By Zhao Huanxin (China Daily)
Updated: 2007-08-21 07:07

Private and foreign ventures are being encouraged to play a major role in the revitalization of Northeast China, the country's old industrial base, a high-ranking official said yesterday.

"The Northeast must rely on reform and further opening up to ensure its rejuvenation," Zhang Guobao, vice-minister of the National Development and Reform Commission said.

A blueprint for the Northeast revitalization program, which was initiated in 2003, was formally released at a press conference held by the State Council Information Office yesterday.

The proportion of State-owned businesses in the region is "way too high", Zhang, who is also chief of the office for the revitalization of Northeast China under the State Council, said.

For example, according to the blueprint, in 2005, the added value produced by the non-public sector in the Northeast was just 36 percent of the total, much lower than in other regions, Zhang said.

Under the revitalization plan, the rate is predicted to rise to 48 percent by 2010.

"People have joked that the Northeast was the first region to be brought under a planned economy, but the last to exit," Zhang told the press conference.

The policy document, approved by the central government earlier this month, promises to rebuild the Northeast as a "key economy with high level, comprehensive development".

It encourages foreign and private investors to participate in the transformation of State-owned enterprises, many of which are struggling to survive in a market economy.

In particular, private capital will be granted the same tax exemptions, land use and loan policies as the State firms being restructured, the blueprint says, without specifying favorable treatment for foreign investors.

Hi-tech industries, equipment manufacturing, modern agriculture, infrastructure and environmental protection are listed as the priority areas for foreign investment.

But foreign firms will not be allowed to invest in sectors that guzzle energy and spew out pollution, the document said.

It says overseas financial institutions are also welcome to set up branches in Northeast China.

As the region shares a long border with Russia, cooperation with Moscow figures large for the revitalization of the region, Zhang said, adding that a Sino-Russia crude oil pipeline project is nearing the implementation stage.

The northeastern region defined in the document includes Liaoning, Jilin and Heilongjiang provinces, and the eastern part of the Inner Mongolia Autonomous Region.

The country's old industrial base stretches 1.45 million sq km and is inhabited by 120 million people, almost 10 percent of the total population.

Under the blueprint, the region will be developed into a major powerhouse for economic growth, an internationally competitive manufacturing hub, a national source of raw materials and energy, and an important base for grain and farm produce.

(China Daily 08/21/2007 page3)