China sets four major tasks to revitalize industrial rustbelt

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Last updated at: (Beijing Time) Wednesday, March 24, 2004

China sets four major tasks to revitalize industrial rustbelt

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Meeting on reinvigorating the old industrial bases

Chinese Premier Wen Jiabao Tuesday unveiled this year's four major tasks for reinvigorating industrial rustbelts, promising more efforts to restructure State firms, promote the non-State sector, optimize industrial mix, and absorb more domestic and overseas investment.

Addressing the first plenary session of the central government's Leading Group of Revitalizing the Northeast Region and other Old Industrial Bases, the premier said those old industrial bases should speed up institutional innovation and reform, which is the fundamental way to their revitalization.

The premier explained that reform of the State-owned assets management system and State-owned firms must be deepened to increase their economic vitality, and efforts should be made to promote the economy of mixed ownership and non-State-owned sector of the economy.

Wen, also head of the group, described optimizing and technological upgrading of existing industrial mix as the main task to revitalize the once influential industrial bases.

The old industrial bases should continue to develop their sectors which are well adapted and pillar industrial sectors, and strive to boost modern agriculture and consolidate its position as one of the country's major grain producers and suppliers, said the premier.

He said the old industrial bases should continue to open their economy to other parts of the country and overseas, which the premier described as an important way to revitalize those regions.

Wen also called on governments in those areas to expand employment and provide better social security coverage.

It is essential to transform the mode of economic growth and prevent blind investment and duplication of construction projects involving low-level technologies.

Among those attending the session were leading members of the group, including Vice-Premier Zeng Peiyan, and leading officials from Liaoning, Jilin and Heilongjiang provinces, northeast China.

China launched its strategy to reinvigorate the traditional industrial centers in the three northeast provinces and other parts of the country, in a bid to turn rustbelts into modern industrial zones, making them new and important growth areas of the national economy.

China considers the revival of the northeast industrial base as the third most important long-term strategy after the opening-up in the southeast 20 years ago and the western development policy five years ago.

Covering the provinces of Heilongjiang, Jilin and Liaoning, the northeast region played a major role in the industrial development of China.

The northeast contributed China's first batch of steel, machine tools, locomotives and planes after the founding of New China in 1949, and still has potential in these fields.

The central government launched 150 State key heavy industrial projects during the first several 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 industries.

However, many of the traditional industrial enterprises that were established in the 1950s when China adopted a planned economic system, became less competitive and some have been losing money over the past 20 years, during which time China implemented the policies of reform and opening up to the outside world, and moved from a planned economy toward a market economy.

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, resulting in mass unemployment.

Premier Wen said last year China aims to build the northeast region into a national and even a world-class industrial base for equipment manufacturing and important raw materials.

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