Economy

NE industrial bases may face multiple challenges

(Xinhua)
Updated: 2010-07-05 11:51

Also, a lack of innovative ability will be another challenge for the three provinces.

The three northeast provinces have, perhaps, the best infrastructure around the country for heavy industries thanks to the central government's industrial distribution and arrangement after the founding of the People's Republic of China in 1949.

The First Automobile Works and other flagship state-run enterprises in energy, ship and equipment manufacturing have realized more than 95 percent for a percentage of their product's home-made components.

But just for the remaining 5 percent of their product's components, and also the key components that contain core technologies, they did not master these skills and needed to import them.

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The three provinces are rich in land, energy and other natural resources. However, they brought in too many manufacturing industries that had been abandoned by foreign countries due to their high-energy consumption and high pollution risks.

Some local governments in the northeast provinces sacrificed their environment for attracting foreign investment to pursue GDP growth, which would not only hinder industrial upgrades and economic shifts, but also bring new risks and difficulties, Lin said.

The professor said one more challenge for the three provinces is that the governments need to further break the influence and constraint of their old planned economic systems.

"The government officials in the three provinces have not fully realized the significance of innovation in their institutions and policies for economic development, and that may become the biggest challenge for them," Lin said.