Q: Following the strategy of developing China's western
areas, the government put forward a national plan to revitalize old
industrial bases in the Northeast of the country. What are the
considerations behind the plan? What is the relationship between
revitalization of the Northeast and the development China's western
areas? What kinds of policy and finical support has the central
government provided to the Northeast?
A: The old industrial bases in the Northeast were the cradles of
new China's industry. They have made historic contributions to the
construction of an independent and integrated industrial and
economic system as well as to the country's reforms and
modernization drive.
At present, the Northeast Region produces two fifths of China's
crude oil, 50 percent of its timber, one third of its ships and one
quarter of its vehicles. However, during the process of
transforming the country from a planned economy to a market economy
in the past 20-plus years, the three provinces of Liaoning, Jilin
and Heilongjiang in the region have develop0ed at a relatively low
speed.
System and structural defects originated from the panned economy
have become more striking. As a result, their industrial production
has slipped into extreme difficulties, with low efficiency and high
unemployment rate, which, coupled with the policy the central
government implemented in the 1980s to first develop eastern areas,
have created a widening economic gap between them and the eastern
areas.
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In 2000, the central government initiated the strategy of
developing the western areas. In 2004, it put forward the strategy
of revitalizing old industrial bases in northeast China. In the
overall national economic development, each of the three-pronged
strategies has its own emphasis and complements to each other.
Since the northeast has been a fund-and-technology-intensive
heavy industrial base, it has its own advantages. The main tasks of
revitalizing the old industrial bases in the northeast, therefore,
are as follows: continuing to readjust economic structures;
encouraging technological renovation of enterprises; creating more
employment and establishing a social security system; speeding up
the development education; promoting reforms and opening up; and
realizing comprehensive, coordinated ad sustained
development.
?
In order to facilitate the development of the Northeast, central
government has lowered resource tax rate in northeastern areas,
reduced the value-added tax on newly purchased machines and
facilities, and exempted some enterprises of the income tax. A the
same time, the central government has allocated special funds to
support the region's agriculture, social security, education,
technology, sanitation, culture, environmental protection.
The central government has allocated a total of 108.9 billion
yuan (US$13.15 billion) to support structure readjustments of 297
enterprises.
In just over one year after the introduction of the strategy,
the speed of the region's economic growth has accelerated and
economic retunes have improved. In 2004, the GDP of the three
provinces reached 1,513.39 billion yuan (US$182.78 billion, up 12.3
percent from 2003.
The growth rate was 2.8 percentage points higher than the
national average. Per capita annual net income of farmers increased
16.7 percent in the same year. Foreign investment in the three
provinces reached US$5.94 billion. Although the number was lower
compared with coastal provinces, it represented an increase of 83.6
percent over 2003, much higher than the national average.
?
Still, structural and systemic problems, such as employment
problems, are continuing to hold back the development of northeast
China's economy and have not been solved. There is a long way to go
in revitalizing the old industrial bases in northeast China.