway is not a common sight, but those countries are in imminent needs of transporting heavy goods and materials. That’s when the Shaanxi-produced heavy trucks come into play, for they are solid, well-powered and customized by the different features of different countries, thus they play an important role in the material transportation and exchanges along the Silk Road.

“In the infrastructure construction field, BOT investment method is more suitable, and Shaanxi companies have rich experiences in this field. But they also come across obstacles, such as political, legal, international investment risks and slow customs clearance,” said Zhai Ruopeng. To counter the problem, Pei Chengrong said that, the companies could work together while going global. For example, to build a develop zone, companies of resource exploration and development as well as energy chemicals may work together to lower financial risks, in this way, some projects that trade resources would be more secured.

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