Jilin province: Trains, corn and cars

Trains from CNR Changchun Railway Vehicles Co on exhibition at the Changchun International Conference and Exhibition Center. CFP

With abundant golden corn and nearly one million automobiles rolling out of its factories each year, Northeast China's Jilin province has long been known as the nation's grain warehouse and a backbone of heavy industry.

For 60 years, its development has been based on those pillars, which continue to support it even through the recent heavy turmoil of the worldwide economic crisis.

The province has not escaped the global economic downturn, but it has weathered the storm relatively well, registering 9.1 percent growth in GDP in the first quarter of 2009, but a marked slowdown from the 16.5 percent growth a year ago.

Jilin industries such as auto and steel making, as well as petrochemicals, have lost some of their previous steam. In the first three months, industrial output of the province totaled 57.5 billion yuan, rising 10.1 percent year-on-year, but well down from the 23.1 percent growth recorded in the same period of 2008.

Songyuan, an emerging economic powerhouse in western Jilin, has taken a hard hit from the global economic slowdown. With confirmed crude reserves of 1.3 billion tons, the city is heavily reliant on the oil industry, which contributes about 60 percent of the region's total GDP.

As oil prices went into a freefall from a record $147 a barrel last summer to as low as $32 this year, the region made plans to trim 840,000 tons in oil production, which will reduce its total fiscal revenues by 1 billion yuan this year.

In the wake of a 4 trillion yuan stimulus package approved by the central government, Jilin plans to jumpstart a number of projects to fight the downturn.

"Investment is the engine for this traditional industrial base," said provincial governor Han Changfu. The province plans to spend about 400 billion yuan to improve railroads, expressways, airports, agricultural irrigation, power generation, environmental projects and other public facilities this year.

It has built a strategic partnership with Bank of China and signed cooperation agreements with China Development Bank to help finance the projects. A total of 720 billion yuan is planned to spur economic growth in 2009.

"These projects will not only prop up the economy amid the global downturn but are also in line with Jilin's long-term development blueprint," Han said.

Boon to grain production

As a major growing area, Jilin produced 29.3 million tons of grain in 2008 and aims to increase 5 million tons in the next five years to become fifth-biggest grain growing province following Henan, Shandong, Jiangsu and Heilongjiang.

The province boasts all the makings of an agricultural powerhouse. With adequate sunshine and rain as well as fertile soil, Jilin - along with the United States and the Ukraine - is one of the three top golden corn belts in the world.

But a shortage of water is restraining agricultural expansion. According to the Jilin Agricultural Development Commission, only 40 percent of the 3.3 million hectares of land in the province are drought resistant. Less than 10 percent is irrigated using water-conservation systems.

The Hadashan irrigation project funded by the giant government-led stimulus package was launched late last year in southeast Songyuan to help ease the strain.

"Requiring a total investment of 3.63 billion yuan, the project has received 250 million yuan from the country's 4 trillion yuan stimulus package thus far and is projected to irrigate about 190,000 hectares of land," said Lu Gang, deputy manager of the project engineering company.

Lan Jun, party secretary of Songyuan city, said the water works will not only help spur economic growth in the short term, but also enable a 20 percent increase grain output by improving low-yield farmland.

Windfall profit

Few companies are faring well in the global slowdown, let alone making a handsome profit, but CNR Changchun Railway Vehicles Co is one such exception.

Second in stature in Jilin province only to First Automobile Works, it is a true beneficiary of China's massive stimulus packages as big orders for train cars roll in to meet needs in rail infrastructure expansion.

The company now produces 50 percent of the nation's train cars and 80 percent of its intra-city train cars, which have been used in eight of the 10 subway projects across China.

The train manufacturer is now in full gear to finish 30 contracts it recently signed, which include 40 high-speed trains with a cruising speed of 350 km per hour for the Beijing-Shanghai line to be launched in 2011, 204 top-tier subway carriages for Saudi Arabia and orders from Hong Kong and Australia.

To meet the mounting demand, the company has spent 2.5 billion yuan on a manufacturing center at the Railway Transportation Equipment Manufacturing Industrial Park in Changchun, the largest R&D, production and export center for trains cars and subway carriages nationwide.

The facility is scheduled for completion in June 2010, when it will be able to produce 500 ordinary passenger train cars, 800 high-speed train cars that can travel at more than 200 km an hour and 800 intra-city train cars for trains with speeds of 120 km an hour.

"About 80 percent of the technologies in our products are based on the company's independent R&D capability, and we obtain continuing technological support through partnering with the world's premier train manufacturers," said Wang Shibin, deputy party secretary of the company.

(China Daily 06/15/2009 page10)