The city of Panjin is riding the wave of favorable government policies to accelerate the growth of its shipping and logistics industries.

As one of the five key coastal investment destinations in northeast China's Liaoning province, the Panjin industrial base was established at the end of 2005.

With an initial phase of 34.6 sq km, it will cover 110 sq km when fully built and have a new a port, developments on an adjacent island, industrial sectors, land for service providers and residential communities.

While the tourism and service sectors play an important role in the local economy, shipbuilding, petrochemicals and port logistics are projected to be the pillar industries of the base.

Situated on the right bank of the Liaohe River estuary, the site has more than 40 km of river and coastline that provide ideal natural conditions for shipbuilding and port logistics.

Unlike the nearby shipbuilding giants Dalian and Huludao, Panjin makes small and medium-sized ships with a loading capacity of less than 5 tons, along with yachts, motorboats and ship parts in a bid to fill a void in the province's shipbuilding industry.

Neighboring Liaohe River Oilfield, the country's third-largest, has spawned a number of petrochemical companies. With such rich gas and oil resources, well-established manufacturing facilities and a well-trained labor force, the Panjin base has a unique advantage in developing its petrochemical industry.

Close to big steel plants in the nearby cities of Beijing, Anshan, Benxi, Dalian, Shenyang and Jinzhou, Panjin's shipbuilders are able to conveniently purchase steel along with local chemicals to reduce production costs.

Transportation

A two-hour drive from the airports in Shenyang, capital of the province, and Dalian, a developed coastal city in the province, the Panjin development zone is also just 50 km from the Beijing-Sheyang and Shenyang-Dalian expressways, as well as the Beijing-Shenyang high-speed railway

A coast road under construction to link the province's five key investment destinations will run through the industrial zone.

A bridge across the Liaohe River is expected bring Panjin and its neighboring city Yingkou closer.

Construction on a new port with a planned annual throughput of 100 million tons of goods will also begin soon.

The new port will be mainly used for transportation of petroleum and chemicals, as well as serve as a transshipment point for containers, steel, grain, coal and minerals.

The transportation network will consolidate the base's position as a traffic hub in the middle region of the province, facilitate trade and bolster development of local logistics.

Projects

The base has to date attracted 65 projects with a total investment value of 20 billion yuan.

Of the projects, seven are in shipbuilding, 25 make ship parts or support shipping facilities and seven are logistics companies.

Liaoning Hongguan Ship Industry Co Ltd has begun production at the site, with two 16,800-ton oil tanks the company made for PCL, a Singapore-based shipping company, now in use.

Nine other enterprises, including joint Chinese-New Zealand and Canadian companies, have completed construction of their manufacturing facilities and have begun production.

Forty other companies have made more than 100 million yuan in fixed-asset investment in Panjin with construction of new facilities underway.

A number of big projects are expected to further broaden the zone's industrial base.

A 5 billion yuan site built by China National Petroleum Corp will make Panjin the State-owned oil giant's machinery and equipment production base in northeast China.

Another large project is the 1.7 billion yuan land reclamation and port construction effort by Tianjin Dredging Co.

Industrial output at Panjin is projected to reach 30 billion yuan in 2010 and 150 billion yuan in 2020.