Shandong’s Contributions To the Green Silk Road

Coastal province promotes

eco-friendly development

On June 10， the World Expo 2017 kicked off in Astana， the capital of Kazakhstan. Scheduled to end on Sept. 17， the event focuses on the theme of “Future Energy”， putting China’s innovative development solutions and its Green Silk Road in the spotlight.

For anyone who wants to learn about China’s proposals and practices in energy transformation， new energy utilization， environmental protection and sustainable development， as well as its achievements made in building the Green Silk Road， a visit to the Shandong Week event held at the Expo 2017 China Pavilion in early September will be a good choice. Experts regard Shandong Province as both an important energy resources base and a major contributor to energy consumption of China， which has long been the epitome of China’s energy structure.

Cooperation on Green Development

In recent years， Shandong has not only explored new ways of promoting sustainable development， but also made special contributions to the construction of the Green Silk Road. In pursuit of these achievements， it has formulated policies to engage major energy enterprises in the province in innovation-based development and played an active role in the implementation of the Belt and Road Initiative by taking advantage of its geographic location. All of its efforts will be highlighted during Shandong Week at Expo 2017.

According to the Shandong Development and Reform Commission and the Shandong Economic and Information Technology Committee， the province saw a rapid growth of its renewable energy industry and an obvious reduction in energy consumption in 2016. Its total power generation from renewable energy reached 23.67 billion kilowatt-hours， an increase of 33.7 percent over the previous year. Among them wind power generation increased by 38.5 percent to 14.25 billion kilowatt-hours； biomass power generation was 5.03 billion kilowatt-hours， a rise of 10.9 percent； and solar power generation reached 3 billion kilowatt-hours， an increase of 42.3 percent. Shandong’s energy consumption per 10，000 yuan （US$1，488） of GDP decreased by 5.16 percent over the previous year and energy consumption per 10，000 yuan （US$1，488） added value of industries above a designated scale by 5.24 percent.

In 2016， trade volume between Shandong and countries along the Belt and Road increased by 8.4 percent to 413.36 billion yuan （US$61.54 billion）， accounting for 26.7 percent of the province's total imports and exports. Eight economic zones and industrial parks were built in the same year. Shandong also made breakthroughs in international cooperation on production capacity. In 2016， the province made investments of 29.42 billion yuan （US$4.38 billion） in countries along the route， accounting for 16.7 percent of its overall foreign investment. The turnover of its foreign contracted projects reached 42.59 billion yuan （US$6.43 billion）， an increase of 45 percent.

In order to achieve better development， Shandong will continue to work with countries around the world， especially those participating in the Belt and Road Initiative， to carry out cooperation in the field of green energy. With a positive and open attitude， the province is willing to share its achievements in energy solutions and the building of the Green Silk Road with other countries， jointly promoting the development of renewable energy. Shandong Week， a highlighted event to be held at the Expo 2017 China Pavilion from Sept. 6-8， will give a full representation of the China Pavilion’s theme of “Future Energy， Green Silk Road”， share the province’s experiences in green development with Kazakhstan and other countries， and facilitate the linking of different strategies to foster the construction of the Green Silk Road.

During Shandong Week， a series of promotions themed on Belt and Road cooperation will be carried out by enterprises based in the province. Brands like “Hoping Shandong” （an online marketing service platform） and “Friendly Shandong” （a tourism website） are expected to gain popularity in Central Asian countries via the Expo 2017 in Kazakhstan and serve as a platform for Shandong enterprises to “go global”.

Enhanced Enterprise Involvement

So， what is Shandong’s experience in developing green energy？ How did the province make contributions to the construction of the Green Silk Road？

To put the Guiding Opinions of the State Council on Promoting the International Cooperation on Production Capacity and Equipment Manufacturing into practice， Shandong signed an agreement with China’s National Development and Reform Commission to establish a coordination mechanism， aiming at advancing 23 projects of production capacity cooperation between key Shandong-based enterprises， including Ruyi Technology Group， Nanshan Group， Weiqiao Pioneering Group and Wanhua Chemical Group， as well as their partners in countries like Pakistan， Indonesia and Hungary. Since then Shandong has made active efforts to set up a dynamic project database and formulate incentive policies to encourage enterprises in the province to launch cooperation projects in production capacity and equipment manufacturing， specifically in the iron and steel industry， nonferrous metals， engineering machinery， tires， the refining industry， building materials， textiles， the paper industry， automobile manufacturing and shipbuilding. These efforts have been transformed into innovation-based development of traditional energy enterprises and leapfrog development of companies engaged in new energy.

Established in 1999， the Yantai Jereh Oilfield Services Group Company is a listed company specialized in oil and gas equipment manufacturing （including drilling and workover rigs， intervention and stimulation equipment， well completion equipment， gas transportation facilities， gas treatment and processing equipment and LNG/CNG fueling equipment） and oilfield technology services as well as oil and gas EPC services. Today， seven Jereh research and development centers around the globe staffed with more than 1，200 senior engineers are working closely with customers in more than 60 countries， providing them with reliable oil and gas products and services. With an annual output of over 600 units of oilfield equipment in four main categories， namely cementing units， fracturing spreads， liquid nitrogen and coiled tubing units， Jereh is now the world’s largest oilfield stimulation and well completion equipment manufacturer.

Kerui Petroleum is another renowned traditional oil and gas enterprise based in Shandong. In recent years， the company has made great efforts to carry out technological innovation， improve oil production efficiency and promote cleaner production. Its operation has expanded to 45 countries along the Belt and Road. Starting from Kazakhstan and extending westwards， Kerui Petroleum set up branches in Turkmenistan， Turkey and European countries successively. While actively responding to the Belt and Road Initiative， the company has received financial support from institutions like the Asian Infrastructure Investment Bank， the China-LAC Cooperation Fund， the China-Africa Development Fund and the Silk Road Fund.

Qingdao Beihai Petroleum Equipment Technology has also played an active role in promoting the environmentally-friendly production mode. According to the company’s deputy general manager Chen Yonggang， an eco-industrial park built by their company in Kazakhstan has been put in to trail operation. Located in Kyzylorda Region， this US$35-million project is primarily engaged in associated gas utilization and recycling. Kazakhstan is rich in oil and gas resources but lacks advanced equipment and technology. Through cooperation with Kazakhstan on the construction of industrial sites， Beihai Petroleum was able to expand its overseas oil and gas market and launch a model project in targeted countries.

“Our associated gas processing involves desulfurization， compression， cooling， light hydrocarbon recovery and gas liquefaction，” Chen explained. “Based on their research and comparison， the local government concluded that our equipment and technology are much better and our prices are reasonable. Thus we succeeded in building a production base in Kazakhstan. We plan to push into other Central Asian countries like Turkmenistan and expand northwards to Russia.”

Unlike the three companies mentioned above， the Linuo Group is a leading player in the new energy industry. Established in 1994 and having set up plants in the United States， Europe， the Middle East， Thailand， Australia and India， it is a globally-renowned solar energy enterprise. In the field of solar thermal utilization， the group offers products covering the entire industrial chain， including vacuum tubes， glass tubes， complete solar thermal energy and photovoltaic （PV） systems as well as energy-saving and environmentally-friendly materials. While striving to be the world’s largest manufacturer in solar thermal utilization， Linuo Group has also made progress in solar power generation. Equipped with cutting-edge technologies， devices and talent， its solar PV cells have achieved world-class quality in certain key technical indicators.

Geographic Advantages

In addition to increasing enterprise involvement by responding to national policies， Shandong also tries to encourage major cities in the province to participate in the construction of the Green Silk Road in accordance with their advantages in geographic location.

Shandong’s beautiful seaside city of Qingdao is at the forefront in the process of implementing the Belt and Road Initiative， which has impelled Qingdao to transform its role from a coastal economic center in eastern China to an important pivot linking the sea and China’s inland regions. According to Belt and Road Initiative plans， the city was positioned as a main stop along the Eurasian Continental Bridge Economic Corridor as well as a strategic stronghold for maritime cooperation. In recent years， enterprises in Qingdao have been encouraged to expand their overseas operations. So far Qingdao has applied for 75 projects to be constructed in countries along the Belt and Road， with an investment of US$1.786 billion from the Chinese side. The value of newly-signed foreign project contracts between Qingdao-based companies and countries along the route reached US$2.758 billion with a turnover of US$2.113 billion， a year-on-year increase of 28.9 and 18.1 percent respectively.

Located at the estuary of the Yellow River， Dongying enjoys obvious advantages in geographic location. The city lies on the northeast coast of Shandong Province and borders the Bohai Sea to the east， the Beijing-Tianjin-Tangshan Economic Zone to the north and the Shandong Blue Economic Zone to the south. As a central city on the Yellow River Delta， Dongying is the only city in Shandong that has been involved in both the national strategies of building the Yellow River Delta High-efficiency Eco-economic Zone and building the Shandong Blue Economic Zone. The city is also positioned as a main stop of the Bohai Economic Rim and is included in the coordinated development of Beijing， Tianjin and Hebei. As an important petroleum production base， Dongying is home to the main producing area of the Shengli Oilfield， the second largest oilfield in China. The city contributes 85 percent of the oilfield output and 80 percent of its geological reserves. Dongying has made great efforts to develop four major industrial clusters， namely petrochemistry and saline chemistry， oil equipment， rubber tires and auto parts.

Similar to Dongying， Yantai has very convenient transportation with ports， railways， airports and highways extending in all directions. In 2016， the city achieved a GDP of 692.6 billion yuan （US$103.68 billion） and a main business revenue from industries above a designated scale of 1.63 trillion yuan （US$244 billion）， which ranked the city 19th and 8th in the country， respectively. Currently， Yantai is trading with 64 countries along the Belt and Road. The trade volume between the city and countries along the route reached 52.64 billion yuan （US$7.88 billion）， accounting for 18.1 percent of its total imports and exports. To implement the “going global” strategy， Yantai has put emphasis on building overseas economic and trade cooperation zones and formed a unique Yantai cluster on the international stage.

In the future， Shandong will continue to follow the principles of extensive consultation， joint contribution and shared benefits and play a leading role in implementing the Belt and Road Initiative. For the purpose of promoting policy communication， infrastructure connectivity， trade links， capital flows and understanding among peoples， the province will make greater efforts in enhancing policy coordination， constructing a logistics corridor， expanding overseas markets， innovating financing modes and facilitating international cultural exchanges.