Foreign commerce and economic cooperation reach new highs over the past five years

Wind turbines generate clean electricity in Shanxi. CHINA DAILY

As an important part of the Belt and Road Initiative, the North China province of Shanxi is developing into a highland for the opening-up of China's inland regions.

During the 14th Five-Year Plan (2021-25), Shanxi has used its location, resources and industries, and strengthened connections with the country's coastal regions to push foreign trade and economic cooperation to a higher level, according to local officials.

They said Shanxi's foreign trade now features multiple entities, an optimized trade structure, upgraded export products, more platforms and channels for trade, and innovative business models.

Huayuan International Land Port, a leading logistics company in Shanxi, is an example of finding new growth areas by creating new business operations.

Hou Qingzhou, deputy general manager for Huayuan's e-commerce unit, said the company has tapped into shipbuilding in recent years. It secured an order from a German client in September 2024 to produce two electric-stacked general cargo ships with a dead-weight of 3,800 metric tons.

"We are among the pioneers in the inland province of Shanxi to successfully develop the shipbuilding business," Hou said. "We hope this new operation can help us secure overseas orders while meeting our own demand in foreign trade and logistics."

Diversification

Diversification is now the keyword of Shanxi's foreign trade sector, according to local officials.

As a traditional exporter of energy resources and related heavy machinery, Shanxi's portfolio of exports now covers products from diverse industries including agriculture, advanced manufacturing, high technology and local characteristic industries.

The agricultural sector is playing an increasingly important role in Shanxi's exports. Local farm products, such as dehydrated sweet potato, Datong daylily, apricot, soybean flour, quinoa flour and Shanxi-style yogurt, have been exported to a great number of countries and regions that include the United States, Japan, Russia, Canada, Malaysia, Vietnam, Italy and France.

The booming exports of agricultural products have injected vigor into rural vitalization. It is reported that, by the end of 2024, every county in Shanxi had developed foreign trade, marking a historic breakthrough.

Along with the rapid development of Shanxi's manufacturing industries, the province has seen a sustained improvement in its export structure and enrichment in the portfolio of exported products.

Over the past few years, electronics, machinery and high-tech products have taken the place of energy resources and mining-related equipment to become the province's main exports.

In 2024, the export of machinery and electronic products amounted to 96.4 billion yuan ($13.62 billion), accounting for 55.6 percent of Shanxi's total export volume, according to the Shanxi Provincial Department of Commerce.

The export of high-tech products reached 79.46 billion yuan in 2024, accounting for 45.6 percent of Shanxi's total export volume. The two figures represented increases of 9.6 percentage points and 5.2 percentage points compared with those in 2020.

Taiyuan Heavy Machinery Group, based in the provincial capital of Taiyuan, is a shining example of Shanxi's foreign trade upgrading and diversification.

A traditional manufacturer of mining and metallurgical equipment in past decades, Taiyuan Heavy Machinery Group has begun to diversify its operations in recent years. Its rail transit equipment, wind power equipment and farming machines have been sold to more than 70 countries and regions.

In 2024, for instance, the company exported 100 combine harvesters, worth a total of $5 million, to Tanzania.

A company manager said that these machines have greatly improved local farming efficiency. "Our dealers in Tanzania told us that farms using such machines have shortened their harvesting time from 10 days to three days," said the manager.

Shanxi now has eight national-level and 24 provincial-level bases for foreign trade upgrading, covering such sectors as equipment manufacturing, new materials, new energy and agricultural products.

The foreign trade upgrading base in Shanxi Transformation and Comprehensive Reform Demonstration Zone, for instance, reported a total foreign trade volume of $10.82 billion last year, becoming a vital force in Shanxi's international trade.

In addition to commodities, the service trade is an important part of Shanxi's foreign trade.

Contracting overseas construction projects and the export of labor services are among the pillars of Shanxi's trade in services.

Shanxi Construction Investment Group is a key player in these sectors. It has been engaged in the construction of such overseas projects as the Doboj Hospital in Bosnia and Herzegovina, and the new international airport in Siem Reap, Cambodia.

Better connectivity

The improvement in infrastructure for connectivity is a major driver for Shanxi's foreign trade growth, according to local officials.

On Sept 26, a freight train, loaded with Shanxi-made products, departed from Shanxi's Datong Railway Logistics Center for Moscow, Russia. This was the 1,000th train since the China-Europe (Asia) freight train service was launched in Shanxi.

The first China-Europe (Asia) train from Shanxi was launched in February 2017. The province opened its freight train service to Laos and other Southeast Asian countries in March 2021, adding another railway channel for international trade.

Over the last eight years, Shanxi's specialty products, such as mining equipment, train wheel sets, glassware and solar photovoltaic products, have been transported via 26 railway lines to 48 cities in 17 countries and regions involved in the BRI.

In addition to improving railway infrastructure, Shanxi province is building more platforms and offering better services for enterprises in foreign trade.

The province has one comprehensive bonded zone – Wusu Comprehensive Bonded Zone – and three bonded logistics centers in Linfen, Datong and Jincheng.

As the first comprehensive bonded zone in Shanxi, Wusu Comprehensive Bonded Zone, close to the Taiyuan Wusu International Airport, is a platform to aid foreign trade. It offers such services as bonded processing, bonded logistics, bonded warehousing and financial leasing.

Wusu Comprehensive Bonded Zone is an area where special customs supervision, taxation and foreign exchange policies are implemented to aid foreign trade. Enterprises in the zone enjoy lower taxes, easier imports and exports, and lower warehousing costs.

Wang Dong, an executive at the rail transit equipment unit of Taiyuan Heavy Machinery Group, said Wusu Comprehensive Bonded Zone has offered crucial help for his company's foreign trade business.

"In July last year, we were challenged by mounting stockpiles because of the short supply of shipping vessels for our export delivery," Wang said. "This problem was solved when the zone offered us its bonded warehousing service, which led to a substantial cut in costs."

Based on the operational experience of the bonded area and bonded logistics centers, Shanxi is applying for the establishment of a free trade zone, aiming to benefit more foreign trade enterprises.

Shanxi is also encouraging the use of cross-border e-commerce in foreign trade. It has established three cross-border e-commerce pilot zones in Taiyuan, Datong and Yuncheng. In 2024, the exports via cross-border e-commerce in the three zones increased 22 percent from 2023.

Crucial help

To create a better business environment for foreign trade enterprises, Shanxi's authorities have arranged a number of delegations to attend global trade events, help them register trademarks overseas and secure international certifications.

The authorities have also established close partnerships with financial institutions – including the Shanxi branches of the Export-Import Bank of China and China Development Bank, as well as local credit insurance companies – to address foreign trade companies' concerns in fundraising and insurance.

With respect to fundraising assistance for foreign trade, emphasis was given to small and medium-sized enterprises, especially private businesses.

The improved business environment has led to a boom in entrepreneurship in the foreign trade sector. Statistics show that Shanxi had 2,084 companies engaged in foreign trade in 2024, 485 more than the figure in 2020. There were 116 foreign trade companies with an annual import and export value surpassing 100 million yuan, an increase of 29 compared with 2020.

Shanxi's foreign trade businesses have been expanding to an increasing number of overseas markets. While consolidating their presence in traditional markets such as the European Union, the United States, Japan and South Korea, Shanxi's companies have tapped into emerging markets such as Southeast Asia, Africa and Latin America.

Countries involved in the BRI are now a highlight of the globalized operations of Shanxi's enterprises. Trade with these countries accounted for 50.2 percent of Shanxi's total foreign trade volume in 2024, compared with 23.1 percent in 2020.

Another emerging group of trade partners are Regional Comprehensive Economic Partnership members, which contributed 31.1 percent to Shanxi's imports and exports in 2024, compared with 26.1 percent in 2020.

While Shanxi's businesses expand into global markets, the province is also showing its appeal to international investors. Local statistics show that Shanxi had nearly 900 foreign-funded enterprises at the end of 2024, compared with 500 or so in 2020.

Ren Zhixia contributed to this story.

Two dock cranes built by Taiyuan Heavy Machinery Group leave a wharf in Tianjin for an overseas location. CHINA DAILY

The 1,000th China-Europe freight train from Shanxi leaves Datong Railway Logistics Center on Sept 26. CHINA DAILY

The Levy Mwanawasa Hospital in Zambia, built by Shanxi construction companies. CHINA DAILY

The Datong International Land Port is one of the three bonded logistics centers in Shanxi province. CHINA DAILY