Northeast China's Heilongjiang province will give top priority to developing eight key economic areas, said vice-governor Sun Yao during the 2009 Heilongjiang International Investment Cooperation Fair last week.

They included Hadaqi Industrial Corridor, Eastern Coal-Power Integration Base, Northeastern Asia Economic Trade Development Area, Greater and Lesser Hinggan Mountains Eco-Protection Area, an agricultural development and experimental zone on the plains, the Beiguofengguang Tourism Development Zone, the Hamu Suidong-Russia Trade Processing Area and a high-tech industry cluster.

Some 400 distinguished guests from 10 countries and regions, including the United States, Britain, Germany, Russia, Japan, Republic of Korea, Australia, as well as Hong Kong special administrative region and Taiwan province, showed great interest in the eight emerging areas during the fair.

The event was sponsored by the Heilongjiang provincial government and Harbin city government, and co-sponsored by the China Association of Enterprises with Foreign Investment, China Enterprises Forum and Alibaba Group.

Delegates included top executives from global companies such as GE, Johnson & Johnson, Pepsi, Siemens and Sony.

They held in-depth discussions on the development of the eight economic areas, and how Northeast China will cope with the financial crisis and channel more funds to the region.

"The province has rich resources in petroleum, forestry, coal and agricultural sectors," said the vice governor. "It also boasts a niche in human resources. Its geographic advantages with Russia and Far East Asia have unique competence. Based on those advantages, the province mapped out the strategy to beef up efforts to build the eight economic areas."

Yet Sun noted that the risks and challenges brought by the financial tsunami will make the next five years crucial to the province in its revitalization and development for the eight areas.

As such, the provincial government will be committed to boosting domestic demand, transforming economic development mode, optimizing industrial structure, and deepening reforms.

"Three key tasks ahead will be optimizing investment climate, introducing hi-tech projects and speeding up construction," he said.

The province will explore the advantages in power, coal chemistry, metallurgy, construction materials, and biochemistry.

It will extend the industrial chain in the coal sector, adopt state-of-the-art technology and develop a circular economy.

Along with the development in the eight areas, Heilongjiang will push regional trade cooperation, and boost its trade with Northeastern Asia and Europe, he said.

It will also spare no efforts to build a modern logistic network.

Sun noted, the province has basically controlled the pollution and eco-destruction in the Greater and Lesser Hinggan Mountains, and some eco-industries have seen rapid development there. The industrial structure has been optimized and infrastructure development is on the rise.

VC forum

During the fair, a high-profile venture capital (VC) forum was held in the Harbin International Convention Center on Jan 7.

The forum served as a platform for investment institutions to deepen their understanding of local enterprises.

Sun expressed his hopes that enterprises in the province could enhance collaboration with investment institutions, in a bid to quench their thirst for capital and break the bottleneck for fundraising.

Li Wanshou, president of the Shenzhen Capital Group, said VC focuses more of their attention on the modern agriculture, service, infrastructure, pharmaceutical, hi-tech and healthcare sectors currently. VC firms bet their money for long term, rather than speculation and embrace on the sectors targeting domestic demand, so the province should enhance its competitive edge in those sectors.

Ha Jiming, chief economist of the China International Capital Corporation Limited, suggested the government should give more policy support to the healthcare, education and transportation sectors, and vie for more private investment.

Ha stressed that "Heilongjiang is credited with raw materials and equipment manufacturing industries, but the human resource costs will keep rising with the intensified aging problem. However, Vietnam and India have fewer problems in this regard compared with China, so provinces like Heilongjiang will lose their advantages in some low-cost industries".

He suggested Heilongjiang as well as other traditional industrial bases attract more investment and vitalize hi-tech industries. "The right direction for the province is to produce more niche products to compete with Japan and South Korea."

(China Daily January 14, 2009)