Completion Report Project Number: 48012-001 Technical Assistance Number: 9036 June 2020 People’s Republic of China: Strategy for Liaoning North Yellow Sea Regional Cooperation and Development This document is being disclosed to the public in accordance with ADB’s Access to Information Policy. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. TECHNICAL ASSISTANCE COMPLETION REPORT TA Number, Country, and Name: Amount Approved: $400,000.00 TA 9036-PRC: Strategy for Liaoning North Yellow Sea Regional Revised Amount: Not applicable Cooperation and Development Executing Agency: Source of Funding: Amount Undisbursed: Amount Used: Liaoning Provincial Department of TASF-other sources $3,862.88 $396,137.12 Finance TA Approval Date: TA Signing Date: TA Completion Date 14 December 2015 5 January 2016 Original Date: Latest Revised Date: 30 July 2017 28 February 2018 Financial Closing Number of Date: 21 May 2018 Extensions: 1 TA Type: Policy and advisory Description The Government of the People’s Republic of China (PRC) requested the Asian Development Bank (ADB) to provide a policy and advisory technical assistance (TA) to support its regional cooperation and integration (RCI) efforts and overall globalization strategy in the Northeast, PRC which was also a focus of central government revitalization measures.a,b RCI between provinces in the Northeast and neighboring regions of the Republic of Korea, Mongolia, and the Russian Federation on common development issues and policy coordination was also being facilitated by the Greater Tumen Initiative’s Northeast Asia Local Cooperation Committee.c Liaoning was one of three northeastern PRC provinces participating in the initiative and particularly well-placed to take part in and benefit from RCI and globalization. As the region’s only coastal province, it served as both an internal transport hub between the northeastern and central regions and a key portal of the Eurasian Continental Bridge moving freight and passengers by rail between seaports on the Pacific and in Europe. Its overland connection with Europe had recently been strengthened by the opening of a new rail link between its major North Yellow Sea port of Yingkou and the Russian Federation’s railway system. The newly established Dalian Jinpu New Zone along the same coast was intended to be a focus of foreign investment, two- way international trade, and RCI in Northeast Asia. Overall, the TA project aimed to provide a road map for the province to maximize RCI benefits as it implemented its obligations under the PRC’s globalization strategy and help highlight measures the Liaoning Provincial Department of Finance could take to reduce barriers to interprovincial trade and commerce within the PRC and to trade and commerce within Northeast Asia. Research was to be undertaken on the key obstacles to deeper RCI, and domestic and international experience in designing and implementing regional cooperation programs was to be studied. The TA was also intended to help Liaoning better position itself to benefit from a recently concluded economic partnership agreement between Mongolia and Japan by exploring ways to make the province a more attractive transit corridor for the growth in Japan–Mongolia trade expected to follow. Expected Impact, Outcome, and Outputs The expected impacts were augmenting the cooperation of internal subregions of the Northeast and promoting regional cooperation in Northeast Asia. The expected outcome was for Liaoning Province to adopt an RCI development strategy and implementation action plan. The outcome was to be achieved through delivery of three outputs: Output 1: Status report and impact assessment produced on implementation of earlier regional development programs produced. The TA was to support analysis of the extent to which previous initiatives had made Liaoning’s economy more competitive, expanded trade (including transit traffic), and attracted investment. Output 2: Regional cooperation and integration priorities and models for Liaoning Province developed. Five technical studies were to be undertaken with the results published as knowledge projects targeting such key stakeholders as potential investors, trading partners, and infrastructure development managers. The studies would cover Liaoning’s infrastructure, industrial structure and capacity, financial resource requirements, likely sources of investment capital, and domestic and international experience designing and implementing regional cooperation programs. Output 3: Regional cooperation and integration needs assessment, development strategy, and implementation action plan prepared. The basis and status of Liaoning’s participation in the PRC’s globalization strategy was to be analyzed, linking it to efforts to revitalize the northeastern PRC. The resulting report was to present the framework, pathways, and policy system needed to guide the province’s implementation of the PRC’s globalization strategy, and to identify ways ADB could support this effort in line with the four pillars of ADB’s own RCI strategy. 2 Implementation Arrangements Liaoning Province Department of Finance served as the executing and implementing agency. The Provincial Financial Research Institute in Liaoning supported TA implementation and supervised the day-to-day work of the consultants, workshops, and other stakeholder consultations. The Public Management, Financial Sector, and Regional Cooperation Division of ADB’s East Asia Department administered and supervised TA implementation and to engage actively in sharing knowledge and good practices in the region. All the expected project outputs were delivered while all but two of the planned activities were completed later than planned. A consulting firm was recruited to provide a team of international and national experts to carry out the technical studies. Three international consultants were to be engaged for a total of 10 person-months: a team leader (and trade and development specialist), an economic policy analyst, and an infrastructure finance specialist. The three national consultants were engaged for a total of 24 person-months, including a legal and regulatory expert, an institutional development specialist with expertise on regional cooperation initiatives in which the PRC was participating, and an expert in monitoring and evaluation of policy implementation. The consultants were mobilized on 23 September 2016. The consultancy services were full lump-sum contracts, and remuneration was paid based on progress on milestones. All deliverables were received, no variations were required to the consultants' contracted inputs, and the originally planned input days were fully used. The recruitment process for the consulting firm (from advertisement through selection to contract signing) took 8 months instead of the originally planned 3 months due to the need to accommodate extra requirements by the executing agency. Additional time was needed afterward for the contracted consulting firm to provide acceptable replacements for national consultant positions. As a result, the TA was extended by 8 months from the original completion date of 30 June 2017 to 28 February 2018. The project closed on 28 February 2018. Disbursements were at 99.03% of the planned budget and were used mainly for consultancy, knowledge sharing, and workshop expenditures. Conduct of Activities The TA consultants presented the outline of the five proposed technical reports to the executing and implementing agencies at an inception workshop in Shenyang, Liaoning Province in May 2017 to determine the relevant issues and knowledge gaps. The TA’s knowledge solutions have largely contributed to Liaoning’s better positioning as anchor of RCI with Korea, Mongolia and Russia through: conducting the RCI needs assessment; developing RCI priorities and models for Liaoning Province; and preparing its development strategy and implementation action plan. Firm implementation and communication strategies were established. Based on reviews of evidence, local and regional economic and policy assessments, and strategic analysis, five technical studies and one overall assessment were produced. TA research and stakeholders’ consultations were summarized in the TA concept note and inception and final reports, which included an overview of project activities, recommendations, achievements, and lessons learned. These were shared with the government and key stakeholders. A dissemination workshop in Shenyang conveyed the policy research findings and recommendations in five technical reports and the RCI development strategy synthesis to representatives of the executing and implementing agencies. TA consultants received valuable feedback on local perspectives and priorities. Technical study 1. One report identified infrastructure investment problems in Liaoning and recommended alternative ways of managing and financing infrastructure investments in the province. This included a detailed guideline of steps and measures to follow in developing successful public-private partnership projects. Technical study 2. A second report identified policy opportunities for supporting the international expansion of Liaoning’s equipment manufacturing industry. This study focused on the establishment of the Liaoning provincial free trade experimental zone