Among today's top 500 private enterprises in the Chinese mainland, only a tiny proportion is based in the Northeast... This is a reflection of the relatively weak economic vitality in the region. So how can the private sector help revitalize the once-industrious heartland? 

From the looks of the rusty equipment and shabby production plants, it's hard to guess that the state-owned zinc factory in Huludao of Liaoning province was once the largest of its kind in Asia; 2 years ago it was on the verge of bankruptcy.

"When we first took a stake in the zinc factory, we were shocked to see the actual state of the factory: you couldn't find a single window which wasn't broken," said Yu Hong, Chairman of Huludao Hongyue Group.

After the acquisition, Yu Hong's company holds the largest stake in the Zinc factory. For the first time, the future of the state-owned enterprise and its some 7,000 employees were in the hands of a private enterprise.

"The first thing we did was to improve operational efficiency: I called a meeting in the purchasing department and urged them to promote accountability and transparency in procurement. We have no tolerance for corruption and lackadaisical attitude," Yu said.

Efforts to remove the state from day-to-day control, introduce market economy and strengthen the role of shareholders are making progress.

"I strongly suggest to promote mixed ownership and encourage private capital's participation in SOE reform, especially in a region like the Northeast where the legacy of a planned economy is strong. Because the private sector's development is in line with market rules," Yu said.

The transformation of the Zinc factory tells us that by embracing private capital's participation in SOEs, it can greatly allow for transfer of technology and managerial expertise, hence improve the overall market competitiveness.