China rust belt opens door wider to foreign investors

The EU business chamber has observed an uptick in foreign entrepreneurs arriving in Shenyang in recent years. Above, workers manipulate a machine to produce car interior pieces for a major European carmaker. (AFP)
Updated 24 September 2017
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China rust belt opens door wider to foreign investors

SHENYANG, China: Trucks carrying hi-tech car components rumble in and out the gates of an American industrial zone in the heart of China’s rust belt — using roads that the city especially renovated for the complex.
While foreign firms complain about being locked out of large swathes of China’s vast market, the door has cracked open a bit wider in northeastern Liaoning province as the authorities seek to revive the recession-hit industrial region.
The bustling activity at the Shenyang American Industrial Park, which hosts international suppliers for global car brands, stands in contrast with the darkened windows and empty parking lots of the moribund Chinese factories nearby.
Foreign firms feel more welcome in the provincial capital, Shenyang, and in parts of the southwest, than anywhere else in the country, according to a survey by the European Union Chamber of Commerce in China.
“The local government offers many benefits, such as easing company registration, providing discounts for factory and office space and giving family members three-year visas,” said Harald Kumpfert, chairman of the EU chamber’s Shenyang chapter.
Elsewhere, companies are increasingly voicing frustration about investment barriers in sectors from automotive to finance, while China subsidizes its own domestic businesses.
The EU business chamber issued an annual report on Tuesday saying companies were “suffering from accumulated ‘promise fatigue’” as the government has yet to follow through on pledges to open the market.
And while Liaoning is more welcoming, Kumpfert said that after setting up shop, businesses in Shenyang face similar obstacles, including lengthy waits for permits and “unclear” regulations.
Settling in China can also come at a price: at least one-fifth of EU companies said they have had to share their technology in exchange for market access in the aerospace, machinery, environment, auto, utilities and primary energy industries.
Still, the chamber has observed an uptick in foreign entrepreneurs arriving in Shenyang in recent years.
Businesses that specialize in renewable energy, tourism, agriculture or advanced technology are well positioned to succeed in Shenyang as the city addresses pollution and undergoes a “painful restructuring process”, Kumpfert said.
The Liaoning Pilot Free Trade Zone was launched earlier this year, and construction continues in the 48-square-kilometer Sino-German Intelligent Equipment Manufacturing Park in Shenyang, which hosts BMW, Siemens and BASF.
The city’s Bureau of Foreign Trade and Economic Cooperation said data on foreign investment was not immediately available.
China’s northeast has long relied on state-owned enterprises plagued with severe overcapacity in heavy industries that have crippled the economy, costing thousands of jobs.
Liaoning was the only province in the country that was officially in recession in 2016, with its economy contracting by 2.5 percent. The province also admitted to faking economic growth figures from 2011 to 2014.
“All these government projects have ignored principles of supply and demand and created all these problems,” said Jason Lee, a director of business development for Eastern America, which bought the land from the city to build the Shenyang American Industrial Park.
“Nowadays, there is more government support for foreign businesses here. There’s a lot to catch up on, but now they want to work with us as a team,” Lee told AFP, adding that city officials sometimes accompany him to meetings to woo foreign clients.
A Shenyang car insulation factory manager, Li, is pinning his hopes on foreign capital to help the region.
“If more people come and invest, then the whole environment will improve. Employment, revenue, and other aspects will all get better,” said Li, who declined to give his first name because he was not authorized to speak with the media.
But at the Shenyang German Sino-Service Center, most of the offices in a new building were recently empty, showing that the process can still be slow.
Wolfgang Wagner, chief operating officer of the center, says it was not out of lack of interest — two dozen foreign companies have applied to join but they have struggled to get legal permits to allow them to rent in a government-owned building.
“First we thought they could move in 2018,” he said. “Now it’s not going to be until 2019.”


Former Nissan chairman Ghosn appears in Tokyo court

Updated 23 May 2019
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Former Nissan chairman Ghosn appears in Tokyo court

  • It is the first of a series of hearings to iron out logistics for Carlos Ghosn’s actual trial
  • Nissan’s former chairman has hired a strong legal team as he fights to clear his name

TOKYO: Nissan’s former chairman, Carlos Ghosn, appeared in a Japanese courtroom Thursday for a hearing ahead of his trial on accusations of financial misconduct.
It was the first of a series of hearings to iron out logistics for Ghosn’s actual trial. The trial date has not been set, and experts say it could be months away.
Ghosn, who led the Japanese automaker for two decades, was arrested in November and charged with underreporting his income and breach of trust. He was released on bail in March, rearrested in April on fresh accusations and then released again on bail on April 25.
Ghosn insists he is innocent and says he was targeted in a “conspiracy” by others at Nissan Motor Co.
Nissan, which is allied with Renault of France, has seen profits nose-dive amid the fallout from Ghosn’s arrest.
Ghosn has hired a strong legal team as he fights to clear his name. One of his top lawyers, Junichiro Hironaka, was seen walking into the courtroom Thursday with Ghosn.
One of the conditions of Ghosn’s release on bail is that he is forbidden to contact his wife. Prosecutors say that’s to prevent evidence tampering.
Ghosn’s lawyers challenged that restriction, saying it is a violation of human rights, but the Supreme Court rejected their appeal Tuesday.
The lawyers can appeal again to have the restriction removed.
In a briefing Thursday, Deputy Chief Prosecutor Shin Kukimoto welcomed the Supreme Court’s decision.
“For married people to be together is important, but I feel there was enough reason for the Supreme Court to support us in this restriction,” he said.
Kukimoto declined comment on the hearing, which was closed to reporters and the public.
Kukimoto also said the maximum penalty upon conviction of all 15 counts of the charges Ghosn is facing is 15 years in prison and a fine of ¥150 million ($1.4 million).