News

Time for some economic restructuring

By Zhang Zhao (China Daily)
Updated: 2011-03-05 07:48

Specialists from the Heilongjiang Agriculture and Reclamation Bureau taking a close look at a rice paddy. The province has begun pushing to modernize its agricultural production. Liu Daxin / For China Daily

For decades, Heilongjiang province has focused on resources and materials like coal, crude oil, and cement, but now its government wants to modernize the economic structure.

In 2010, the province had a GDP of 1.02 trillion yuan ($155.6 billion), an increase of 12.6 percent over 2009's figure, and 75.6 percent higher than the one five years ago.

But, Wang Xiankui, the governor, has said that their short industrial chains mean low industry profits.

"So, we need a major reform in the economic structure for faster, sounder development. And we're planning a series of key projects."

For one thing, the province will improve traditional industries like farm product processing, chemicals, mining and forestry.

They believe they can make food processing more intensive so that it can have annual sales worth more than 160 billion yuan ($24.4 billion) by year's end.

The provincial government is planning a number of industrial clusters for oil refineries, coal chemicals processing, and bio-fuels, with annual sales estimated at as much as 183 billion yuan.

Mining is expected to add another 100 billion yuan, by developing a number of large mines for copper, gold, lead, zinc, graphite and marble.

Its forestry products processing is also being improved, especially for wood, herbal medicines, and fruits, with annual GDP expected to reach 94 billion yuan this year.

At the same time, the provincial government will keep an eye on emerging sectors with a strategic importance, in things like new materials, new energy, bio-pharmaceutical products, and modern equipment and vehicles.

Key sectors include nuclear and wind power, vaccines, high-powered engines, small aircraft, and high-speed cargo trains.

One other new growth area is the service sector, which includes tourism and finance.

With that in mind, the government is encouraging banks and other financial institutions to expand into the countryside, and to offer small loans.

Some companies are looking at getting listed this year.

The province will build around 50 large wholesale markets over the next five years. Harbin and Daqing will be pilot cities in the area of service outsourcing, according to government plans.

Heilongjiang is located in a cold part of China so, naturally, it sees ice and snow-related industries as a major cultural calling card. But, it expects to give prominence to other cultural areas like mass media, animation and cinema as well.

"The private sector has long been a weak spot in our economy," said the governor. "But there's great potential in that sector and it will become a major force behind our economic growth."

The government plans to build "bases" to encourage locals to start their own business. Many emerging industrial sectors will be open to private companies, and small and medium-sized enterprises will be given greater chances.

(China Daily 03/05/2011 page6)