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Shenyang Bringing Aging Industries into Modern Age

Shenyang, capital of northeast China's Liaoning Province, expects to be a center of advanced equipment manufacturing by 2012, as the city's mayor Li Yingjie says the local government plans to continue strenuous efforts to bring the aging industrial region into the modern age.

The city is confident it can build nine backbone equipment manufacturing industries along its Shenxi Industrial Corridor over the next five years - by which time 20 enterprises will each have an annual output value topping 10 billion yuan.

One hundred products competitive in the world market will be produced in the city by 2012, Li said as he unveiled a development blueprint.

Shenyang benefited most from revitalization of the old industrial region of northeast China, becoming a symbol of the successful strategy, according to Li, also a deputy of the 11th National People's Congress.

The city's refurbishment and restructuring of old factories is near fruition, Li said, with the coming five years key to Shenyang's modernization.

The city will accelerate the improvement of its economic structure, strengthen energy conservation, reduce emissions and enhance ecological protection this year, Li said.

The mayor singled out the city's equipment manufacturing sector to illustrate the progress that has been made. The city's Tiexi district alone realized an output value of 46.7 billion yuan last year, 3.64 times that of 2002, while per capita GDP doubled over the period.

The 38.1 sq km equipment-manufacturing core zone of Shenxi Industrial Corridor has been growing rapidly over the past five years, with the number of large enterprises reaching 650 last year from its previous 232 in 2002.

Together they registered average growth of 40 percent a year in industrial output value over that time.

To realize further and faster development of the sector, the city chose to restructure small companies into big players. They are grouped in an orderly labor-division format from the lower to the upper reaches of the industry. After restructuring, auto and auto-parts companies - a priority sector Shengyang decided to develop - became the first to see their combined output value top 10 billion yuan.

The city encourages enterprises to become competitive global players by giving them development guidance and policy support.

Twenty equipment-manufacturing enterprises now have international-quality operations, with strong innovation capabilities, considerable market share and strong capacity in technology and exports.

Shenyang Machine Tool Group, Northern Heavy Industrials Group Co and Yuanda Enterprise Group will be the first to realize an output value of more than 10 billion yuan each this year.

Among 77 products ranging from digital machine tools to large engineering machinery and petrochemical equipment, 44 products from Shenyang's Tiexi district have the lion's share of the domestic market, while 18 products from the district rank in the Top 10 internationally.

The rapid development of equipment manufacturing enterprises in Shenyang led to wide interest from giant investment companies from home and abroad, including Goldman Sachs Group and TPG Newbridge Capital.

As the made-in-Shenyang label gains in global reputation, more investment from overseas is pouring into the city.

Over the past five years, 786 foreign enterprises with a contracted investment of $3.2 billion moved into the western part of Shenyang. Thirty of world's top-500 companies, including Mitsubishi and Emerson, have begun operations in the city's Tiexi district.

The city has mapped out a plan to turn the industrial corridor of western Shenyang into a globally competitive manufacturing region in the near future.

The transformation of old industrial sectors has won appreciation from the State. Zhang Guobao, chief of the State Council office for rejuvenating the Northeast, said in June 2007: "The changes in Tiexi are the epitome for strategies to revitalize the old industrial bases in the Northeast".

(China Daily March 20, 2008)

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