In September 2013, General Secretary Xi Jinping attended the meeting of democratic life hosted by the Standing Committee of the CPC Hebei Provincial Committee and indicated that three major eastern provinces, including Shandong, should focus on the replacement of old growth drivers with new ones, optimization of the industrial structure and ways to maintain their leading role.

During his visit to Shandong in November 2013, General Secretary Xi stressed that both underdeveloped and developed areas should make efforts to transform their development models as well as enhance the development quality and effectiveness and should not introduce all kinds of investment regardless of its quality.

When General Secretary Xi inspected Shandong in June 2018, he emphasized that the key to promote the high-quality development was to focus on the supply-side structural reform and propel the transformation of economic development quality, efficiency and driving force in accordance with requirements of the new development philosophy. Based on the replacement of old growth drivers with new ones, efforts should be made to promote the industrial upgrading and optimization, the innovation-driven development, and improvement of the infrastructure, build Shandong into a province with strong marine economy, deepen the reform and opening-up and make advances in high-quality development.

General Secretary Xi is always concerned about the development of Shandong. He has given earnest instructions to the province on promoting the innovation, the optimization and characteristic industries, replacing old growth drivers with new ones, reforming with keen determination, transforming the model and structure and implementing the new development philosophy to make new progress in high-quality development.

Remembering his instructions and shouldering more responsibilities, Shandong has resolutely implemented the new development philosophy, improved the development model, the economic structure and the growth impetus, deepened the supply-side structural reform, replaced old growth drivers with new ones more rapidly and striven for the high-quality development to ensure the effective implementation of the spirits of Xi's important instructions.

Reported by Yuan Tao, Du Wenjing, Fu Yuting and Zhao Xiaoju

New Growth Driver,

New Journey

Confronted with the new start and new major challenges, in urgent need to solve the problem of being large but not strong and eliminate environmental and resource constraints, Shandong needs to follow economic laws and achieve the high-quality development more rapidly.

The province should think thoroughly for long-term interests and plan carefully before action. General Secretary Xi's concept of replacing old growth drivers with new ones has offered methods and guidelines for Shandong to achieve the high-quality development. "We can never achieve the high-quality development if we adhere to the old development model and industrial structure," Liu Jiayi, Secretary of Shandong Provincial Committee, said.

Shandong needs to develop new growth drivers before destroying the old ones. In the past year, Shandong took advantage of the national strategy of constructing the Comprehensive Pilot Zone for Replacing Old Growth Drivers with New Ones and synchronously launched and promoted all tasks. One month after the Overall Plan for Constructing the Comprehensive Pilot Zone for Replacing Old Growth Drivers in Shandong was approved by the State Council, the province published the Implementation Plan on Replacing Old Growth Drivers with New Ones in Shandong and Implementation Opinions on Replacing Old Growth Drivers with New Ones in Shandong and improved the top-level design of key projects. Besides, Shandong has focused on the top 10 advantageous modern industrial clusters, launched 11 special development plans successively and established the systems for coordinated growth, including "10 + 3" and "6 Ones". It plans to form the overall layout in one year, achieve preliminary results in three years, make breakthroughs in five years and gain advantages in ten years, which fully manifests the desire and determination of people in Shandong to replace old growth drivers with new ones.

Shandong should transform the extensive growth pattern with great courage to vacate space for development. In Licheng District, Jinan City, the traditional industrial enterprises to be relocated include large state-owned enterprises (SOEs), private enterprises reformed from SOEs and a range of small and medium-sized enterprises (SMEs). The complex situation leads to various difficulties. The district has formulated targeted relocation measures on the "one policy for one enterprise" basis. For the financial difficulty facing many SMEs, based on the development of the new Jinandong Railway Station area and demolition of Jinan-Qingdao High-speed Railway and other major projects, the district has compensated relevant enterprises through area development and facilitated their relocation. As a result, Wanrui Clothing and many other enterprises have relocated successfully.

By the end of last year, 2,635 chemical enterprises have closed or switched to other production and 1,472 have suspended production for rectification in Shandong. The province has overfulfilled its tasks, cutting the overcapacity of coal, pig iron and crude steel respectively by 4.95 million tons, 600,000 tons and 3.55 million tons. The chemical enterprises have entered industrial parks, Jigang Group has relocated and Rizhao Steel Base has put all the production lines into operation. All these demonstrate that Shandong has abandoned the extensive growth model with high energy consumption, severe pollution and low profits and adopted the high-quality development model driven by scientific and technical progress, high-quality labors and institutional innovation. Such model becomes the leading economic development model in Shandong.

As new growth drivers occupy the vacated space, where can the old ones go? The old growth drivers can only be rejuvenated through promoting the industrial upgrading and optimization and giving full play to innovation.

"To gain a foothold for your products, you need to avoid homogenization, focus on innovation and strive for high-quality development," Zhang Dawei, Chairman of Qingdao Hanhe Group, said. He also pointed out that only through adjusting the product structure, upgrading and optimizing products, developing high-end products with high technical contents and additional value, could enterprises make their products different from others. Hanhe Group has put China's first and longest undersea cable with the highest voltage class into operation, successfully gone global and won the bid of the California DC Undersea Cable Project, becoming a leading enterprise in the industry under the guidance of objectives of high-quality development.

The innovation-driven replacement of old growth drivers with the new ones is the key to the high-quality development of Shandong. Hanhe Group and other enterprises are the epitome of Shandong promoting its upgrading with innovation: from "Made in Shandong" to "Created in Shandong", from "Shandong Speed" to "Shandong Quality" and from "Shandong Products" to "Shandong Brands". The Measurements on Replacement of Old Growth Drivers with New Ones Supported by Sci-tech Innovation published in March last year stated that in the 13th Five-Year Plan period, enterprises and scientific research institutes in Shandong should center on key fields of such replacement and lead or participate in the implementation of over 100 national science and technology major projects and key R&D programs every year. Among them, projects with better support for accelerating such replacement will be given up to RMB 10 million of provincial funds for science and technology.

Shandong has taken trial measures, being a pioneer. In the past year, Shandong focused on the key task of replacing old growth drivers with new ones and was bold in accelerating and expanding the high-quality development.

Early on the morning of February 19, Smagin Sergei Ivanovich, a corresponding member of Russian Academy of Sciences and Russian Academy of Engineering, went to the Qingdao International Academician Park just after getting off the plane to discuss with his Chinese partners on matters he considered to be "worth trying", namely the R&D and industrialization of intelligent navigation and operation equipment for high and deep seas and the submarine simulation environmental system.

Why did the Russian academician choose to take a risk? Because the staff of Qingdao International Academician Park helped him assemble a technical team led by experts from Ocean University of China and Taishan industry leading talents in Shandong in less than one month. "I feel very satisfied that such an excellent cooperative team is assembled within a short period," Smagin said.

"We established the Qingdao International Academician Park from nothing to attract domestic and foreign elites to innovate and start up their businesses in Qingdao, carve out a way to the high-quality development and lead the high-quality development of Shandong in the new era," Wang Xijing, Secretary of Licang District Committee, Qingdao, said. So far, 32 projects of the Park have been put into operation while 13 projects have produced 38 kinds of products. In 2018, its main business income reached RMB 10 billion and comprehensive tax RMB 1 billion.

The ratio among three major industries has been adjusted to 6.5:44.0:49.5 from 6.7:45.3:48.0 with the service industry contributing to 60% of the economic growth. And the investment on new technologies, new businesses, new models and new industries has accounted for 43.9% of the total amount. In the past year, Shandong achieved a GDP of RMB 7 trillion and kept forging ahead. The new growth drivers showed great vitality in Shandong. Efforts have been made to promote reforms with the innovation, enhance the stock with the increment and facilitate the overall progress with major breakthroughs. As a result, the replacement of old growth drivers with new ones has taken shape in an all-round way.

Shandong will move forward with all these beneficial conditions. The replacement of old growth drivers with new ones has become a "prairie fire", surely leading Shandong to proceed with the high-quality development.

Top 10 Industries

Serving as the Foundation of the High-quality Development

Within less than one month, 100 buses powered by hydrogen fuel will be open to the public on streets in Jinan, Liaocheng and Weifang. Such buses have outstanding advantages in green environmental protection and are significant for defending the blue sky and adjusting Shandong's energy structure. It is known that the Weichai New Energy Power Industrial Park Project to which hydrogen fuel cells and vehicles belong is Shandong's key project in the new energy industry. The province was the first at the provincial level to formulate a medium and long-term development plan for the hydrogen energy industry last year. At the beginning of this year, it took the lead in establishing an industrial alliance and arranging the whole industry chain of hydrogen energy.

The new energy industry is one of the top 10 industries prioritized by Shandong. General Secretary Xi clearly stated that importance should be attached to transforming and upgrading the industrial structure in order to promote the high-quality economic development. To replace old growth drivers with new ones, Shandong should take the enhancement of the industrial level and optimization of the industrial structure as the top priority. To this end, the province has made new breakthroughs in optimizing, strengthening and expanding the top 10 industries, promoted the rapid growth and scale expansion of emerging industries and enhanced the level as well as strength of traditional industries.

The blueprint has been completed. On the first working day after the Spring Festival holiday, Secretary Liu Jiayi proceeded with measures proposed last year of taking advanced provinces as the benchmark and confronting problems. Later, on February 11 this year, he advocated the action of "Living up to Our Responsibility and Focusing on Implementation", mobilizing the whole province to turn the "planning drawing" into "working drawing" and the "timetable" into "milometer". The Department of Industry and Information Technology of Shandong undertakes the formulation of plans for four industries, including the new-generation information technology, high-end equipment, high-end chemical engineering and new materials. Director Ji Binchang introduced that the implementation plan would pay special attention to giving full play to leading enterprises and industry associations which would ensure the targeted and effective implementation of these plans.

Solid progress has been made in the project. According to the data given by the People's Government of Shandong Province on a press conference at the end of January, among Shandong's first batch of 450 preferred major projects in 2018, 360 ones have been under construction with an annual investment of RMB 167 billion. Besides, the economic investment on new technologies, new businesses, new models and new industries has accounted for 43.9% of the total amount. "6 Ones" mean one provincial leader to take the lead, one working team to carry forward, one plan as guidance, one think tank for support, one alliance (association) for assistance and one (or more) fund for guarantee. Based on the industrial promotion systems of "6 Ones" and "Top 10", the platform integrating all kinds of resources has been established to coordinate cities and counties, the think tank, the alliance (association) and relevant enterprises; and the video conference, observation tour and other measures have been utilized to ease pressure, stimulate motivation and make people in Shandong work efficiently and passionately. During the Hong Kong Shandong Week in December 2018, the Finance Office of Qingdao, People's Government of Laoshan District and Gransing Financial Group, Hong Kong signed the Agreement on Strategic Cooperation and Agreement on Project Implementation. After less than one month, on January 1, 2019, Qingdao Guotou Dingcheng Asset Management Co., Ltd. founded in accordance with these agreements acquired the business license in Laoshan, leading more enterprises in Qingdao to the overseas capital market.

Shandong has made use of opportunities to develop itself. In the last year, a range of major events for attracting investment were carried out, including the Forum for Central Enterprises to Facilitate the Replacement of Old Growth Drivers with New Ones in Shandong, the International Summit on Innovation and Development of Youth Entrepreneurs, the MFA Presenting Shandong Province, the 2018 Conference of Great Business Partners, the first Chairman Summit of All-China Federation of Industry and Commerce, the Europe Business Week and the Hong Kong Shandong Week. These events focused on the top ten industries, attracted investment to establish, improve and enhance the industry chain, dispatched special personnel to offer careful services. As a result, various innovative projects, leading-edge projects and breakthrough projects were implemented successively, contributing to the sustainable development of relevant industries. The medical accelerator of Jonoon, the unmanned driving technology exclusive to Chinese Academy of Sciences and other projects have filled the gap in Shandong. Jinan signed 23 foreign-funded projects with Fortune Global 500 enterprises last year. The "8 + 6" Wafer Project of Foxconn, the Optoelectronic Integrated Circuit Project of Amer International Group and other projects have remedied the shortage of chips and screens in the new-generation information technology industry.

"We have determined 106 projects directly related to the top 10 industries in 2019 and the total investment has reached RMB 254 billion," the relevant responsible person of Shandong Development and Reform Commission said. Last September, the province began to select preferred major projects for the coming year and assigned major projects to lower levels two months in advance, taking the initiative to complete all tasks. Additionally, the province has established a mechanism for dynamically adjusting major projects this year. In the middle of the year, it will make adjustment and cancel the projects that cannot be initiated, and cannot generate effective workloads, due to major changes in investors, market demands, construction conditions and other factors. At the same time, it will add a new batch of projects that meet the requirements.

Shandong has achieved outstanding results. Over the past year, the high-end equipment, the new-generation information technology manufacturing as well as new energy and materials grew more rapidly. Respectively, the added value of them increased by 5.5%, 6.7% and 6.0% and were 0.3, 1.5 and 0.8 percent points higher than that of industrial enterprises above state designated scale. The added value of equipment manufacturing industry and hi-tech industry increased by 7.5% and 9.6% respectively and were 2.3 and 4.4 percent points higher than that of industrial enterprises above state designated scale. Solid progress has been made in adjusting structures of the steel industry and petrochemical industry. All the modern steel production lines built first in Phase I of Rizhao Steel Base have been put into operation. And three major petrochemical projects have been included in the national planning and layout scheme for the petrochemical industry.

Shandong possesses a brighter future. At the end of February, General Secretary Xi looked far into the Zhifu Bay where Blue Whale 1 was located. At that time, a large deep-sea cage named Long Whale 1 was in the stage of final decoration and equipment debugging. With the oil and gas drilling platform as its main product, CIMC Raffles has actively implemented the "oil to fishery" strategy and launched the first cage product, creating a new "landmark" for deep-sea intelligent fish farming and marine leisure tourism. In the new year, Shandong will attach more importance to the development of the top 10 competitive industries which are the key to replace old growth drivers with new ones.

Strengthening the Environmental Support,

Improving the Institutional Guarantee

General Secretary Xi stressed that the reformer can make advances, the innovator can become stronger and one who carries out reform and innovation can succeed. Shandong has realized that in order to gain new advantages in high-quality development, it should further deepen the reform to offer effective institutional supply. Shandong has continuously improved the infrastructure, institutional innovation and talent guarantee and offered strong support, thus the high-quality development could take shape in an all-round way.

On December 26, 2018, with the departure of G9217 Fuxing Train from the Jinandong Railway Station, Jinan-Qingdao High-speed Railway and Qingdao-Yancheng Railway were officially open to traffic. It was the first time for Shandong to open two railways simultaneously within one year. And both railways were completed one year in advance. Behind the fast speed were the firm determination and careful planning of Shandong to remedy the weakness in infrastructure.

The province has realized that the modern advantageous industrial cluster could not expand without the infrastructure and other factor conditions. According to the planning of this year, Shandong will make efforts to start the construction of five projects, including Zhengzhou-Jinan High-speed Railway, Xiong'an-Shangqiu High-speed Railway, Weifang-Yantai High-speed Railway, the Heze-Lankao section of Lunan High-speed Railway and Jinan Railway Station-Jinandong Railway Station Line, and accelerate the preliminary work of the eastern line of Beijing-Shanghai High-speed Railway, Jinan-Binzhou High-speed Railway, Laixi-Rongcheng High-speed Railway and other projects. Among 27 expressway projects under construction, 9 of them will surely be completed and open to traffic within this year. Meanwhile, Shandong will do a good job of four airport projects under construction, start the establishment of Heze Mudan Airport and the extension of Penglai International Airport Phase II, complete the Qingdao Jiaodong International Airport and put it into operation, and promote the reconstruction as well as expansion of Jinan International Airport Phase II and the preliminary work of Zaozhuang Airport and Liaocheng Airport.

As one of the three pillars for replacing old growth drivers with new ones, the major infrastructure needs high-quality overall planning and solid progress. And the institutional innovation which can strongly support new growth drivers requires Shandong to bravely carry out ideological emancipation and ideology reforms to break loose from the tradition. In the course of replacing old growth drivers with new ones more rapidly and promoting the high-quality development, all departments at different levels have put pressure on themselves, brought forth new working modes and technical means from old ones and adjusted the evaluation system according to actual circumstances. All these measures have powered the replacement and gathered strength for the high-quality development.

Problems of the enterprises with a main business income of over RMB 1 billion will be reported to the Office of the Municipal Government while these of the enterprises whose main business income is less than RMB 1 billion will be reported to the government of counties and districts and the management committee of municipal development zones. Dongying City has implemented the "through-train" system for governments to solve problems of enterprises since January of this year. Government departments have utilized the ledger management for problems reflected by enterprises, solved these problems timely and replied to relevant enterprises on the results until their problems are solved. "We offer stamped envelopes exclusive to the "through-train" system for enterprises sending their problems by mail in order to help them solve difficulties and problems," the relevant responsible person of the Office of the Dongying Municipal Government stated.

The environment represents the soft power and productive force. As the reform of "one-stop" service advances continuously, the self-targeted reform of streamlining administration and delegating power has entered a more difficult phase and the business environment of Shandong has witnessed continual optimization. According to feedback of the State Council accountability inspection on the business environment, 5 indicators among the total 7 indicators of Shandong rank the top nationwide. Under such circumstances, Shandong Companion Group built the Cheese Intelligent Dyeing Factory Phase I Project with an annual output of 200,000 tons in Xintai. Just 19 days after signing the land agreement, the group acquired the construction permit. And Genova Inc. completed the Novaferon Production Base within 10 months, setting a national record for the fastest construction of a GMP standard pharmaceutical factory.

In May of last year, the visual supervision service platform for replacing old growth drivers with new ones initiated by Jining was put into operation. Such platform marked the government's adjustment in the macro management, thinking modes, ideas and approaches and technical means to make them adapt to the replacement. In January of this year, the fourth session of the National People's Congress of Rizhao approved the new evaluation system for high-quality development, retained 15 indicators of the original system, added 26 new indicators which could better reflect the high-quality development, including the per capita GDP and the ease of doing business index, and integrated the comprehensive quality benefit with new development philosophy and public feelings.

Shandong has kept putting pressure on relevant departments, advanced bravely, further emancipated the mind and innovatively improved the system and mechanism, offering solid guarantee and inexhaustible impetus for the high-quality development. In this course, the province has examined itself, taken advanced provinces as the benchmark and used the experience of others for reference. Shandong Industrial Technology Research Institute is an important achievement of the Party and government delegation of Shandong after investigating the south and one of Shandong's first batch of 15 major projects for the institutional innovation. The institute is totally different from others with no competent department and administrative level. It implements the enterprise-style management and market-based operation and will build the pilot area for reforming scientific research institutions, the demonstration area for innovation-driven development and the pilot site for reforming systems and mechanisms, serving as a model for promoting the institutional innovation across Shandong.

For the rapid replacement of old growth drivers with new ones, innovation is the primary driving force and talent the primary resource. Last year, Shandong Provincial Party Committee and the People's Government of Shandong Province issued the Opinions on Offering Talent Support for the Replacement of Old Growth Drivers with New Ones and proposed 20 talent policies which were quite competitive and favorable and could lead to great breakthroughs. They hoped that the services and support offered by talents to such replacement could be enhanced through more active, more open and more effective talent policies. At present, the Shandong Association for Science and Technology focuses on seven of the top 10 industries in replacing old growth drivers with new ones, namely the new-generation information technology, high-end equipment, new energy and materials, modern marine, medical care and health preservation, high-end chemical engineering and modern efficient agriculture, and has made the talent map in major industries of Shandong for the first time. Recently, Qingdao has issued the Enforcement Regulations (Trial) on the "Gold Seed" Talent Reserve Project of Qingdao and planned to select a range of excellent students from domestic universities to be developed into first-class educational institutions and foreign universities. These students will sign the contract on talent credit with enterprises in areas under Qingdao's jurisdiction and should obtain employment in Qingdao as stipulated by the contract after graduation. The employer should give them a certain amount of tuition and living and studying subsidies. Qingdao has assembled many high-quality talents through the talent reserve project to promote its replacement of old growth drivers with new ones. It is reported that such measure is initiated by Qingdao.

Shandong will proceed with a new round of development and shoulder the responsibilities in the new year. Replacing old growth drivers with new ones more rapidly and seizing opportunities for high-quality development, Shandong with its confidence, determination and ability strives to create a brighter future.