China calls for new private bank to rejuvenate rust-belt northeast

Lender to be established in June next year as part of push to boost economic growth in the region

PUBLISHED : Wednesday, 16 November, 2016, 10:30pm
UPDATED : Wednesday, 16 November, 2016, 10:52pm

China’s State Council has called for a private bank to be established in the struggling northeast as part of a new plan published on Wednesday to support economic growth in the region.

The government would also strengthen policy propaganda and beef up the way it monitors public opinion to prevent negative voices from undermining confidence in the three northeastern provinces of Liaoning, Heilongjiang and Jilin, the cabinet said in the policy document.

It said it would work to prevent the dissemination of opinions that “talk down” the northeast and respond quickly to correct negative and false reporting about the region.

Beijing’s efforts to “rejuvenate” the northeast began in 2003 as the central government tried to bring stability to an old industrial region hit by layoffs, strikes and organised crime.

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It has since spent billions of yuan to regenerate shantytowns, build new transportation infrastructure and encourage new high-tech industries in the three provinces, but critics have said the strategy has done little to ease the region’s dependency on the state.

The State Council said local governments would be responsible for drawing up new policies to develop the private economy in the region, which has long been dominated by powerful state-owned firms.

At least one new regional bank would be established by the end of June next year, and a “financing guarantee system” would also be set up to support small to medium-sized enterprises, it said.

Beijing will also look into developing new industries in resource-depleted cities in the northeast to create jobs, and will accelerate construction of infrastructure projects.

The central government would provide special financial support for northeastern cities suffering from recession and resource depletion, the plan said, naming Jixi and other struggling coal cities in Heilongjiang, where protests against unpaid wages have been common.

China has issued several directives this year outlining new infrastructure projects and other investments in a bid to boost growth in the region, home to the only province whose economy is in recession.

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It said in August that it would launch 127 new large-scale transportation, energy, water and urban construction projects over the 2016-18 period to “cultivate new momentum” in the northeast economy.

According to official data, Liaoning’s economy went into recession in the first half of this year, falling 1 per cent after a 58 per cent drop in fixed-asset investment.

While the province has not published economic data since August, a report published by the 21st Century Business Herald estimated that Liaoning’s gross domestic product fell 2.2 per cent in the first three quarters as a whole.