The Chinese government showed its commitment Wednesday to breathing new life into northeast China's struggling economy, agreeing to set up a special department to deal with the task.

The move follows the landmark decision of last year's 16th National Congress of the Communist Party of China (CPC) to put revitalizing the northeast at the top of the government agenda, Thursday's China Daily quoted an official surnamed Peng at the Industry Department under the National Development and Reform Commission.

"It is a big step forward to realize the government's goal of revitalizing the old industrial base," said Peng, adding that the State Council will form a national leading group soon to guide the blueprint.

But Peng did not reveal exact timing of establishment of the leading group and office.

The Political Bureau of the CPC Central Committee recently called for accelerated efforts to revitalize the old northeast industrial bases, calling it a long-term and difficult task.

The three Northeast provinces of Heilongjiang, Liaoning and Jilin, known as the "industrial cradle of China", played a vital role in the country's industrial development from the 1950's to the early 1970's.

However, many of the traditional industrial firms established in the 1950's, when China adopted a planned economic system, have been struggling since the country moved towards a market economy two decades ago.

The proportion of the region's industrial output value to the national total has dropped to 9 percent from 17 percent. Some loss-making state industries were closed, having laid off large numbers of workers.

"It is time to get rid of the effects of the planned economy completely and establish a market-oriented economy, which might be the only solution for these enterprises", said Xu Chuanchen, a professor and a researcher on the State-owned sector at Jilin University.

(Xinhua News Agency November 27, 2003)