Tremendous changes are expected to take place within next five years in Liaoning, a major but lagging industrial base in northeast China, the province's governor said Tuesday.

Governor Bo Xilai told Chinese and foreign media that in the coming years, his province would strive to ease unemployment, form a pillar industry, further increase foreign and private investment, increase fiscal revenue and improve the city environment.

Liaoning, which used to be an industrial center around China in the 1950s and 60s, became sluggish in marching toward the market economy in the mid-1990s due to its single economic structure, intensive with heavy industry.

As a result, over half of its state-owned enterprises in the province closed and more than three million workers were laid off.

The retooling of state-owned enterprises, however, has stepped into a new stage since the Chinese government set forth the strategy of revitalizing the northeast old industrial base this year.

Liaoning province is facing such problems as weak enterprises, mass unemployment, drying up of mines and the environment, said Bo, attributing the problems to inadequate experience, the single economic structure and insufficient openness.

The provincial governor noted that Liaoning had its own advantages though, including its solid industrial technique, unique superiority in science, education and personality, and transportation.

The advantages, noted Bo, would drive the development of the old industrial base.

The key issue in reforming the state-owned enterprises was the renovation of the mechanism, Bo said, adding that Liaoning would boost the privatization of medium and small-sized enterprises, carry out a share-holding system, and attract more foreign direct investment.

Besides, Liaoning would form a leading industry, taking equipment manufacturing as a core, enhance the raw material industry, develop such new industries as information and software, and promote the service sector, the provincial governor added.

The facts prove that all the measures taken have seen positive results in Liaoning province.

Liaoning took a lead in setting up a social security system around China and created employment for over 1.8 million people within two years.

In addition, the non-performing loans of state-owned enterprises dropped 3.2 percent in 2002. The Tiexi district in Liaoning is being constructed as the "capital of manufacturing".

The Political Bureau of the Communist Party of China (CPC) Central Committee on Monday called for accelerated efforts to revitalize the old northeast industrial base, describing it as a long-term and arduous task.

Covering the provinces of Heilongjiang, Jilin and Liaoning, the northeast China region played a major role in the country's industrial development in 1950s to early 1970s.

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

However, many of the traditional industrial enterprises that were set up in the 1950s when China adopted a planned economic system, became less competitive since the country implemented the policies of reform and opening up to the outside world, and moved from a planned economy toward a market economy about two decades ago.

The proportion of the region's industrial output value to the national total dropped to nine percent from a record 17 percent.

The Chinese government decided in early September to turn those outdated, rusty industrial centers in northeast China and other parts of the country into modern industrial bases, making them new and essential growth areas of the national economy.

(China Daily October 1, 2003)