Liaoning reiterates its commitment to service industry

Liaoning province, a major heavy industry base and the largest economy in China's northeastern provinces, is using the service industry as a new growth engine to fuel its economic development.

The provincial government mapped out a four-year development blueprint to develop its service industry, with a goal to double the industry output to 800 billion yuan and create 10 million jobs for local residents by 2012.

It will earmark 200 million yuan each year to facilitate the service industry development and provide subsidies and bank loans with rate discounts for small and medium-sized enterprises in service sector.

In recent years, the service industry has become an important employment channel and source of fiscal income for Liaoning. In 2007, Liaoning's output registered an annualized growth rate of 10.3 percent to reach more than 400 billion yuan, which accounted for 36.6 percent of its total GDP.

It also absorbed 619,000 people, or 50.5 percent of the 122.4 million labor force in the province, with retailing, catering, tourism, housekeeping and community service as the leading service sectors.

For a province that used to have 1.8 million unemployed who were laid off from the state owned enterprises in the mid-1990s, the service industry is of great significance.

In 2007, Liaoning joined the country's club of most wealthy provinces, as its GDP grew 14.5 percent year-on-year to hit 1.09 trillion yuan, which means its GDP per capita has surpassed $3,000.

Drawing the development experience of the advanced economies, such as the United States, Japan and South Korea, if GDP per capita reached such a level, the tertiary sector would rise to be an important driving force for economic growth.

However, as a traditional industrial base, Liaoning's economic growth was largely driven by heavy industries, such as mining, equipment manufacturing as well as building construction, while the tertiary sector was growing at a slower pace than the average regional GDP growth of 15 percent.

As the hard-hit heavy industry in Liaoning cut back production due to the economic slowdown, the service industry is facing a golden chance to speed up its development at a time when the province is seeking a more balanced way of economic development.

In the next four years, Liaoning plans to develop 15 service industry clusters in the area surrounding the provincial capital Shenyang, the coastal area led by Dalian as well as the northwestern region, focusing on the development of science and technology-based service industries.

It will encourage the science and technology-based service providers to set up their companies, especially those who specialize in technological innovation, industrial design, energy efficiency and environmental protection.

In this process, Dalian, the most advanced industrial base in the coastal region of Liaoning province, will consolidate its position as a financial, logistic, exhibition, software and information service center in northeastern China. Statistics showed that tertiary industry, taking 44.6 percent of the total GDP, have surpassed the secondary industry becoming the city's top driving force for economic growth in 2007.

The plan also stated that the province would develop modern logistics into one of its pillar industries within the next few years. A centerpiece of this plan is to set up a Northeast Asia international logistical center in the middle part of its territory, which takes a total area of 50 sq km.

As part of the project, Shenyang will establish a free trade zone, which will become an inland custom clearance base for the ports in Dalian, Yingkou and Jinzhou.

By 2012, with its annual throughput reaching 50 million tons, the logistical center is expected to attract some 100 companies to settle in the region and create 52,000 jobs for local residents.

Moreover, the tourism and exhibition sectors also have strong momentum for growth. In 2007, Liaoning's tourism industry posted total revenue of 103.7 billion yuan, which ranked the eighth place nationwide.

During the same year, exhibition industry earned more than 150 billion yuan, with the Shenyang equipment manufacturing exhibition, Dalian International Fashion Festival and Dandong Yalujiang Tourism Festival growing into well-known exhibition activities.

(China Daily 01/19/2009 page10)