The Shanxi Transformation and Comprehensive Reform Demonstration Zone is now the biggest integrated development zone in Shanxi province. [Photo by Yang Yu for China Daily]

Province's economic transformation over last decade highlights success of upgrading

After more than a decade's development, the Shanxi Transformation and Comprehensive Reform Demonstration Zone has transformed into a role model for local high-quality growth and a magnet for investment.

The zone was founded in November 2010 under the approval of the State Council, under the name of National Pilot Zone for the Transformation of Resource-Reliant Economy. It was renamed as the Shanxi Transformation and Comprehensive Reform Demonstration Zone in November 2016. The zone is located between the two central Shanxi cities of Taiyuan and Jinzhong.

Shanxi province, which used to be an economy highly reliant on coal mining and other heavy industries, began an economic transformation move more than a decade ago. The move highlights upgrading traditional industries toward the directions of more efficient and cleaner operations, and cultivating emerging industries as new growth engines.

The Shanxi Transformation and Comprehensive Reform Demonstration Zone was established to serve this campaign.

With a total planned area of more than 600 square kilometers, the demonstration zone is now the biggest integrated development zone in Shanxi.

Over the past decade, the zone has been the major test site for Shanxi's economic transformation.

It is designed to foster four large industrial clusters – a precision electronics, synthetic biology, photovoltaics and modern services – each with an annual output value of more than 100 billion yuan ($13.9 billion).It is also planned to cultivate other emerging industrial clusters each with an annual output value of 10 billion yuan, which include information technology, silicon carbide, sapphire substrate and other new materials. All the sectors are expected to form an advanced industrial system, according to local officials.

The Shanxi Transformation and Comprehensive Reform Demonstration Zone is also a test site of the province's institutional reforms, which aim to create a better business environment for enterprises.

Since the beginning of this year, the zone's authorities have renewed their efforts for business environment optimization, aiming to improve the confidence of investors and local entrepreneurs.

The latest policy move for the ease of doing business was an action plan announced by the zone's administrative committee on May 10 for further institutional reforms relating to improving administrative services.

By delegating power in business approval, streamlining licensing systems and providing whole-process assistance for enterprises' operations and policies for easier market access, the administrative committee pledged that the period from a project's agreement signing to construction will be shortened to at least 58 days from the previous average of 238 days.

The recent settlement of significantly large projects is an endorsement of the authorities' efforts among investors.

On May 26, Jinko Solar, a new energy developer, signed an agreement with the zone's administration for a solar energy development project with investment totaling 56 billion yuan.

Local officials said this will be one of the largest solar power development facilities in the world, with operations ranging from photovoltaic panels, batteries and chips to other components.

The project is now proceeding smoothly as authorities are providing services according to their promises. Jinko executives said that construction of the facility can begin in September as scheduled.

Liandong U Valley, an industrial park for smart manufacturing in the demonstration zone, is a new establishment which began construction in October 2021.

Prior to the operation of its first-phase project in late August, the park had already signed investment agreements with more than 30 businesses from Shanxi and beyond.

Also in May, a synthetic biological park with investment from renowned local life science company Jinbo Bio-Pharmaceutical became operational. This is the largest facility for the production of human-origin collagen in China. It is a product that can be used in different sectors ranging from surgery, gynecology and dermatology to skin care cosmetics.

Taishan Fiberglass is another company whose executives have said they are deeply impressed with the professional and considerate services offered by the zone's officials.

The company launched a smart fiberglass manufacturing facility with a designed annual output of 600,000 metric tons in the demonstration zone in August 2022.

"We had completed all procedures for land acquisition, environmental impact assessment and project design registration and approval within a month," said an executive of the company. "This efficiency is definitely beyond our expectations."

The administrative committee of the Shanxi Transformation and Comprehensive Demonstration Zone is providing businesses with whole-process assistance when they are launching operations there. For Taishan Fiberglass, officials were assigned to help them with all procedures relating to business registration and approval, with all the materials collected and all the forms filled in at the company's office, according to the executive.

Fan Zhaosen, deputy secretary-general of the Shanxi provincial government, is also the chief of the administrative committee of the demonstration zone. He said such a practice is "revolutionary" compared with the conventional ways of registration and approval.

"Our institutional reform is aimed at establishing an advantageous system for investment promotion and creating an optimized business environment," Fan said. "With such a system, along with our accumulated strength in industrial development, we believe we can build an ideal destination for investment and entrepreneurship."

Yang Yu contributed to this story.