China Business

China Has Big Plans For Dalian and It’s Already Paris Hilton Like HOT.

In just the last few months, my firm has seen a huge upsurge in companies seeking either to start their China businesses in Dalian or setting up an additional outpost there. Our clients are looking to Dalian for both manufacturing (much of it maritime related) and for high tech. To sort of quote renowned philosopher, Paris Hilton, Dalian is like HOT.

The following six things combine to make Dalian one of China’s hottest cities for business:

1. Dalian is Liaoning Province’s second largest city (after Shenyang), but its largest port. Dalian port is the third largest port in China overall and the first largest for petroleum.

2. It is an eminently “livable city.”

3. Its former mayor, Bo Xilai, is was China’s Minister of Commerce and he is now a Politburo member of the Central Committee and Party Secretary of Chongqing]

4. It is benefiting from Beijing’s policies of encouraging high tech and encouraging the rehabilitation of its Northeast industrial region. Intel recently chose Dalian as the location for its first Asian chipset plant. Dalian has long been an outsourcing center and it is often referred to as China’s Bangalore.

5. IP protections are decent and there are plenty of good local lawyers.

6. Xinhua recently did a story on China’s plans to make Dalian the shipping, logistics center in NE Asia by 2020 so as to “facilitate the forging of a free trade zone of China, the Republic of Korea, and Japan” and make Dalian’s port as prominent as Busan in Korea and Yokohama in Japan. Dalian’s mayor, Xia Deren, is proposing a free trade zone composed of China, Korea and Japan.

Just about everything is pointing to a bright future for Dalian.

19 responses to “China Has Big Plans For Dalian and It’s Already Paris Hilton Like HOT.”

  1. I agree regarding Dalian being a livable city. It was beautiful when I visited and has managed to maintain character while undergoing development, something Beijing has not done well. Perhaps some wise city planners read up on smart growth.
    Isn’t it also 中国的足球城,or something like that?

  2. No doubt, the recent start up has something to do with the cities success.
    But seriously folks…
    More money is getting dropped in the software park, and the construction out there shows no sign of letting up. The shipyard is busier these days with a fresh injection of Koreans.
    That said, Dalian has yet to develop any character in my book (or anyone else’s book). The whole IT industry and traditional Northeastern culture are at two opposite ends of the spectrum.

  3. Parts of Dalian always reminded me of San Francisco, for some reason. Dalian is infinitely more liveable than Beijing, imho. It just needs to become a little bit more cosmopolitan. But perhaps that is her charm. Beijing is really played at the moment for me.

  4. Dalian’s been (kinda, sorta) hot for awhile. Dan, perhaps your clients started thinking about it since you’ve been talking it up so much on this blog during the past year. Dalian will continue taking off as China expands the port there, though I think Tianjin won’t go quietly as the other big northern port.
    As to the two comments, yes Dalian has deemed itself China’s soccer city (mainly due to Dalian Shide’s dominance in Jia A/CSL) and not sure if its still the case, but (some) of the sewer covers were shaped like soccer balls in the past. @Rick’s comment, I haven’t spent a lot of time in Dalian, but have spent lots of time in Liaoning and Dalian just never struck me as having very much of any “traditional Northeastern culture”, it seems pretty much a lone wolf, probably due to its warmer climate and its moving in and out of different hands, more so than the other dongbei cities.

  5. Something a lot of us in the city have been saying for a while. By most measures, the place is heading in the right direction, especially in the context of how the rest of China is achieving its growth. There are issues, especially with traffic and water, but those are solvable (getting people past the idea that EVERYONE needs to start work/school at 8 a.m. would do wonders).
    Glen, about the football (or as we Americans call it, that sport you play as a kid then forget exists until you get a passport):
    It is and it isn’t soccer city. The stadium is up in Jinzhou, about an hour trip from the city center, and the team has been struggling for the past few years. Ask the locals, and the response runs something like, “Well, they used to be good….but now they suck! F– them!” Ah, sport.

  6. Rick,
    I should have mentioned the imaginatively named as the fifth factor behind Dalian’s growth. What do you mean by character?
    Seattle has both shipping and IT and I am not sure they are complete opposites.
    We actually have a number of high tech clients in or involved with the fishing industry.

  7. b.cheng,
    I do talk up Dalian a lot on this blog because we do a lot of business there and have a long-term relationship with a great law firm there as well. But I would love to do the same thing for Qingdao (where both things are also true), but it just seems Dalian gets a lot more press. And, let’s face it, where would you rather be, Dalian or Tianjin?

  8. Chris,
    Interesting. I still think of Dalian as a soccer city and did not know it had fallen from grace. Then again, I have always thought of soccer as that sport for people who could not make it in basketball or real football.

  9. Chris and CLB, expectations in Dalian are just too high. They are only 2 years removed from being league champs, but the past two seasons (5th and 6th) have been so foreign to the people that its a bit of a shock. Didn’t they used to actually play in Dalian instead of Jinzhou? I vaguely remember a stadium in the city. Anyways, having the champion this year be a fellow northeastern team will certainly be a motivating factor for the team in the coming season.

  10. I only spent a week in Dalian, but that was enough to confirm that it is a great place. Also, the number of people claiming descent from and a kind of allegiance to Yantai would explain why it isn’t really that “northeastern” a city.
    And American football is a game for people who couldn’t make it in rugby.

  11. wk,
    I’ve heard that rumor, too. Could make things interesting.
    Glen and b. cheng,
    The stadium was in Olympic Square, just about at the city’s geographic center. I forget when it moved, but it was before I got there in 2006.
    Re: Qingdao,
    I don’t know much about the city or why it hasn’t gotten the attention Dalian has, except to say that Xia Deren, Dalian’s current mayor, seems to have a knack for marketing. That’s not the whole story, but it might be why we hear more.
    I was in Qingdao in November and loved it. Just a gorgeous city. Certainly deserves attention.

  12. Xia Deren’s marketing flair comes across clearly in some great articles related to the “Intel Effect”. They are all in Chinese as far as I can tell. If you would like a copy of a quick translation send me an email. In Chinese, the articles can be found by searching for the 因特尔效应.

  13. A critical factor in Dalian’s rise, even today, is Bo Xilai. I mean he’s such a huge benefactor to have and his rise, and the city’s, is sort of connected. Sure, Bo is far removed from his days as mayor, but the continued success of the city, at least for the next few years, is something he can still take credit for, isn’t it?
    I think that’s why we are hearing so much about Dalian and not Qingdao, the government leaders, past and present, don’t seem so bent on moving up the ladder, though perhaps hosting some Olympic events will cause the Western media and others to take note of the city.

  14. Re: Dalian has no character
    The place is kicking up too many sterile buildings, and all the “new” bits have as much character as a fresh paved parking lot. And the “old” bits don’t have much to offer culturally – the Russian bits are cool, and the Japanese bits (that haven’t been demolished) are mostly just sitting there not really being used for anything other than resentment.
    Of course it is a new city, and it won’t develop character overnight.

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