Tapping potential of north-east China
BY KATHY FONG IN CHINA
AFTER more than a decade of rapid economic progress in the coastal and southern areas, the Chinese government has recently decided to shift its focus to the north-east region, apart from stepping up efforts to develop the inner part of the mainland.
The north-east region, which has been left out from the investment boom in China, is now the priority of the public development policy.
The new leadership intends to reinvigorate the old industrial base in the north-east of China where it was formerly an important heavy industries zone for the country.
Aircraft parts, shipbuilding, automobile and spare parts, and machinery are some heavy industries in north-east China.
China's first aircraft as well as movies were made there.
The revitalisation programme is one of the measures taken by the Chinese government to address the problem of increasing uneven development in China, where coastal cities are overwhelmed with skyscrapers, but 30 million people are living below poverty level in the countryside.
The north-east region is the homeland of the Manchus, an ethnic group who had conquered the mainland and established the Qing dynasty in 1644 that lasted until 1912.
Spring time in Shenyang City
It consists of three provinces – Liaoning, Jilin and Heilongjiang. It was formerly known as Manchuria, which borders North Korea and the Commonwealth of Independent States (CIS), the former Soviet Union.
The strategic location of the north-east region made it a gateway to North Korea and the CIS, which were another two large potential markets, said Harbin city mayor Shi Zhong Xin.
And the well-developed extensive transportation system, including modern ports and railways, could make the region a logistics hub, he added.
Liaoning province is one of China's wealthiest provinces in terms of per capita income.
The three Manchurian provinces have about 130 million people and include the major cities of Dalian (a famous fashion city in East Asia), Shenyang, Fushun, Changchun, Jilin, Qiqihar and Harbin. The combined urban population of these six cities is about 35 million.
Wen Jiabao, who became China's premier in March last year, has already made three trips to Liaoning province to send his message across to revive the old industrial base and also to encourage cultivating the natural resources there.
Besides attracting tourists through Harbin's well-known ice sculptures, north-east China offers lots of investment opportunities for business entrepreneurs to discover.
Shi said the restructuring of the hundreds of state-owned enterprises was part of the government's strategy to revitalise this old industrial base.
The government welcomed private ownership of the state-owned enterprises, he told Malaysian journalists who had joined in the trip organised by the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM) to north-east China.
A new couple in traditional Manchu costumes at a mass wedding in Shenyang - APpic
“We encourage foreign participation in the restructuring of our state-owned enterprises,'' said Changchun city mayor Zhu Yejing when met by the delegation from ACCCIM.
The north-east region is expected to be the next engine of growth for the Chinese economy as the expansion in the coastal area approaches the peak.
In fact, some well-developed areas in China, where most foreign investments are concentrated, have hit bottlenecks. The existing infrastructures are not able to cope up with escalating demand.
Manufacturing plants in certain large industrial zones, such as Zhejiang, need to shut down for three days every week due to power shortage.
However, this is unlikely to happen in north-east region, at least in the near future, because there is unutilised power generation capacity and ample supply of coal to produce electricity and heat. There is also a large oil reserve.
Dalian vice-mayor Xing Liang Zhong said the north-east region was still an untapped market, hence, the room for growth was considerably larger than elsewhere.
Xing noted that an advantage of setting up an investment base in the north-east region was cheaper costs (labour and electricity) compared with other parts of China, where inflationary pressure was rising.
Furthermore, there is a large pool of skilled labour – graduates from 20 universities – available in the region, according to Xing.
North-east China is an ideal place for the development of resource-based industries like timber extraction, petrochemicals and pharmaceuticals, with the plentiful natural resources such as crude oil, coal, forest reserve and Chinese herbs there.
Agriculture is also an important economic activity in north-east China. Agricultural crops grow well on its fertile black soil, which is only found in this part of China.
Daqing in Heilongjang is China’s largest producer of on-shore oil and both the other provinces have oil deposits.
Changchun, Jilin province, is China's major automobile industry base. German carmaker Volkswagen and BMW, as well as Japan's Toyota Motor, all have manufacturing plants in the north-east region.
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