East China’s Shandong Province Boosts Trade With Japan, South Korea

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Shandong Province, located on China’s east coast, continues to improve trade and investment ties with neighboring South Korea and Japan. Local authorities expect the densely populated province to play a vital role in the economic development of Northeast Asia.

Japan’s largest duty-free retailer, LAOX, recently built its first central warehouse in China, located in the Ji’nan area of ​​the Shandong Pilot Free Trade Zone. Processing approximately 30,000 orders per day, the warehouse covers 10,000 square meters and stores over $12 million worth of goods. Customers can place orders online and receive the goods within 48 hours.

Warehouse general manager Ma Qiang explained why they built it in Shandong.

“Shandong is close to Japan, and people here trust Japanese products. In addition, the pilot free trade zone provides us with a favorable business climate. It only took us 10 months to put the warehouse into operation. after signing the agreement. My Japanese colleagues couldn’t believe it was so effective.”

With the preferential policies applied in the pilot free trade zone, local officials hope the province will become a hub zone for economic development in Northeast Asia.

“Shandong’s cooperation with Japan and South Korea began when China’s economic reform and opening-up policy began in the late 1970s,” said Zhang Xingcheng, vice director-general of the Department of trade of Shandong province. “We have also seen changes in key areas of cooperation. Initially, the focus was on manufacturing, but now Shandong aims to cooperate comprehensively with Japan and South Korea, especially in cultural industry, healthcare and tourism.

In 2021, Shandong’s total trade with Japan was 182 billion yuan ($27 billion), up 16.5 percent from a year earlier. Japan has invested around $12.5 billion in nearly 1,400 companies in the province.

Meanwhile, Shandong’s trade with South Korea stood at nearly $40 billion in 2021, up 30 percent from a year earlier. South Korea has invested nearly $23 billion in about 4,500 companies in the province.

Ma is optimistic about the future of the pilot free trade zone and hosted 17 visiting Japanese companies.

“We mainly sell beauty makeup now, but we want to expand our product categories,” he said. “We want to attract more businesses and products from Japan, South Korea and Southeast Asian countries to Shandong, to create a better business environment for the free trade zone and for us. .”

The Regional Comprehensive Economic Partnership entered into force in China earlier this year. Zhang Xingcheng, vice director general of Shandong’s commerce department, said the province would seize the opportunity to further facilitate cooperation with South Korea and Japan.

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