New plan for old industrial bases

Several ministries announced a joint plan Tuesday to rejuvenate the country's old industrial bases that played an important role in China's economic growth in the past.

The plan, drafted by several ministries including the National Development and Reform Commission (NDRC), said that more investment will be made in the next five years to help restructure these industrial bases.

Other kinds of financial support will also be made available, such as fiscal revenue transfers and new methods of financing, such as bond issuance, to raise money for the rejuvenation, the NDRC said in a statement posted on its website.

The plan will cover 95 prefecture-level cities as well as 25 municipalities and provincial capital cities, whose industrial output together accounted for 24.6 percent of the country's total industrial output in 2011, said the NDRC.

China launched a plan in 2003 to rejuvenate old industrial bases in areas including Northeast China's Heilongjiang, Jilin and Liaoning provinces. Despite the progress made under the 2003 plan, experts said that new efforts are needed.

Chen Weigen, deputy governor of Jilin Province, said the province had been a major beneficiary of the government's support policies in recent years.

"GDP growth in Jilin has been more than 12 percent for nine consecutive years," Chen told reporters at a press conference in Beijing Tuesday. He also noted that the province is expected to see major growth in the auto and petrochemical industries in the next few years.

Tian Yun, a researcher with the China Society of Macroeconomics, said that further reform is needed for old industrial bases in places such as Jilin and Southwest China's Chongqing, even though they have demonstrated renewed energy during recent years.

Tian noted that State-owned enterprises still play a major role in the economies of these industrial bases, but these companies lag far behind smaller private firms and foreign firms in terms of both efficiency and innovation.

"Industrial upgrading is the key factor under the new rejuvenation plan," Tian said.

According to the joint plan, high-tech industries must account for 17.8 percent of the total production in these industrial bases by 2017, while the services sector is expected to account for 45 percent of total output.

The plan set a target for the average annual urban disposable income per capita in these areas to reach 29,900 yuan by 2017. The average urban income per capita in Heilongjiang, Jilin and Liaoning was around 23,000 yuan in 2012.

But Zhang Zhiwei, chief China economist at Nomura Securities, said that the previous plan for rejuvenating old industrial bases had not actually achieved that much success, and that there is still a lot of room for improvement.

"Most of the old industrial bases still lag behind the more developed coastal areas in terms of attracting investment," said Zhang.