Daqing retools to diversify away from crude oil sector

Daqing, a resource-rich city in Heilongjiang province, is transforming its growth pattern from an overreliance on oil to a more diversified industrial system.

"Facing falling crude output and global prices, Daqing's economy encountered unprecedented difficulties in the past two years," said Han Lihua, Party secretary and mayor of Daqing, home to China's largest oil field.

Daqing has made great strides to promote the chemical, automobile and high-end food sectors as well as electronic and information manufacturing, modern services, and strategic emerging industries.

The city's GDP is expected to hit 66.65 billion yuan ($9.68 billion) in the first quarter, up 2.1 percent year-on-year. Profits made by industrial enterprises realized positive growth for the first time in the past three years.

The Volvo Cars Daqing plant, with an initial annual capacity of 80,000 vehicles, is leading the city's automobile and parts sector to develop rapidly. Exports to the US of Volvo's new S90 sedan, which is selling well in the Chinese market, began on Wednesday. The first batch of 400 vehicles is scheduled to arrive in the US in June.

The Daqing Auto Spare Parts Industrial Park, a 200 million yuan factory producing 200,000 car seats annually, started operating in August. This year, its annual production value is expected to reach 500 million yuan.

According to Song Kui, a researcher from the Heilongjiang Academy of Social Sciences, the Volvo Daqing plant is a successful case of promoting industrial transformation and upgrading a leading company.

As a brand enjoying a world-wide reputation for good quality, Volvo could help upgrade the high-end equipment manufacturing industry of Daqing and bring products made in the city to the global market, said Song.

"The oil industry's decades of development has left the city a treasure of talented engineers and researchers as well as the spirit of the Iron Man Wang Jinxi (a model oil worker living between 1923 and 1970) that should encourage us to work hard," said Han.

Lyu Leyang, vice-general manager of Volvo Daqing plant, said he feels the Iron Man spirit among those working at the plant.