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Liu Baowei (second right), Party chief of Tonghua, visits Dongbao Group to see innovations in life science. Photos provided to China Daily
City in Jilin province benefits from surging companies
Li Yikui worked his way up from almost nothing to become a millionaire.
He owns a globally renowned healthcare company selling drugs to treat liver and brain ailments across the world.
With an initial investment of only 20,000 yuan ($3,238), Li turned Tonghua Dongbao Group from a small workshop into an industrial giant that boasts world-advanced production lines and research teams with strong innovative capacity.
Li is just one example of many private entrepreneurs who thrived from preferential policies in place for decades in Tonghua, Jilin province, where the private economy continues to surge.
Since 1990s, the Tonghua government has placed great importance on developing the city's private economy.
According to the city's Party chief Liu Baowei, the decision was "vital to realizing the goal of building a strong and wealthy city".
By last year, Tonghua had more than 7,860 private companies that generated 47.4 billion yuan, some 53 percent of the city's GDP.
They also paid 6.63 billion yuan in taxes, 62.5 percent of local fiscal revenue.
Before a complement to the State-owned economy, the private sector has become "a mainstay, a major source of fiscal revenue as well as an important channel for employment and entrepreneurship", said the Party chief.
To better utilize land resources and form industrial clusters, the local government has eyed the construction of industrial parks as a tool to promote healthy growth in private companies since 2008.
Thirty-five key industrial parks have been built in the city, covering an area of nearly 15 square kilometers.
Companies in the zones work in medicine, biotechnology, steel, machinery manufacturing, magnesium alloy, healthcare products, the green economy and cultural innovation.
The parks have also attracted many new investments over the years. In 2012, some 46 projects located in just one pharmaceutical area.
Two of the key operations are worth more than 1 billion yuan each, while 26 large projects are each worth more than 100 million yuan.
According to the local officials, construction of seven new industrial parks for wine and metallurgy was recently approved by the provincial Department of Industry and Information Technology to further strengthen the city's competitive sectors, including the wine and metallurgy industries.
Despite stable and rapid growth in the sector, innovation is now key to the city's overall development.
With that in mind, the Tonghua government cooperates with nine prestigious academic institutions including Tsinghua University to bring their academic achievements to meet corporate needs.
It has also carried out a three-year project since 2010 to tackle 10 major technological problems, commercialize 10 important scientific achievements and nurture 10 high-tech companies with international influence.
Last year, the government established the province's first academic workstation based in the local pharmaceutical high-tech zone.
Backed by strong technical support, many of the private companies boast a range of proprietary products.
Dongbao produced China's first and only brand of recombinant DNA human insulin with patented technologies in 1998, making China the world's third nation to have such technology.
Tonghua Petro-chemical Machinery Manufacture Co Ltd has made the list of China's top 50 in the field with its own advanced rig and oil production truck exported to the US and European countries.
Companies are also encouraged to extend their marketing strategies to foreign countries to compete with their overseas counterparts in international markets.
As well, nearly all the private companies now have modern corporate management systems.
Some were transformed from State-owned enterprises on the verge of bankruptcy at the time.
After reorganization as well as some M&A activities, Tonghua Shuang Long Chemical Co and Tonghua Wantong Pharmaceutical Co are among those that emerged.
Responding to local policies encouraging government officials to start private companies, Tonghua now has more than 1,090 government leaders who started a business. But the local government noted more talented managers and professional entrepreneurs should be hired from overseas and other Chinese cities to augment the many outstanding native entrepreneurs.
(China Daily 04/25/2013 page20)