Caofeidian: From tiny sandy island to booming industrial town

By Yuan Fang
0 Comment(s)Print E-mail, August 6, 2018
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Over a decade ago, Caofeidian, in south Tangshan city, Hebei province was only a belt-shaped sandy island about eight kilometers long and less than 600 meters wide lying in the Bohai Bay.

Now, it has become a 210 square-kilometer booming industrial town displaying new vigor and dynamism as north China's Beijing, Tianjin and Hebei coordinate their development under a national plan.

Transformation of Caofeidian began in 2005 with the reclaiming of land from sea to prepare the ground for the relocation of the then Beijing-based Shougang Group, one of China's largest steel companies.

Intended as a move to ease the capital's resources pressure and improve its urban planning ahead of the 2008 Beijing Olympic Games, the relocation has also made Shougang a pioneer in exploring coordinated development between the nation's capital and its neighbors.

Shougang's move proves successful.

Shougang Jingtang at Caofeidian [Photo courtesy of Shougang Jingtang]

Shougang Jingtang, the company established in Caofeidian after the relocation, achieved profitability around the middle of 2014, only five years after it started production; in 2015, the company managed to stay in the black when 80 or 90 percent of Chinese steel companies were suffering losses, according to Ren Quanxuan, who joined the group in 1992 and came to Caofeidian to work for Shougang Jingtang in 2011.

Ren attributed the achievement mainly to the company's shift to make high-end steel products from low-end ones, as well as its immediate access to a seaport for importing raw materials and transporting finished goods.

The favorable physical location helped Shougang Jingtang cut its transportation costs of iron ore by 200 yuan per ton, an amount that mattered much in the miserable year of 2015.

Ren also dismissed worries that people held when Shougang first arrived relating to potential environmental pollution to Caofeidian and its surrounding area.

"What we brought to Caofeidian from Beijing were people and corporate culture," said Ren. "And the equipment now being used in Shougang Jingtang were all bought after the relocation."

As he explained, the steelmaker managed to minimize the environmental impact of its operations by achieving zero discharge of waste water, waste residues and waste gas and sticking to a circular business mode.

Out of the 67-billion-yuan investment in the company's first-phase project, 7.6 billion yuan was earmarked for environmental protection.

While enhancing its own competitiveness, Shougang's relocation has prompted other Beijing-based enterprises to shift to Caofeidian in what is now described as relieving Beijing of functions nonessential to its role as the national capital.

Many of the suppliers of producer services for the steel industry, such as equipment maintenance, spare parts production, automation and information-based systems, set up their own Caofeidian bases after Shougang Jingtang was established.

While contributing to local tax revenues (1.24 billion yuan in 2017), Shougang Jingtang also benefited the place in other ways – it forms an industry chain with downstream enterprises that has boosted local construction, real estate, transportation, manufacturing and service industries.

Caofeidian's synergy with Beijing has grown strongly since the plan for coordinated development in the Beijing-Tianjin-Hebei region went into top gear in 2014.

The governments of Hebei and Beijing signed a framework agreement to set up a demonstration area for coordinated development in Caofeidian the same year. An administrative committee, now containing 14 officials from various relevant authorities of Beijing together with officials of Hebei, oversees construction.

Since then, Caofeidian, in line with Beijing's plans for industrial transfer and relocation of nonessential functions, has been building facilities for applying high-tech advances from Beijing's Zhongguancun -- also known as China's Silicon Valley; taking up modern industry manufacturing; providing information technology services outsourced from Beijing; providing vocational education for applied technologies; encouraging entrepreneurship and innovation; demonstrating modern agriculture; and attracting the presence of Beijing's institutes of higher education.

Besides, it has introduced quality educational and medical resources from Beijing to serve the people transferred from the capital.

Much headway has been made since the demonstrative area was set up. Caofeidian and Beijing have signed 278 projects with a total investment of 395 billion yuan, and a number of Beijing-based large enterprises such as China Minmetals, Sinopec and BBMG have launched local projects.

Now home to seven major industry parks for port logistics, steel and electricity, chemical, equipment manufacturing, bonded area, emerging industries and high technologies respectively, Caofeidian reported a GDP of 44.1 billion yuan in 2017, up 7.7 percent from the year before, and its fiscal revenues grew 9.3 percent year-on-year to 11.1 billion yuan.

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