From China Liaoning Business Guide

Overview and Geography

Fushun, the nearest neighbor city of Shenyang, is a petrochemical industry city. Fushun prefecture consists of four districts (Xinfu, Wanghua, Dongzhou, and Shuncheng), three counties (Fushun, Xinbin and Qingyuan) and two economic development zones (Fushun Economic Development Zone and Fushun Shengli Economic Development Zone). Fushun has a total population of 2.3 million, composed of 1.4 million living in urban areas and 880,000 in rural areas.

Fushun is a multi-ethnic city with 34 different ethnic groups accounting for 27.5 percent of population. Main ethnic minorities are the Manchu, Korean, Hui, Mongolian, and Xibe. Fushun is 40 kilometers from Shenyang Taoxian International Airport, 200 kilometers from the seaport of Yingkou, and 400 kilometers from the Port of Dalian, linked by expressway and railway. Fushun has international shopping malls, supermarkets, convenient stores, and the four-star Fushun Friendship Hotel for accommodation.

Fushun is warmer than Shenyang in summer with more rain, and colder in winter. Spring and autumn are short. Annual average temperature is 13.9°C, precipitation 827 mm. In a typical year, it will be snowing 24 days, and the depth of frost penetration is 1.2 - 1.4 m. The terrain of Fushun is elevated in the east and south, with an average altitude of 400 - 500 m, and with forest in the mountains. The western and northern regions have hills and plains. Average altitude there is 100 - 300 m. Fushun is surrounded by mountains on three sides and crossed by the Hunhe River.

Economic Development and Business Sectors

Regional GDP of Fushun was 66.2 billion RMB (about 9.5 billion USD) in 2008, 16 percent more than 2007. Fixed assets investment jumped 35 percent to 38 billion RMB (5.5 billion USD). Consumption increased 21.5 percent and reached a per-capita rate of 8,747 RMB (1,258 USD), at a disposable income per capita of 12,430 RMB (1,788 USD) and average salary of 28,098 RMB (4,042 USD). Main industrial products of Fushun are coal (535 million tons in 2008), steel (3.3 million tons), iron (3.3 million tons) and finished steel (2.7 million tons), primarily produced by 58 large and medium-sized enterprises. Employment concentrated in manufacturing (88,716 persons), mining industry (34,100), public administration (26,360), education (23,429), and health and social welfare (10,287).

Fushun 2009	Billion RMB	Billion USD	Growth Rate
Gross Domestic Product	72.4	10.0	14.0%
Investment in Fixed Assets	53.3	7.6	40.0%
Financial Revenue	4.0	0.7	19.0%
Total Retail Sales of Social Consumer Goods	33.8	4.8	18.1%

With an industrial history of over one hundred years, Fushun is a city of heavy industry. Petrochemical, coal and metallurgy industry are the most essential sectors, supplemented by machine building, electronics, light industry, textiles, and chemical industry. Fushun is one of China’s centers of the petrochemical industry with a history of more than 70 years.

Today, the city is a production base of high- and normal-quality fuel oil, paraffin and synthetic lubricants as well as hydrogenation catalysts and petrochemical catalysts.

Fushun Petrochemical Company is China’s biggest oil processing enterprise and has a capacity of processing 9.2 million tons of crude oil per year, soon to increase to 12 million tons. The output of refinery products will total 10 million tons and of chemical products 4.5 million tons.

By reform and construction, the city strives to reach the following top ranks: global No. 1 in output of paraffin, light wax, and ethylene produced with new technologies; Asia No. 1 in the output of alkyl benzene; China No. 1 in the output of polythene, styrene, aliphatic alcohol, and propylene oxide. Fushun has decided to give priority to the development of the petrochemical industry and the fine chemical industry. A representative project in this regard is China North Petrochemical City. The city has Fushun Economic Development Zone, Gaowan Economic Zone and several other development zones, all of them providing preferential investment policies.

The local government implements a strategy to develop two areas and two zones: West Shenyang-Fushun New Area, East High-tech Industrial Area, South Ring Industrial Zone, and Hunhe River Ecological View Compound Zone. The first three are mainly focused on industries in new materials, advanced equipment manufacturing, petrochemical industry, and oil shale processing. The Hunhe River Ecological View Compound Zone is a supporting area for services and recreation.

Petrochemical: the city has 45 petrochemical enterprises with assets of 24.3 billion RMB (3.4 billion USD) and 33,000 employees.

Metallurgy: the city has 31 metallurgical enterprises with assets of 5.8 billion RMB (0.8 billion USD) and 23,000 employees.

Coal: the city has 8 coal production enterprises with assets of 4.8 billion RMB (0.7 billion USD) and 230,000 employees.

Machinery and Electronics: the city has 35 machinery and electronic processing enterprises with assets of 710 million RMB (102 million USD) and 9,582 employees.

Building Materials: the city has 10 building materials production enterprises with assets of 470 million RMB (67 million USD) and 3,117 employees.

Light Industry and Textile Industry: the city has 70 enterprises with assets of 2.1 billion RMB (0.3 billion USD) and 12,000 employees.

Energy: the city has 15 enterprises with assets of 2.3 billion RMB (about 300 million USD) and 1.0 million employees. The major part of the city’s energy industry is the power industry, which consists of 4 enterprises, an installed capacity of 1.3 GW and annual generating capacity of 6,500 GWh. That is more than the annual energy consumption of Latvia or Luxembourg.

The rural economy has also developed in Fushun. Agriculture has been industrialized, regional distribution and professional management improved. A series of products has been defined as the focus of agricultural industrialization: edible mushrooms, wild herbs, Chinese forest frogs (Rana temporaria sinensis), traditional Chinese medicine, high-quality rice, wood products, livestock, poultry and fruit.

Foreign Investment and Foreign Trade

So far, foreign enterprises from 38 countries have invested in Fushun, mainly in light industry, chemical industry, real estate, electric power, machinery, metallurgy, medicine, textiles, utilities, building materials, and oil processing. Foreign direct investment was 128.7 million USD in 2008. A growing number of industrial enterprises is active on overseas markets with increasingly competitive products. Total 2008 import value of Fushun was 34.0 billion USD (+32%), export value 88.2 billion USD (+34%).

Focus of Investment Strategy

Petrochemical

1. Build China North Petrochemical City by focusing on Fushun Fine Chemical Industry Park to develop the petrochemical industry.
2. Petrochemical industry: focus on ethylene and other key projects and build a world-level industrial pattern featured by "oil, chemical, fiber, plastics, and lotion".
3. Fine chemical industry: Use local resource advantages to develop high-end multifunctional fine chemical products and develop the bio-chemical industry, the pharmaceutical industry and pharmaceutical intermediates.

Metallurgy

1. Adopt appropriate advanced technologies to transform traditional industries and enhance comprehensive strength.
2. Develop a large-scale, intensive and specialized metallurgical industry.
3. Rely on Fushun Special Steel Shares Co., Ltd., Fushun New Fugang Co., Ltd. and Fushun Aluminum Co., Ltd. to develop high-quality, specialized and special products.
4. Build the first-rate China north quality steel production base.
5. Build first-rate China north aluminum and aluminum alloy research and production base.

Coal

1. Boost the development of alternative industries and substitutive industries.
2. Utilize oil shale, coal-bed methane, and residual coal to develop deep processing industries.
3. Focus on comprehensive resource utilization to establish a new resource development system.

Machinery and electronics

1. Adopt advanced technologies by relying on the existing basis to upgrade product level and scale.
2. Focus on the production of engineering machinery, petroleum machinery, general-purpose machinery, electrical porcelain appliances, and TV sets. Adopt strategies featured by precision, high efficiency, automation, flexibility, and integration.
3. Mass-produce complete sets of integrated electromechanical equipment.

Building materials

1. Adopt new technologies to vigorously develop new products.
2. Raise production capacity to increase the proportion of high-grade special cements.
3. Utilize local resources to vigorously develop new building materials and light materials.

Light industry and textile industry

1. Utilize local resources to vigorously develop fine and deep processed products.
2. Prioritize eight categories of products, including plastics, wax products, chemical fiber, and household chemicals.

Energy

1. Expand production capacity by performing energy conservation, consumption reduction and improving technical equipment.
2. Build the two sets of 600,000 KW generators of Liaoning Power Plant, two sets of 300,000 KW generators of Fushun Power Plant, one set of 100,000 KW generator of Fushun Mining Group Co., Ltd., and one set of 570,000 KW generator of Fushun Economic Development Zone.