The economy of Heilongjiang may be sputtering but its abundant agricultural and natural resources should appeal to Singaporean companies looking for opportunities, the governor of China's northernmost province said yesterday.
Mr Lu Hao, speaking at an investment promotions event targeted at China-based Singapore businessmen in Beijing, said he hopes to collaborate in areas such as food processing, real estate, tourism and health.
The province, which grew at 5.7 per cent last year compared with 6.9 per cent nationally, would also welcome investments in the high-tech and financial sectors, where it lacks expertise.
Mr Lu said Singapore and Heilongjiang could leverage on each others' strengths to jointly explore opportunities in Russia's Far East.
The governor, who is a rising political star, told the businessmen that the growth potential of the province was not "well understood", and it was making progress with its shift away from an over-reliance on its energy sector.
This is the biggest challenge that we face in our economic transformation.
MR LU HAO, on how Heilongjiang's growth has been dragged down by the slowdown of its energy sector.
Mr Lu said growth was dragged down mostly by the energy sector, where the Daqing oilfield - China's biggest - suffered from a double whammy of lower production and a sharp drop in global oil prices.
"This is the biggest challenge that we face in our economic transformation," he said.
Despite much slower growth in the industrial sector, Mr Lu said the agriculture and service sectors registered a healthy growth that was 1 to 2 per cent higher than the national average. Financial services, telecommunications and postal services grew by more than 20 per cent last year.
Growth in external demand brought about by tourism has also contributed to the growth of the service sector, he added.
Singapore's Ambassador to China, Mr Stanley Loh, said Singapore's cumulative actual investments into Heilongjiang stood at around 2 billion yuan (S$408 million), with a total of 141 projects. This was relatively small, compared with Singapore's investments in the coastal provinces such as neighbouring Liaoning, which attracted US$5.7 billion (S$7.7 billion) worth of investments as of last month.
Singapore property giant CapitaLand, one of the first movers into this nascent market for Singapore businesses, accounted for nearly 70 per cent of Singapore's investment in the province with its two shopping malls in the capital city of Harbin.
Other major players are agribusiness Wilmar International, which has a food processing factory in Harbin, and Global Logistic Properties, with a logistics warehouse in the city.
Mr Wong Car Wha, regional general manager of CapitaLand Mall Asia's North-east and Central China, said yesterday that while its two malls were successful now, the projects had suffered from delays and needed extra funding due to construction problems faced in the winter.
"We were not familiar with Harbin's weather. But we hope to learn from these experiences and do better in our future projects in Heilongjiang," he said.