State-owned industrial enterprises (SOEs) in northeast China are expected to purchase a large number of digitally-controlled machine tools to upgrade their production capacity.

The purchases are a key part of the country's strategy to vigorously develop its industrial manufacturing base.

The National Development and Reform Commission has outlined 100 projects worth 61 billion yuan (US$7.4 billion)as the first step in modernizing the manufacturing base of the area to modernize the manufacturing base.

"About 70 percent of the investment is expected to be used to buy digital machine tools, key equipment for these SOEs," said Yu Chengting, president and chief executive officer of China Machine Tool & Tool Builders' Association.

"Northeastern SOEs are in urgent need of the sophisticated digitally-controlled machine tools to replace their old equipment," Yu said.

The association has investigated the old industrial base to help these enterprises find locally-made products suitable for their technical transformation, he said.

"Some enterprises will consider using Chinese machines to replace imports," he said.

China imported US$5.96 billion worth of machine tools last year while its exports were only US$1.28 billion.

Yu told China Daily the association has presented proposals for State approval to develop high-grade machine tools in conjunction with domestic and overseas universities, research institutes and companies.

Investors from Japan, Germany, the United States, South Korea and some European countries are seeking opportunities to co-operate with Chinese companies, he said.

China's digital machine tools have entered a fast-growing phase because of the country's strong support for the industry in recent years.

But insiders say the industry is developing in an unbalanced way, with some products attaining world class and some still lagging.

"Overall, China's machine tool industry is 10 years behind its advanced overseas counterparts. It can catch up with them in a decade if it continues developing as it does today," Yu said.

(China Daily April 14, 2004)