Government to revive the northeast´s economy

cctv.com 03-07-2004 15:26

The northeast of China was once the country's economic engine. However in recent years, it has lagged behind the country's coastal areas in terms of development. This has prompted the government to initiate a plan to revive the region.

The northeast, consisting of the three provinces of Heilongjiang, Jilin and Liaoning, was once the region of wealth and opportunity during the first 30 years of the People's Republic.

But in the early 1980s, this once mighty economic engine started to stall.

In analyzing how it all went wrong, structural weaknesses account for much of the decline.

Though the businesses in the region managed to function in a planned economy, problems started to crop up when the economy became more market oriented. The low efficiency rate and ill-defined product structure, caused them to fall behind their market-oriented competitors. Factories deep in debt were forced to close and workers were laid off by thousands, creating a social security nightmare for the businesses.

To reverse the northeast's decline, China's central government launched a fresh initiative last October.

Prof. Li Qiang from Humanities & Social Sciences Dept. of Tsinghua University, said, "New points of growth must be cultivated if the economy of the northeast is to be revived. To do this, the region should make full use of its existing competitiveness. For instance, it has the best foundation for heavy industry. Sectors such as heavy machinery, petrochemicals and car manufacturing should be considered."

But questions remain about actual reform efforts. Should the highly concentrated state sector give way to non-state capital and overseas investment, or should ways be devised to revive the public sector?

Wang Xiaoguang, senior research fellow of State Development and Reform Commission, said, "It's important to reform the existing state structure, for example, by way of changing them into share-holding businesses. But more importantly, non-state firms and overseas investment should be encouraged, especially in sectors that favor competition. Combining state assets with non-state and overseas investment should also be looked into."

Many areas in the northeast have already started to experiment with new forms of ownership. But 50-year-old state structures and habits are hard to break. Nevertheless, investors from southern China and outside the country are beginning to look at the possibilities in the northeast.

It's been almost half a year since the central government announced its plan to revive the northeast. Since then, the consensus seems to be that, with the right approach, it can definitely work.

Editor:Zhang  Source:CCTV.com