Cooperation System in Northeast Asia: Current Status and Outlook
2) Geographical scope, key port cities’ current situation, and development strategy for the Pan Yellow Sea Zone
(1) Geographical scope of the Pan Yellow Sea Zone
There has yet to be a clear definition of the economic and spatial scope of the Pan Yellow Sea Zone. Generally, the academe defines it as the area covering the Bohai Gulf Zone of China, Korean peninsula, and Kyushu area in Japan (Won Bae Kim, 2001).
North Korea is subject to various geopolitical constraints.
Thus, excluding it from the definition of the Pan Yellow Sea Zone at present is only appropriate. Note, however, that it should eventually be included depending on its level of economic openness, exchange, and cooperation. Another consideration is its transportation infrastructure connectivity.
Beijing, Tianjin, and other cities in the Shandong, Hebei, and Liaoning provinces of China constitute the Pan Yellow Sea Zone.
All areas in the Korean peninsula except Daegu, Gangwon-do, Gyeongsangbuk-do, and Chungcheongbuk-do make up the Pan Yellow Sea Zone.
7 prefectures in Kyushu and Yamaguchi, Japan are encompassed by the Pan Yellow Sea Zone.
The Pan Yellow Sea Zone is defined by inter-region and inter-city alliances.
It is home to approximately 280 million people (4.7% of the world
Chapter 3• Establishing Logistics and Transportation Linkages 49
population). The region also accounts for around 4% of the world GDP and trade.
<Figure 2- 8> Geographical Scope of the Pan Yellow Sea Zone
CHINA
KOREA
JAPAN
TAIWAN Hong Kong
Taipei
Kaohsiung
Busan Gwangju
Incheon Beijing
Tianjin Yantai Weihai Qingdao
Dalian
Shimonoseki Fukuoka
Kyushu Kitakyushu
<Table 2- 2> Key Indicators for the Pan Yellow Sea Zone (2006)
Country/Region Population GRDP GRDP per Capita Trade Beijing 15.81 mil. USD 96.8 bil. USD 6,210 USD 70.70 bil.
Tianjin 10.75 mil. USD 54.4 bil. USD 5,138 USD 67.41 bil.
Shandong 93.09 mil. USD 274.0 bil. USD 2,954 USD 110.71 bil.
Hebei 68.98 mil. USD 145.7 bil. USD 2,119 USD 23.51 bil.
China
Liaoning 42.71 mil. USD 116.1 bil. USD 2,735 USD 52.43 bil.
Subtotal 231.34 mil. USD 687.0 bil. Avg. USD 2,970 USD 325.0 bil.
Seoul 10.18 mil. USD 208.5 bil. USD 20,482 USD 24.72 bil.
Busan 3.61 mil. USD 51.8 bil. USD 14,340 USD 8.09 bil.
Incheon 2.62 mil. USD 43.7 bil. USD 16,674 USD 15.94 bil.
Gwangju 1.41 mil. USD 20.5 bil. USD 14,533 USD 9.14 bil.
Ulsan 1.09 mil. USD 44.3 bil. USD 40,684 USD 54.94 bil.
Daejeon 1.47 mil. USD 21.0 bil. USD 14,824 USD 2.39 bil.
Gyeonggi 10.91 mil. USD 187.4 bil. USD 17,179 USD 63.22 bil.
Chungnam 1.97 mil. USD 54.6 bil. USD 27,732 USD 38.96 bil.
Jeonbuk 1.87 mil. USD 28.3 bil. USD 15,135 USD 5.47 bil.
Jeonnam 1.94 mil. USD 44.6 bil. USD 22,988 USD 19.05 bil.
Korea
Gyeongnam 3.17 mil. USD 61.5 bil. USD 19,406 USD 31.34 bil.
Subtotal 40.24 mil. USD 766.2 bil. Avg. USD 19,041 USD 258.2 bil.
Fukuoka 506 USD 152.0 bil. USD 30,000 USD 47.64 bil.
Kumamoto 183 USD 45.0 bil. USD 26,218 USD 0.87 bil.
Nagasaki 145 USD 36.6 bil. USD 25,210 USD 4.29 bil.
Oita 120 USD 38.2 bil. USD 31,848 USD 19.04 bil.
Miyazaki 114 USD 32.3 bil. USD 28,403 USD 0.74 bil.
Saga 86 USD 17.5 bil. USD 20,336 USD 1.00 bil.
Kagoshima 174 USD 46.9 bil. USD 26,975 USD 14.25 bil.
Yamaguchi 147 USD 47.3 bil. USD 32,184 USD 31.07 bil.
Japan
Subtotal 14.75 mil. USD 415.8 bil. Avg. USD 28,190 USD 118.9 bil.
Total 286.33 mil. USD 1.869
tril. Avg. USD 6,527 USD 702.1 bil.
Source: Statistical yearbook from each country (2007).
Note: GRDP was calculated based on data in the statistical yearbook from each country and normalized exchange rate for the year 2006 (USD 1 = CNY 7.9718, USD 1 = JPY 119.00, USD 1 = KRW 929.6).
Chapter 3• Establishing Logistics and Transportation Linkages 51
(2) Key port cities
All substantive regional alliance efforts in the Pan Yellow Sea Zone are based on the East Asian City Conference launched in 1991. The conference has expanded to include 10 cities.
Dalian · Tianjin · Yantai · Qingdao, Incheon · Busan · Ulsan, Fukuoka · Kitakyushu · Shimonoseki
The following are the population and economic status of the top 10 port cities in the Pan Yellow Sea Zone:
<Table 2- 3> Economic Status of the 10 Key Cities in the Pan Yellow Sea Zone (2006)
Country/City Population GCDP GCDP per Capita Avg. GDP per Capita Dalian 6.02 mil. USD 38.7 bil. USD 6,424
Tianjin 10.75 mil. USD 54.4 bil. USD 5,138 Yantai 6.51 mil. USD 30.1 bil. USD 4,622 China
Qingdao 8.20 mil. USD 45.1 bil. USD 5,503
USD 5,346 (28.0% that of
Korea) (15.4% that of
Japan)
Subtotal 31.48 mil. USD 168.3
bil. Avg. USD 5,346 Incheon 2.62 mil. USD 43.7 bil. USD 16,674
Busan 3.61 mil. USD 51.8 bil. USD 14,340 Korea
Ulsan 1.09 mil. USD 44.3 bil. USD 40,684
USD 19,098 (3.57 times that of
China) (55.0% that of
Japan) Subtotal 7.32 mil. USD 139.8
bil. Avg. USD 19,098 Fukuoka 1.40 mil. USD 57.1 bil. USD 40,725 Kitakyushu 0.99 mil. USD 29.7 bil. USD 29,894 Shimonoseki 0.29 mil. USD 6.2 bil. USD 21,425 Japan
Subtotal 2.68 mil. USD 93.0 bil. Avg. USD 34,701
USD 34,701 (6.49 times that of
China) (1.82 times that of
Korea)
Total 41.48 mil. USD 401.1
bil. Avg. USD 9,670 Source: Statistical yearbook from each country (2007), JETRO (Japan External Trade Organization) (2008).
Note: GCDP was calculated based on data in the statistical yearbook from each country and normalized exchange rate for the year 2006 (USD 1 = CNY 7.9718, USD 1 = JPY 119.00, USD 1 = KRW 929.6).
<Table 2- 4> Economic and Industrial Structure of Key Cities in the Pan Yellow Sea Zone (2006)
Region Primary
Industry Secondary Industry Tertiary Industry
Dalian 8.5% 46.3% 45.2%
Tianjin 3.0% 55.5% 41.5%
Yantai 9.8% 59.5% 30.7%
China
Qingdao 6.6% 51.8% 41.6%
Incheon 0.8% 31.6% 67.6%
Busan 2.3% 26.1% 71.6%
Korea
Ulsan 0.6% 79.9% 19.5%
Fukuoka 0.1% 11.6% 88.3%
Kitakyushu 0.1% 24.2% 75.7%
Japan
Shimonoseki 1.4% 25.1% 73.5%
Source: Statistical yearbook from each country/city (2007).
The Pan Yellow Sea Zone can pool the materials and labor resources of China, technology (manufacturing and heavy industries) of Korea, and capital of Japan.
Its geographical condition and rich logistics infrastructure also facilitate active exchange. Depending on the level of cooperation, the Pan Yellow Sea Zone has huge potential for regional growth.
Accelerated inter-city cooperation in the Pan Yellow Sea Zone can lead to the formation of an economic zone. Such will be based on efficient labor and industrial specialization by China, Japan, and Korea. In such case, Northeast Asia is expected to record high economic growth like EU and NAFTA.
EU is home to only 6.3% of the world population. Still, it accounts for 25.2% and 35.7% of the world GDP and trade, respectively. Similarly, NAFTA constitutes only 6.7% of the world population. Nonetheless, it makes up 36.2% and 22.7%
of the world GDP and trade, respectively.
Chapter 3• Establishing Logistics and Transportation Linkages 53
(3) Development strategy of key port cities A. Tianjin
Tianjin considerably lags behind Beijing, Shanghai, and Guangzhou in the process of globalization and modernization. Its degree of economic development falls only slightly short of that of Beijing and Shanghai, however.
In terms of its international competitiveness in the financial sector, Tianjin is way behind Shanghai, on a par with Beijing, and ahead of Guangzhou.
Thanks to the city government’s aggressive support, Tianjin’s financial industry has a certain level of growth potential.
Moreover, various factors related to its proximity to Beijing will be advantageous to Tianjin. In fact, such will set the city apart from Shanghai and Guangzhou in terms of the degree of service industry development, airport construction, labor resources, and international exchange.
Tianjin is located in the vicinity of Beijing, China’s political center. It is an important industrial base of Northern China. Tianjin is also at the center of the Pan Bohai Zone. Thus, it wields considerable influence on the surrounding area.
The metropolitan area connecting Beijing and Tianjin has potential to become the hub of Chinese politics, culture, education, and large-scale manufacturing industries. Such shall be realized particularly through the expansion of the manufacturing base of the entire China and Asia-Pacific region.
The location of Tianjin allows it to perform the function of a modernized international port city driving the development of the Jingjinji area and Pan Bohai Zone. In fact, its influence reaches the 3 Bei’s (Hwabei, Dongbei, Xibei).
Therefore, Tianjin is expected to play a very important role in the formation of the 3 biggest economic zones (Pearl River, Yangzi River, and Pan Bohai areas) of China.
Development of the New Binhai Area commenced as per the “Opinions on the Development and Opening of New Binhai in Tianjin” ratified by the
State Council in May 2006. This will fulfill three roles in the development of the Pan Bohai Economic Zone.
First, the development of New Binhai will spearhead the development of the Pan Bohai Economic Zone as a whole. It will also enhance Tianjin’s city function by consolidating the Jingjin area.
Second, the accelerated growth of New Binhai will develop Northern China into the country’s new growth engine.
Third, New Binhai will become the test bed for various reforms in the government management system. It shall also accommodate the local incorporation of large businesses as well as the replacement/improvement of aging industrial bases.
B. Qingdao
Qingdao has a very important role for the Shandong province particularly the Shandong peninsula.
The level of globalization in the city of Qingdao determines that of the Shandong peninsula, which in turn determines that of the Shandong province. In other words, the significance of the level of globalization extends to outside the city. The same is true for the outward economic development strategy.
Qingdao ultimately aims to create an “international city” cluster in the Shandong peninsula. Specifically, it shall enhance its international economic competitiveness through globalization and outward economic development strategy.
One primary city in the area must enhance overall competitiveness of the area in keeping with the globalization trend. Through this, city clusters in the Shandong peninsula can develop linkages with one another.
Qingdao is pursuing the goal of becoming an “international city.” It is strengthening its linkages and economic cooperation efforts with other parts of Northeast Asia. As such, Qingdao is keeping up with the globalization trend of integrating the world economy into one.
Chapter 3• Establishing Logistics and Transportation Linkages 55
The worldwide industrial base transfer targeting China offers new opportunities. Thus, the strategy for promoting inter-regional economic cooperation and development at home takes advantage of such new opportunities.
A unified economic zone has yet to be formed in Northern China. A metropolitan city-based economic zone around Qingdao should be developed further. This ultimately requires the city’s inclusion in the Northeast Asian Economy and Pan Bohai Economic Zone.
C. Qingdao and Yantai
Qingdao and Yantai are located at the heart of the Shandong peninsula. They are geographically close to Japan and Korea. Thus, the two cities have a strategic advantage in regional economic cooperation. Such economic cooperation accompanies FTA-related discussions and industrial relocation efforts between China, Japan, and Korea.
The two cities also have the opportunity to enhance their industrial cooperation with the Kyushu area of Japan and Yellow Sea area of Korea.
Again, this is because of their geographical advantage. Another factor is the complementary industry structure.
Qingdao and Yantai are pushing through with the strategy of strengthening their linkages with the Kyushu area of Japan and west coastal area of Korea.
Target industries are the electronics, information and telecommunications, automobile, and parts industries.
There is a clear disparity in the level of economic development between Beijing and Tianjin and other areas of the Shandong peninsula.
Industrial restructuring and advancement in Beijing and Tianjin will pave the way for an intimate economic cooperation between the two cities. The same goes for other areas of the Shandong peninsula.
Consequently, a powerful industrial cooperation mechanism can be realized. This will be made possible by the appropriate arrangement of industrial factors between the Jingjinji area and Shandong peninsula.
D. Incheon
As one of its development objectives, Incheon seeks to transform into a Northeast Asian hub.
More specifically, a knowledge-based industry cluster and an environment accommodating international businesses shall be created. The international airport and seaports will be inter-linked to vitalize complex logistics activities. Specifically, Incheon shall establish an international logistics base through cooperation with cities in the Bohai Gulf area. Through this, the city shall take a great leap forward to become a Northeast Asian hub.
Incheon seeks to let the world know of its competitiveness as a city, favorable urban conditions, and development goal. As such it will be hosting Incheon World City EXPO 2009 and Asian Games 2014. In general, the city wants to expand cross-border exchange in related areas.
Incheon promotes the establishment of Northeast Asian logistics hub infrastructure. Such is its international cooperation strategy focusing on the region.
The following related strategies can be specified:
An integrated multi-modal transportation system and the mutually preferential treatment system for member port cities shall be established. Such will lay down the basis for cross-border cargo flows among 10 East Asian cities.
A triangular logistics network connecting China (Dalian), Japan (Kitakyushu), and Korea (Incheon) shall be built.
The promotion of the OEAED logistics division’s activities is essential.
Another important task is the creation of a triangular logistics network between China, Japan, and Korea.
Promotion of the OEAED logistics division’s activities
․ Promotion of joint projects dealing with the key tasks for economic development in the Pan Yellow Sea Zone
Chapter 3• Establishing Logistics and Transportation Linkages 57
․ Setup of inter-city information exchange and logistics networks, enabling scholarly and technology exchange between universities
Creation of a triangular logistics network between China, Japan, and Korea to vitalize the logistics industry
․ Regular hosting of Incheon-Kitakyushu Port officials’ meetings;
identification and development of joint projects
․ Container cargo accommodation and exchange vitalization between the three cities (Incheon, Dalian, and Kitakyushu)
In this regard, the Incheon Port Development Council of Korea and Kitakyushu Port Promotion Council recently signed an exchange agreement (Nov. 2007).
E. Busan
Busan has hosted a number of international events such as the Asian Games and APEC Summit. Thus, it has consistently improved its status as an international city. Likewise, Busan has successfully completed the development of the world’s 5th biggest port. This has solidified its position as a world-class logistics port.
Busan has promoted active exchange with the Fukuoka area throughout its history. Recently efforts to enhance inter-city cooperation have been made.
This resulted in the signing of administrative exchange agreements and government-level support works for exchange meetings. Moreover, the city was inducted as a member of international organizations. Private-sector forums have also been promoted.
The Administrative Exchange Agreement signed with Fukuoka was upgraded to a sister-city relationship as of February 2007.
Busan is currently a member of 12 international organizations;
in 4 of those organizations, the city is a joint-member with the Kyushu area (Fukuoka and Kitakyushu) of Japan.
․ Japan-Korea Strait Zone Governors’ Meeting, OEAED, Asia-Pacific City Summit, Asia-Asia-Pacific Tourism Promotion Agency
․ The Asia-Pacific Tourism Promotion Agency has a secretariat office in Busan.
Private sector-level support strategies have been consistently implemented.
The Busan-Fukuoka Forum has been held since 1996. It invites 22 leaders representing the private sectors of the two areas to discuss the administrative means of vitalizing inter-region exchange.
Busan: Busan Ilbo, Dongseo University, Busan National University, Hanjin Heavy Industries, Busan Chamber of Commerce and Industry, Busan Port Authority, Busan Bank, etc.
Fukuoka: Kyushu Railway, Kyushu University, Nishi-Nippon Citibank, Fukuoka Chamber of Commerce, NHK, Nishi-Nippon Newspaper, Kyushu Electric Power, Sumimoto, etc.
Busan plans to coordinate and promote linkages between the two areas’
automobile industries. It seeks to further its support for human exchange toward such end.
Since the second half of 2007, Busan University and Kyushu University have held a joint lecture. For this activity, professors from each school are dispatched to the other school.
In addition, the city is seriously considering the creation of a “No-translation” zone to strengthen the real-life link between the two areas.
Fukuoka has recently implemented the use of both languages in street signs. It also operates cultural education programs on the other region and mutual exchange programs led by private organizations. As a result, the city has received positive feedback.
F. Ulsan
Ulsan is considered the heart of the Korean heavy industry. It has established the basis for the region’s remarkably high per-capita production of USD 40,000. Nonetheless, it has lagged behind considerably in terms of the maturation of international exchange and city culture infrastructure.
Chapter 3• Establishing Logistics and Transportation Linkages 59
As such, Ulsan came out with the Basic Plan for the City’s Global Development. The plan presents the following development vision in January 2008, in celebration of Ulsan’s 10th anniversary as a metropolitan city:
Development as an international industrial city Expansion of world-class city infrastructure
Enhancement of the city’s diplomatic capability and establishment of cross-border networks
Creation of foreigner-friendly residential environment in the city
Development and promotion of citizenship suitable for the Global Village Era
Thanks to efforts related to the plan described above, the 2008 OEAED meeting is set to be held in Ulsan. The city will implement the following strategies as well:
Selection of Ulsan as an International City Model
• “Advanced Industry Promotion City” and “Eco-Industry City”
were primarily selected as International City Models.
Construction of key facilities and cultural infrastructure in the city
• In the case of transportation infrastructure, the passenger port function of the existing ports is highlighted. The upgrade of the existing airport into an international airport is also promoted. In addition, the electrification of express railways and Donghae-Nambu lines is being pursued simultaneously.
Laying down the international city development base for the local government
• In the initial stage, more emphasis is given to the organization/workforce/system-related education/training program development and implementation. The setup of foreigner support systems is also being considered.
G. Fukuoka
Fukuoka has consistently pursued proactive inter-city cooperation and cross-border exchange programs.
The most important fruit of the city’s effort is the Asia-Pacific City Summit (APCS, launched in 1994). APCS has 26 member cities. The secretariat office is located in Fukuoka.
Key accomplishments are as follows: establishment of alliance/sisterhood relationship between member cities;
operation of trainee exchange programs; technology cooperation, and; setup and operation of the Asia-Pacific Tourism Promotion Agency
Fukuoka’s waste processing system and related technology were transferred to other cities in Asia. This was part of the technology cooperation in the region. Fukuoka has also created and managed the official website of APCS in recent years.
One of the key international cooperation projects is the “Japan-Korea Scenic Byway” being pursued by Busan and Fukuoka.
The Fukuoka Asian City Institute has jointly conducted a field study on the feasibility of my-car-tour between Fukuoka and Busan. Fukuoka City has commissioned the Gyeongnam Development Institute for the study.
The project plan sought to promote the two areas’ tourism development. The feasibility of my-car-tour would also be assessed through the Busan-Fukuoka route. Such is expected to be the primary link for the Asian highway in the future.
The study also aimed at laying down the groundwork for Fukuoka’s great leap forward as Asia’s exchange hub.
In addition, new Japan-Korea trip routes are planned in celebration of the 1 Million Passenger Era for the Busan-Fukuoka Ferry in 2007.
The field study revealed that my-car-tour would require huge costs for vehicle transportation. Compared with the use of a local rental car,
my-car-Chapter 3• Establishing Logistics and Transportation Linkages 61
tour would incur more than twice the expenses. The burden of cost also increased when the procedural inconvenience and time cost were considered.
My-car-tour between Japan and Korea seems to require major institutional and economic improvements before it becomes feasible. Enhancement of convenience is also a must. Busan and Fukuoka plan to implement the phased-out institutional reform at the local government level. Specifically, they shall maximize their sisterhood relationship.
The Asia Gateway Campaign 2011 is a noteworthy endeavor. It markets Fukuoka as a prominent gateway to and from Asia in time for the completion of the Kyushu Line of Nippon Railway in 2011.
The plan was established to promote tourism development through joint efforts with Busan. Citizens and private businesses will engage in different projects to connect Busan and Fukuoka to a tourist exchange zone between 2008 and 2011.
More specifically, the transportation systems in the two cities will be inter-linked. Different events are also planned to connect the two areas. The ultimate goal is to develop a single, unique tourism product. The creation of a unified tourist zone that can be accessed using passenger vehicles is being considered. This is still in line with the ongoing “Japan-Korea Scenic Byway” project.
The two cities are carrying out simultaneous tourist attraction works as well.
For instance, global PR activities are being held simultaneously with the Beijing Olympics and Shanghai EXPO. Such activities include the pilot program of different tourist routes for key personnel and tourism industry show. Fukuoka plans to establish the Business & Industry Promotion Council to promote such efforts better.
Considerable effort is made to eliminate the obstacles to traveling between the two cities. In fact, transportation transfer, payment settlement, and other shared service offices are now operational.
The two cities’ common logo was developed with input from citizens and businesses. They are also trying to encourage visitors to extend their stay by highlighting their unique charms.