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Huge Fund to Polish Rusty Industrial Belt in Liaoning
Northeast China's Liaoning Province, which used to be China's biggest industrial center, Wednesday unveiled a 770 billion yuan plan to polish its rusty industrial belt in the next five years.
Zhang Tieming, vice-director of the Liaoning Provincial Development Planning Commission, said 177 major industrial and infrastructure projects will be launched as the top priority for the province in the five years until 2006.
Liaoning used to be the country's dominant heavy industrial center, ranking first in industrial output in China, but the aging industrial belt has been left far behind other coastal areas that took off economically during the past two decades.
The projects, involving communications, telecommunications, energy, automobiles and commercialization of high-tech achievements, are expected to cost over 300 billion yuan, nearly half of the total fixed asset investment planned for the province.
The huge sum of investment is aimed at achieving an economic takeoff during the five years, while in the past decade billions of fixed asset investment were used to improve the backward economic structure in the rusty industrial belt.
Zhang said that "a number of giant industrial projects and restructuring programs are also under consideration."
To improve market competitiveness, the province is considering merging Anshan Iron and Steel Co. the first of its kind in China, with three other iron and steel plants in the province to form one of the country's leading iron and steel producers. It will have a combined capacity of producing 10 million tons a year.
A plan to launch a 60 billion yuan ethene project is also under consideration, said the official.
The province, which used to be the country's dominant industrial center in past decades, accounted for about one third of China's total fixed asset investment during 1953-1957, all coming from government coffer.
As the planned economy is becoming a thing of the past in China, government investment in Liaoning is now only about 30 billion yuan, and it is to be used only for non-profit and public projects.
The figure represents less than five percent of the 770 billion investment, in sharp contrast with that of 1980s, when government investment accounted for up to 80 percent of fixed asset investment in the economically struggling province.
Zhang said all economic sectors, including the private sector, are being encouraged to invest in those projects, while the government will guide the investment through preferential policies and subsidized bank loans instead of direct intervention.
He added that the province plans to gradually open more sectors to overseas investment, and trial operations will be conducted to absorb overseas investment in commerce, foreign trade, tourism, construction and other sectors.
Restrictions on investment by private sectors will be gradually loosened and a number of investment projects will no longer require government approval, he said.
Foreign-funded hospitals and private-operated highways are likely to emerge in the coming years as China opens more sectors to overseas investment, he added.
Li Xuwen, chief of the Fixed Asset Investment Section of the Liaoning Provincial Statistic Bureau, said the scale of the fixed asset investment for 2001-2005 in the province remains at the same level as the previous five years.
Bo Xilai, governor of Liaoning, said he is optimistic about the plan.
The governor said the central government has listed Liaoning's outdated heavy industrial center as part of its priority targets for transformation and readjustment, and he promised more financial support and preferential measures for the province.
To absorb overseas and domestic investment, the province has recently launched its largest ever trade and investment promotion campaigns in Hong Kong and Nanchang, capital of Jiangxi province, east China.
Economists say the planned sum of fixed asset investment for the coming five years is very big, but some other provincial areas are more ambitious, citing Shanghai's one trillion yuan fixed asset investment plan for 2001-2005.
It is impossible for Liaoning to regain its lost glory as the country's biggest industrial center in the near future, but the aforementioned plan, if materialized, will help the province contain its decline in status in the national economy, they said.
During the past several years, China has moved to help outdated industrial centers, including Liaoning, get out of economic difficulty by readjusting their industrial structure, reforming, merging or even closing money-losing state-owned enterprises.
Millions of workers have been made redundant to improve competitiveness, while great efforts have been made to absorb overseas investment and boost high-tech industries.
Experts say China's upcoming entry into the World Trade Organization will usher in a new overseas investment boom in China, including areas like Liaoning.
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