BIZCHINA / Biz News

Time to care Heilongjiang

By Tu Lei (chinadaily.com.cn)
Updated: 2007-06-20 17:27

Heilongjiang Province is eager to benefit more from resources
distribution, said Yi Junqing, head of the Publicity Department of the
Communist Party of Heilongjiang Province.

Northeast China's Heilongjiang Province is an important production base
of commodity grain, equipment manufacturing, and energy resources in
China. Statistics show that it has provided half of the crude oil,
one-third of timber, one-tenth of coal, and one-seventh of commodity
grain to the country since the founding of People's Republic of China in
1949.

Yi Junqing, head of the Publicity Department of the Communist Party of
Heilongjiang Province.

However, resources are not being properly distributed in Heilongjiang,
and the region has thus far failed to transition away from a planned
economy.

Take crude oil as an example. The Heilongjiang city of Daqing, the
largest oil production base in China, had a crude oil output of 43.40
million tons in 2006, and realized a GDP of 162.03 billion yuan
(US$21.208 billion) in 2006, maintaining an increase rate of more than 8
percent for eight consecutive years, but most of fiscal income is
collected by the central government.

"Daqing turns in 93 yuan to the country per 100 yuan," said Hu Peiyuan,
vice secretary of the Daqing Municipal Party, in Daqing City, adding
Daqing only keeps 2.5 yuan per 100 yuan of income for itself.

Crude oil from Heilongjiang is directly transported to other areas, such
as North China's Hebei Province via pipelines, and Heilongjiang has not
built up proper processing chains for oil products.

Secondly, the ability of industry to further process resources is also
weak, although Heilongjiang enjoys an edge in energy resources and raw
materials compared with the rest of China.

Figures show that its exploitation of crude oil reserves accounts for
half of the national total, while it also has 22.7 billion tons of known
coal reserves, 1.37 billion cubic meters of forest reserves, and abundant
grain and animal husbandry production.

"We imported a large quantity of timber from Russia every year, but we
bought the furniture from Shenzhen City, South China's Guangdong
Province, at a much higher price," Yi said. "We lack supporting
industries to further process on resources."

How to increase the value of traditional industries in Heilongjiang is a
question open for debate, as the region boasts labor and natural
resources.

Heilongjiang is known for its abundant resources and advantageous
geographic position, but laborers there are known for their desire to
maintain the status quo, instead of taking the initiative, a condition
reflecting the area's planned economy.

Heilongjiang residents take a passive approach, "waiting for, relying on
and requesting" aid, Yi said.

At present, China is implementing its policy of revitalizing the old
industrial bases in Northeast China and the central government has
provided Heilongjiang strong support in the areas of taxation,
agriculture policies, and social security, and has also increased
investment in project construction.

Reforming ownership structures and changing attitudes will go a long way
towards spurring development and shifting away from the entrenched
planned economy in Heilongjiang, Yi said.

(For more biz stories, please visit Industry Updates)

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