The Chinese Government wants to work with its regional neighbours to rejuvenate the nation's traditional northeastern economic base.

An official from the National Development and Reform Commission (NDRC) told China Daily that it is planing to enhance economic co-operation with Russia, Japan and the Republic of Korea (ROK) to build Northeast China -- the provinces of Heliongjiang, Jilin and Liaoning -- into a national and even a world-class industrial base for equipment manufacturing and important raw materials.

"We should not only stress co-operation within the three provinces, but also the formation of a regional market in Northeast Asia," said the anonymous NDRC official.

The official also said China's ambitious plan to invigorate its industrial base means more development opportunities for foreign investors.

"Our polices will be more open and market-oriented," said the official, adding that the country will further open the doors of State-owned industrial enterprises to private investment from home and abroad.

The NDRC and the State Council Development Research Centre, the central government's think tank are busy formulating measures to restructure the nation's old industrial base.

Investors will be encouraged to participate in regrouping existing industrial enterprises, bring in advanced technologies and increase research and development of new products.

Lu Zheng, president of the Institute of Industrial Economics Research under the Chinese Academy of Social Sciences said much closer agricultural co-operation with foreign countries should also be emphasized.

"We should stress the comparative advantages when coming up with measures,'' said Lu.

Besides industrial competitiveness, a good climate and good soil conditions for agricultural development are the region's other strong points, said Lu, adding that Japan and the ROK are ideal markets for agricultural products.

New look for area

The northeast region was dubbed the "industrial cradle" of New China, playing a major role in the nation's industrial development.

China, Russia, the ROK and Japan have already started economic co-operation in the region.

The most recent example was the building of the Sino-Russian Science and Technology Centre, a project between the Chinese and Russian governments for broad-based research in Liaoning Province.

China also plans to invest 1 billion yuan (US$121 million) in establishing a high-tech industrial park catering for Russian high-tech firms in Shenyang. The central government launched 150 key State heavy industrial projects in the first few years after the founding of the People's Republic of 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, automobile and defence industries.

However, many of the traditional industrial enterprises that were established in the 1950s when China had a planned economy, 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.

The proportion of the region's industrial output value to the national total dropped to 9 per cent from the former figure of 17 per cent. Some loss-making State industrial enterprises were closed.

The central government has promised to work out preferential policies and offer financial support to assist industrial rejuvenation in the region.

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