'Yesterday Once More': Cooperation of Central SOEs and Local Government Revitalizes Liaoning Ports

A liner docks at Dalian Port's container terminal in Liaoning. [Photo/sasac.gov.cn]

The launch of Liaoning Port Group, a result of cooperation between central state-owned enterprises (SOEs) and local governments, has been a key step in the revitalization of the province.

The Northeast China province of Liaoning, with its long coastline and rich port resources, is the only part of the country's northeastern area with access to the sea.

The rapid development of Liaoning's ports once played a crucial role in the social and economic development of the region and its economic opening-up.

However, years of redundant construction and excessive competition hindered the development of the ports.

To bring prosperity back to the region, Liaoning has joined hands with China Merchants Group (CMG) to re-allocate port resources to create a "yesterday once more" for the region.

It set a precedent in cooperation between central SOEs and local government based on market-oriented principles in China.

As a result of the cooperation, Liaoning Port Group was launched on Jan 4, 2019, and has made satisfactory achievements through resource allocation and integration, deepening reform, innovation and coordinated development.

At present, the company can handle more than 500 million tons of freight annually, and has opened foreign trade liner routes for commercial vehicles.

Yingkou Port in Liaoning handled more than 1 million twenty-foot equivalent units (TEUs) of cargo in 2020, becoming China's first domestic trade port to realize the combined transportation of such an amount of freight through a "sea-railway" model.

A view of the container terminal of Yingkou Port in Liaoning [Photo/sasac.gov.cn]

The company also launched China's first bonded business service for multi-regional and mixed ores.

Now, it has evolved into one of the country's most valuable port enterprises, with the largest cargo handling capacity. However, it still has a long way to go to completely get rid of its weaknesses, such as owning a large number of low quality subsidiaries with a heavy debt burden and overstaffed institutes.

Over the past two years, the company has re-organized 137 affiliated companies, reduced a deficit of about 1.51 billion yuan ($230.73 million), and promoted public beneficial asset transfers, which have alleviated the burden on the ports and boosted their sound development.

What's more, with the help of CMG's global business network and resources, Liaoning Port Group has built foreign shipping centers, opened new routes and enhanced its services to attract foreign trade supplies of goods.

At the same time, it has also improved quality and efficacy through re-organization, realizing a stable and growing performance in terms of cargo handling capacity.

Cooperation in grain, container and oil transport between Liaoning Port Group and CMG has also been a highlight.

The two sides have an eye on the shipping, real estate and finance industries. They aim to create a special port industry and develop shipping resources in order to contribute to building a world-leading port and international shipping center in Northeast Asia.

A view of Dandong Port in Liaoning [Photo/sasac.gov.cn]

Liaoning Port Group welcomed a new member - Dandong Port Group Co Ltd - in August 2020, signaling that the company's reform had reached a new level.

Later, in February 2021, it took another step along the road to high-quality development by debuting on the capital market.

"Evolving into a great enterprise in Northeast China" has been a long-term goal of the company since its establishment, and reform has been the "ace in the hole" of its development.

Over the next five years, according to the Liaoning Port Group, it plans to continue its reform, re-organization and re-construction in the fields of management systems, market development, cost control and operation efficiency, and strives to become a strong force driving the revitalization of the old industrial base in Northeast China - as well as a major strategic support of CMG's global business.

A view of the automobile terminal at Dalian Port in Liaoning Province [Photo/sasac.gov.cn]

(Executive editor: Wang Ruoting)