When you think of Shandong’s “magnificence,” what comes to mind first?

Scallions, jujubes, and cherries—none of them are small.

From a national perspective, Shandong is undeniably a major province in terms of both population and economic strength.

In recent years, the province has gone through the growing pains of the “transition from old to new growth drivers,” where the “pain” has outweighed the “pleasure.” Yet the results have been far from disappointing: there has been both quantitative growth and qualitative improvement.

Whether it’s a rebound from hitting bottom or a rising trend, a closer look at Shandong’s transformation reveals flexible approaches and pragmatic actions—consolidating local resources while seeking new breakthroughs.

Equally indispensable is the frequent “learning from the South” observed across the region. However, the North cannot simply “transform” into the South, nor can Shandong “relocate” to Jiangsu and Zhejiang—each has its own “character,” and each follows its own “path.”

In a nutshell, Shandong’s investment promotion is reliable, hardworking, low-key, and reserved.

Shandong Exclusive Project Resource Group – Add Group Admin

Top-level thinking has played an indispensable role

In the first three quarters of this year, Shandong truly has reason to be proud.

Looking at the data, Shandong’s primary, secondary, and tertiary industries show almost no weaknesses. Both the secondary and tertiary sectors recorded growth rates higher than those of Guangdong and Jiangsu.

Looking further back at the first-half economic data, the traditional top three rankings by GDP remained unchanged: Guangdong, Jiangsu, and Shandong. However, in terms of growth rate, Shandong significantly outpaced both Guangdong and Jiangsu.

Shandong has demonstrated the responsibility of a major economic province through its achievements.

Behind this success lies the fact that provincial and municipal leaders have not only set the right overall direction but also ensured effective implementation.

In particular, they have personally taken charge of and assumed overall responsibility for investment promotion. Many top leaders have transformed themselves into “city ambassadors,” “industry chain leaders,” and even “front-line service providers.”

This year, the biggest event in Shandong is the Provincial Party Congress.

The last Provincial Party Congress was held in June 2017.

Since 2017, four governors have emerged from this cohort of Shandong Provincial Party Committee members: Wang Wentao, Wang Qingxian, Wang Zhonglin, and Wang Hao.

Looking back, it was a constellation of stars.

In February 2018, the New Year’s address by the then-Secretary of the Shandong Provincial Party Committee sparked a nationwide response. In essence, it stated that Shandong’s development model remained stagnant, and its industrial structure was like an outdated ticket—unable to board the giant ship of development.

It was a case of either being chased by others or chasing after others. Over the past five years, Shandong has awakened...

Last September, Li Ganjie took office as Secretary of the Shandong Provincial Party Committee, stating that “to manage Shandong’s affairs well, we must dare to think and dare to act.” This approach has profoundly influenced Shandong.

Shandong Provincial Party Secretary Li Ganjie led a delegation to Beijing to personally host a promotional event for Shandong, highlighting “Hospitable Shandong, Quality Shandong.”

Seeing Secretary Li travel all the way to Beijing to place Shandong’s brands under the national spotlight and actively promote them was truly moving.

To be honest, for Shandong to “turn the page,” a thorough self-revolution is essential.

Facing an uncertain environment, Shandong will minimize the impact of the pandemic to the greatest extent possible and ensure the “three continuities”: production enterprises continue, construction sites continue, and the transportation of goods continues.

2022 marks the decisive year of the “Five-Year Breakthrough” initiative. As the nation’s only province with both a permanent resident population and a registered population exceeding 100 million—a province where the primary, secondary, and tertiary sectors are all robust—Shandong is back!

Raising the Banner, Demonstrating Drive

The transition from old to new growth drivers is a concept Shandong knows all too well.

In January 2018, the master plan for the construction of Shandong’s Comprehensive Pilot Zone for the Transformation of New and Old Growth Drivers was approved.

From that moment on, Shandong began to put its plan into action. The timeline set at the time was: full momentum within one year, initial results within three years, breakthroughs within five years, and the establishment of a competitive edge within ten years.

It is reported that since 2017, Shandong has shut down more than 110,000 small, scattered, and polluting enterprises and over 2,300 chemical enterprises. The number of chemical industrial parks has been reduced from 199 to 84, while steel production capacity has been cut by 18.4 million tons, oil refining capacity by 22.01 million tons, and primary aluminum capacity by 3.21 million tons.

That’s right—they’ve taken real action and made real cuts.

The transition from old to new growth drivers is driving the continuous optimization of Shandong’s economic structure.

However, this is not merely about industrial upgrading, nor is it a blind pursuit of cutting-edge projects in the internet or high-tech sectors. On the contrary, Shandong has long been a leader in industries such as equipment manufacturing and chemicals; by “grafting” new technologies onto existing industries, it can form industrial chains with competitive advantages.

Shandong’s embrace of “new growth drivers” does not mean abandoning traditional industries, nor can it be achieved merely by attracting a few “high-tech, cutting-edge” projects. Rather, it involves transforming traditional industries into new productive capacity through innovation. Simply repeating the paths taken by other provinces is not the most appropriate approach.

In recent years, the transition from old to new growth drivers has essentially followed two key strategies: first, phasing out outdated industries; and second, increasing the proportion of new growth drivers.

At the end of last year, BYD’s Phase II power battery project was established in Jinan; in January of this year, Huayun Tong signed an agreement with Qingdao to establish its China headquarters there; and in June, Shandong’s first comprehensive digital industrial complex for new energy vehicles was successfully signed. This series of moves has undoubtedly brought new momentum to Shandong.

Whether a city possesses “sustained momentum” depends on its ability to attract new industries. Among these, cutting-edge, flagship projects are particularly crucial, as they determine whether a city can form competitive industrial clusters.

According to reports, in the first half of the year, Shandong’s high-tech manufacturing sector grew by 15.5%, exceeding the growth rate of large-scale industrial enterprises by 10.7 percentage points. Output of new energy vehicles, industrial robots, and integrated circuits increased by 261.0%, 33.1%, and 18.2% year-on-year, respectively.

As the weight of technology increases, so does foresight, and the direction for investment promotion becomes clear.

Breakthroughs in Sight, Victory in Sight

Although Shandong ranks third in the national economy, its presence has never been particularly strong.

This is primarily due to:

First, its major cities are small and scattered. Although Shandong is a major industrial province, none of its cities stands out as particularly strong.

Guangdong has Shenzhen and Guangzhou; Jiangsu has Suzhou and Nanjing; Zhejiang has Hangzhou; Hubei has Wuhan; Sichuan has Chengdu; yet Qingdao, Shandong’s strongest city, ranks only 13th. This most directly illustrates a problem: central cities such as Jinan, Qingdao, and Yantai have not established clear hierarchical distinctions within the province.

Second, the industrial structure is cumbersome and heavy. The industry is sluggish and slow to transform, with outdated production capacity dragging down Shandong’s profile.

Traditional industries account for 70% of total industrial output, and heavy and chemical industries make up 70% of traditional industries. Shandong’s economic surge this year is partly attributable to rising energy prices. This is a double-edged sword: should energy prices fall, it will drag down economic indicators.

Furthermore, Shandong’s business environment still lags behind that of southern provinces.

From 2019 to 2021, the All-China Federation of Industry and Commerce released the results of its “10,000 Private Enterprises Evaluate the Business Environment” survey for three consecutive years, with Shandong’s highest ranking being fifth nationwide.

Fengqi Tea House, a high-tech enterprise, was originally founded in Shandong. However, after relocating to Wuzhen, it became a “national-level innovation and entrepreneurship platform.” In 2019, Shandong launched a province-wide campaign of extensive discussion and self-reflection.

It is evident that when a single enterprise is treated differently in different locations, it follows entirely distinct development trajectories, reflecting the vast disparity in the development environments of the two regions. Last year’s business environment pilot program focused more on self-reform and finding solutions independently. It actively pursued institutional innovation to give the market more room to operate.

Some argue that in the process of market economic development, “government inaction is itself an act of governance,” and “non-intervention by the government is the greatest form of support.”

This view is not entirely accurate. In the early days of reform and opening-up, when grassroots entrepreneurship, widespread business engagement, and street-side commerce were prevalent in the Jiangsu and Zhejiang regions, government non-intervention and non-regulation indeed constituted the greatest support for development.

Today, as Shandong plans its economic development, it is no longer in the early stages of grassroots or individual entrepreneurship seen in Jiangsu and Zhejiang. Instead, it is at a critical juncture of transitioning between old and new growth drivers, which requires even greater support from technology and talent.

Whether in optimizing the business environment or building an industrial ecosystem, the government should not only be present but should also take appropriate “active” measures.

Conclusion

How are high-quality industrial structures and outstanding enterprises forged?

The answer lies in enduring solitude, staying grounded, and striving for continuous growth. Shandong is moving toward the goal of becoming an outstanding yet unassuming “top student.”

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