The Communist Party of China (CPC) at the 16th National Congress
last November called for the country to support the rejuvenation of
the nation's old industrial base in the northeast.
The latest message of policy support comes from the Third Plenum
of the CPC Central Committee, held in early October, which proposed
to promote multiple forms of public ownership to improve the
socialist market economy. Making the shareholding system a main
form of public ownership will help ensure the reform and
rejuvenation of the once glorious region.
A key part of the northeast region with its rich endowment of
physical and human resources, Liaoning
Province will seize upon this historic opportunity to
revitalize its economy.
Since the late 1990s, the region has undergone active structural
adjustment of its industries to re-energize its economy. It had
lagged behind the prosperous eastern coastal regions, which
benefited greatly from the country's reform and opening up
drive.
Yet, Liaoning has been held back by such problems as slow
institution of market reforms; a waning of economic vitality; an
overstress on a single ownership structure with an excessive
concentration on state-owned enterprises; outdated equipment and
technologies; and a heavy social security burden.
But the province instituted a string of countermeasures to solve
these problems in the late 1990s.
The reform of the ailing state sector has been going soundly; a
complete new social security network is taking shape; and economic
restructuring has been progressing healthily.
Most of the large-scale state-owned enterprises have been
transformed into modernized companies with sound governance
structures. The annual sales volume of industrial companies in the
province hit more than 440 billion yuan (US$53.2 billion) by the
end of 1999, with total profits of more than 13 billion yuan
(US$1.6 billion).
Industrial restructuring saw non-state economic element take
over more than 50 percent of the economy by the beginning of 2000,
and the high-tech industry is booming.
By that time, the social security and medical care reforms
covered more than 6 million people. In the past two years, the
average gross domestic product growth rate has exceeded 9
percent.
All this has laid a solid foundation for the rejuvenation of the
region with the help of the central government's supportive
policies.
The province's own economic advantages are also helping in its
development.
Located in the southern area of northeast China, Liaoning is
ideally located for the development of trade and economic
cooperation with other countries and regions in northeastern
Asia.
The prospects for its trade and economic and technological
cooperation with the Republic of Korea, Japan and Russia and the
Democratic People's Republic of Korea are exceedingly rosy. Its
location guarantees that these adjoining areas will help boost its
economic development.
Liaoning's rich natural resources will greatly assist the
province in its drive to rejuvenate its industry. Moreover, its
enormous assets accumulated through time, its solid industrial
foundation, and the high educational level of its population, its
rich pool of technicians and advanced infrastructure will enable it
to catch up quickly.
Liaoning's industrial base is solid. It boasts a complete set of
industrial departments served by experienced technical workers and
technicians.
In terms of industrial completeness, Liaoning is one of the best
among all the provinces and regions of the country.
Many of its products are in dominant positions in the country's
domestic markets.
It has the best of those key industries vital in keeping the
country's industrial lifeline healthy, such as the petrochemical,
metallurgy, equipment manufacturing and military industries.
Its crude oil processing, iron and steel, light passenger car,
ship building, and digitally controlled machine tool industries are
renowned throughout the country.
It ranks high in many industrial categories. Its petrochemical
capacity, for example, is the third strongest in the country; its
crude oil processing ranks first in the country; and its
comprehensive metallurgical capacity ranks second in the
country.
Based on these advantages, the provincial government has
hammered out its policy orientation. It has decided to focus on the
establishment of two major bases -- a modern equipment
manufacturing base and a key raw material base and three pillar
industries, namely, the high-tech, agricultural byproduct
processing and modern service industries.
Local policy-makers should be aware that the rejuvenation drive
should be open and oriented towards both the domestic and
international markets.
The province should make good use of China's World Trade
Organization membership to create a set of open mechanisms that
conform with international practices. This will attract more
outside capital to invest in local projects.
The authors are researchers with the Party School of the
Communist Party of China's Liaoning Committee.
(China Daily November 17, 2003)