Chinese Premier Wen Jiabao on Wednesday presided over an executive meeting of the central government to decide ways to revitalize the traditional industrial centers in northeast China and other parts of the country.

According to the decision formulated at the meeting, it is the right time for China to turn those rusty industrial centers into modern industrial ones, making them new and important growth areas of the national economy.

The meeting decided on six principles guiding the revitalization of the industrial centers, such as promoting upgrading through reform and opening to the outside world, giving full play to the role of governments in the process while continuing to rely on the market mechanism, and taking the road of a new type of industrialization to improve the industrial mix.

The principles also include coordinated development in the regions involved and encouraging the regions to rely on themselves for development while the central government will offer necessary assistance.

Tasks and polices and measures regarding revitalizing the centers were also discussed at the meeting, which described the revitalization of the centers as a long-term strategic task that requires the arrangement of the central and local governments to ensure smooth implementation of the strategy.

The revival of the northeast industrial base is the third most important long-term strategy after the opening-up in the southeast 20 years ago and the western development policy five years ago.

Covering the provinces of Heilongjiang, Jilin and Liaoning, the northeast region played a major role in the industrial development of China.

The northeast contributed China's first batch of steel, machine tools, locomotives and planes after the founding of the New China in 1949, and still has potential in these fields.

The central government launched 150 State key heavy industrial projects during the first several years after the founding of the New China in 1949, one-third of which were built in this region.

These projects were in the fields of iron and steel, chemicals, heavy machinery, automobiles and defense industries.

However, many of the traditional industrial enterprises that were established in the 1950s when China adopted a planned economic system, became less competitive and some have been losing money over the past 20 years, during which time China implemented the policies of reform and opening up to the outside world, and moved from a planned economy toward a market economy.

The proportion of the region's industrial output value to the national total dropped to 9 percent from the former 17 percent.

Some loss-making state industrial enterprises were closed, resulting in mass unemployment.

Experts expect the governments to be more open to private investment, from both home and abroad.

Domestic non-government investors are showing great interest in the area. Business people from the coastal city of Wenzhou in eastern Zhejiang Province, have poured approximately 10 billion yuan (about US$1.2 billion) into purchasing state-owned enterprises in Shenyang, capital of Liaoning Province in the northeast.

The three northeastern provinces of Heilongjiang, Jilin and Liaoning are formulating plans to rejuvenate the traditional industrial base of China.

Their plans include regrouping existing industrial enterprises, bringing in advanced technologies, boosting research and development of new products, and opening the doors of state-owned industrial enterprises to private investment from home and abroad.

Premier Wen said recently that China aims to build the northeast region into a national and even a world-class industrial base for equipment manufacturing and important raw materials.

Xu Chuanchen, director of the China State Economy Research Center at Jilin University, said that showed that Chinese leaders were aware that revitalization and prosperity in this old industrial base had a very important bearing on the realization of China's goals of building a relatively affluent society and quadrupling the national GDP within 20 years.

Analysts have called the move another major strategy the Chinese government has adopted to boost its economy following its massive programs to develop the eastern coastal regions starting late last century and the massive program to develop the vast under-developed western region three years ago.

Xu Zemin, a research fellow with the Heilongjiang Provincial Academy of Social Sciences, said the revitalization program is expected to make the northeastern region a new economic growth area following the flourishing Pearl River Delta in the south, a result of the reform drive, and the Yangtze River Delta in the east.

(Xinhua News Agency September 11, 2003)