China's old industrial base eyes bright future with ambitious plan

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Last updated at: (Beijing Time) Friday, January 09, 2004

China's old industrial base eyes bright future with ambitious plan

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The three northeastern provinces of Heilongjiang, Jilin and Liaoning have formulated plans to rejuvenate this traditional industrial base, according to the governors of the three provinces here Thursday.

Their plans include regrouping existing industrial enterprises,bringing in advanced technologies, boosting research and development of new products, and opening the doors of state-owned industrial enterprises to private investment from both at home and abroad.

"Our goal is to turn Liaoning into China's major equipment manufacturing base and raw and semi-finished materials industrial base," said Bo Xilai, governor of Liaoning, at a press conference.

"Special efforts will be made to develop three major industries-- high and new technology, farm produce processing and modern services," he said.

Hong Hu, governor of Jilin, said that Jilin's aim is to build the province into one of the major updated industrial bases of the country by 2010.

In August 2003, China's central government drew up a strategy to resuscitate the old industrial base in the three northeastern provinces, aiming to build the northeast region into a national --and even world-class -- industrial base for equipment manufacturing and the extraction of important raw materials.

The revitalization program is expected to make the northeastern region a new economic growth area, following the flourishing Pearl River Delta in the south and the Yangtze River Delta in the east.

The three provinces have a total population of 108 million and cover an area of 789,000 square kilometers, Dubbed the "industrial cradle of New China," the region played a major role in the early industrial development of China.

The central government launched 150 state key heavy industrial projects during the first few years after the founding of New China in 1949, one-third of which were built in this region. These projects were in the fields of iron and steel, chemicals, heavy machinery, automobiles and defense.

However, many of the traditional industrial enterprises that were established in the 1950s when China practiced a planned economy system, became less competitive, and some have been losingmoney over the past 20 years when the policies of reform and opening-up were implemented for the development of a market economy.

As a consequence, the proportion of the region's industrial output value to the national total dropped to 9 percent from the former 17 percent. Some loss-making state industrial enterprises were closed.

To fully rejuvenate this declining industrial base, the central government has worked out preferential policies and offers financial support for industrial rejuvenation in the region, such as lightening the tax burden on mining enterprises and offering support in the aspect of social security.

"These polices will bring golden opportunities for better gainsfor investors from both at home and abroad," said Zhang Zuoji, governor of Heilongjiang.

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