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The three northeastern provinces of Heilongjiang, Jilin and Liaoning have reported growing inflow of foreign funds since the Chinese government launched a strategy of revitalizing these major but rusty industrial bases over a year ago.
Jilin province, where China's first automobile maker -- the No.1 Automobile Works (FAW) Factory -- is located, drew 1.19 billion US dollars in contractual foreign investment in the first 10 months this year, a year on year rise of 167.7 percent, according to Li Jieche, vice-chairman of the Standing Committee of the Jilin Provincial People's Congress.
Shenyang, capital of Liaoning province, brought in 1.47 billion US dollars in foreign investment in the January-October period this year, up 52.9 percent over last year's same period, according to the city government statistical bureau. The used amount of foreign funds by Liaoning in the first 10 months rose by 90 percent year on year.
The inflow of overseas investment to the three northeastern provinces amounted to a record high of 3.4 billion US dollars in the first six months of the year, a year on year rise of 72 percent, according to the Office for Revitalizing the Old Industrial Base in Northeast China under the State Council, or the Chinese central government.
Foreign funds mainly go to such sectors as equipment manufacturing, raw materials, chemicals, electromechanical products, modern agriculture, high tech and automobiles.
Lu Song, a research fellow with the Development and Research Center with the Liaoning Provincial Government, said that factors such as the new round of industrial structural adjustment and upgrading in the country, the strategy of the central Chinese government to rejuvenate the area and an improved investment environment have all contributed to the region's fast growth, which caught the attention of an increasing number of foreign investors.
After the founding of New China in 1949, the northeast region contributed the country's first steel, machine tools, locomotives and planes, and is still seen as having numerous advantages in these sectors. Many of the traditional industrial companies have become less competitive, however, and some have been losing money over the past two decades, as China has shifted from a planned economy towards its reform and opening-up policies.
China launched a strategy to revive the northeast industrial rusty belt last year, aiming to turn the region into the new growth area of the national economy.
As part of their effort to draw more foreign funds, Heilongjiang and Liaoning provinces made 2004 the "year of improving investment environment" and the "year of investment and construction." Jilin has worked out measures for attracting foreign funds, such as foreign investors are encouraged to take part in the reform and retooling of state-owned firms by taking over or buying into state-owned firms.
Wang Min, acting governor of Jilin, said his province has set it a target to revitalize through development of new industries, education and science and ecological improvement. "We hope to turn Jilin into a new-type industrial base of China by 2010 or a little bit after that."
Zhang Wenyue, governor of Liaoning, noted his province has set to maintain sustainable economic development and strive for a per capita GDP of 3,000 US dollars by 2010.
Governor Zhang Zuoji of Heilongjiang said, "We'll join Jilin and Liaoning in turning the northeast region into a new economic growth area of China following the Yangtze River Delta, the Pearl River Delta and the Bohai Rim."
(China Daily December 15, 2004)
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