Marubeni Signs Comprehensive Economic and Trade Agreement with Shandong Provincial People's Government

Oct. 26. 2005
Marubeni Corporation

On October 25, Marubeni Corporation signed a comprehensive economic and trade agreement with Shangdong Provincial People’s Government, in the presence of Governor Han Yuqun and Vice Governor Sun Shoupu (responsible for external trade and economic affairs). The agreement was signed by Zhou Jiabin, Director of the Foreign Trade & Economic Cooperation Department, and Makoto Isogai, Corporate Executive Vice President of Marubeni (and chairman of the China Business Strategic Planning & Promotion Committee).

Shangdong Province has a population of 91.8 million people and in 2004 outperformed Jiangsu Province to become the number two province in China in terms of GDP after Guangdong Province. Having recorded higher industrial production than Guangdong Province for the first time ever in the first half of 2005 (January to June) it is now emerging as the number one province in the country. If Shangdong Province’s economic development continues at this rate, it could well overtake Guangdong Province in terms of GDP as well next year to become the top province in China. That would mean GDP on a scale superior to that of entire South East Asian countries such as the Philippines, Malaysia and Thailand, equivalent to over $2,000 per person. Shangdong Province is part of the Economic Center of the Bohai Rim Region on which the Chinese government is focusing and is one of the regions that is expected to experience the highest levels of growth in the future, based on industries such as agriculture, textiles, petrochemicals, paper and energy. It has also helped produce famous companies such as Haier, Tsingtao Beer and Hisense and is making a move into the global market. What is more, it has consistently adopted a positive stance towards promoting trade and economic cooperation with Japan within China.

The relationship between Marubeni and Shangdong Province stretches back a quarter of a century, with mutual trade and investment having been on the increase ever since Marubeni set up an office in Tsingtao in 1980, the first foreign company to do so. In addition to trade in textiles and clothing, food, chemicals and commodities such as pulp and chips, Marubeni’s track record to date in cooperation with Shangdong Province includes textile machinery (delivery of approximately 10,000 new looms over the last ten years), pumped-up hydroelectric power projects (yen loans totaling ¥7.2 billion) and oil pipe manufacturing facilities. Marubeni has invested in companies in fields such as food, chemicals and distribution.

Acting in its role as a global network and commercial company, Marubeni is currently actively promoting joint initiatives in third countries in conjunction with Chinese companies (accepting joint orders with Chinese companies for a cement plant in Saudi Arabia and a power plant in Vietnam) in line with the Chinese government’s “going out” policy (overseas expansion of Chinese companies).

It is as a result of ongoing cooperation such as this that Marubeni and the Shangdong Provincial People’s Government have signed this agreement stating that they will build on their underlying trade and economic relationship to step up and step up initiatives between Marubeni and leading companies in Shangdong Province and to increase cooperation both within the province and with overseas partners.

As it moves forwards with a full range of trade and investment initiatives in cooperation with the Shangdong Provincial People’s Government in the future, Marubeni plans to concentrate on the following areas in particular.

* Active cooperation with the construction of manufacturing bases in Shangdong Province (machinery and equipment, electronics, chemicals, food processing, textiles and clothing, paper and pulp, etc.)

* Joint initiatives in Japan and third countries in conjunction with companies in Shangdong Province (“going out” policy)

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