China reviving ‘rust belt’
BEIJING: China is trying to revive its downtrodden “rust belt” in the north-east with a “blood transfusion” of around US$7.4bil,backed by a new bank, state media reported.
The north-eastern provinces, home to 110 million people, were once the crown jewel of industry under China's centrally planned economy. But market reforms begun in the late 1970s have resulted in the collapse of state firms in the region, leading to mountains of bad loans at state banks that had lent heavily according to government directives.
Half of the 100 projects planned for the region would be in one province, Liaoning, which needed about 44.2 billion yuan (US$5.3bil), the China Daily reported.
About 11.2 billion yuan would also be invested in 37 projects in Heilongjiang province and six billion yuan in 11 projects in Jilin province.
A spokesman for the State Development and Reform Commission said that the super-ministry would make an announcement on the new projects “in the near future”, but declined to give details.
Xu Hongyuan, an economist at the State Information Centre, said the central government was likely to pump about 10 billion yuan into the projects, with the rest coming from local governments, banks and even foreign investors.
A new Northeast Bank, partly private owned, would be set up with a capital of five billion yuan to finance the revitalisation programme, the Economic Daily reported. Both the central government and the three provincial governments would put in cash, it said.
The northern city of Tianjin had also won regulatory approval to set up a new bank – Bohai Bank – to help boost its economy, a spokesman for the China Banking Regulatory Commission said.
The government had also announced steps to overhaul thousands of shaky rural credit cooperatives to help hard-pressed farmers, the Economic Daily said.
Some 30 rural commercial banks would be set up by merging the existing credit cooperatives to help shore up the inefficient financial system in the countryside, the report said. – Reuters
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