Projects to boost Northeast China get the nod
( 2003-10-31 10:22) (China Daily HK Edition)
The first batch of 100 projects aimed at boosting development of Northeast China has been approved by the National Development and Reform Commission.
The total investment in the projects could reach 61 billion yuan (US$7.3 billion), according to a report by China Central Television.
Liaoning Province, a traditional heavy-industry hub, will have the lion's share of 52 projects entailing investment of 44 billion yuan (US$5.3 billion), 72.5 per cent of the total.
Most of the projects are in manufacture of equipment and processing of raw materials and agricultural products.
Many are to be launched by pillar enterprises in the region, such as the three big shipbuilding companies, Dalian Petrochemical Group, Liaoning Petrochemical Group, Benxi Iron & Steel Corp, and Anshan Iron & Steel Corp.
The coastal city of Dalian alone gets 17 projects, compared with about 20 won by Heilongjiang and Jilin provinces.
"We gave priority to the petrochemical and ship-building industries," said an official with the Dalian municipal development and planning commission.
"Construction on most of the projects will start before the end of this year; and work has already begun on some," he said, adding that all the projects will be completed in three years.
Capital to be poured into the projects will include loans from banks, money raised by the companies themselves and foreign investment. Most of the projects will enjoy preferential treatment such as discounted interest rate on bank loans.
Sources say the second batch of projects in Northeast China will be approved before the end of next month.
The central government proposed rejuvenating Northeast China in August during Premier Wen Jiabao's inspection tour in the region.
Wen said that the central government would support the three provinces in their efforts to readjust the economic structure and upgrade technology.
By doing so, China aims to build the northeast region into a national and even a world-class industrial base for equipment manufacturing and raw-material processing.
However, experts cautioned that a wave of government-led investment fever must be avoided to prevent possible redundant construction.
Lin Yifu, director of Peking University's China Economic Research Centre, said that local governments should not encourage enterprises to expand blindly; there should be selective investment according to market demand.
Lin said the government should play a role in creating and protecting a fair competitive environment to provide development room for well-performing enterprises.
Moreover, the region cannot rely only on central government investment and preferential policies, said Lin Muxi, director of the economic management college at Liaoning University.
More private and foreign investment must be introduced to reduce the share of State ownership in the local economy, Lin said.
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