THE party chief of China's northeastern Liaoning province has called for the liberation of thought among local cadres in a bid to improve its economy, the official media reported. Gu Jinchi, the secretary of Liaoning's Provincial Party Committee, said in Beijing a big step in thought liberation was necessary for Liaoning's revival, according to a dispatch by the China News Service (CNS). But he did not elaborate on what he meant by thought liberation, or give further details. Liaoning, one of the major industrial bases and with the second largest economy in the country during the 1950s and 1960s, has fallen behind in China's move from a socialist economy to a market-oriented one. At present, Liaoning ranks fifth or sixth in the country's economic production. The CNS quoted Mr Gu as saying the degree of thought liberation among cadres in the province was not enough. 'We have for a long time been influenced by the planned economy, and therefore unable to cope with the market economy,' Mr Gu said. 'The readjustment of Liaoning's industrial structure has failed to catch up with the needs of the new economic system, and many of the old products in the '50s remain unchanged.' He said large and middle-scale state-enterprises were facing various difficulties - a situation people called the 'Northeast Phenomenon'. Mr Gu was speaking at the fourth plenum of the Party's 14th Central Committee meeting, which opened in Beijing on Sunday. Xiao Zuofu, Vice-Executive Governor of Liaoning, said only about one-third of the province's big and middle-size state enterprises were in good shape. Official media had earlier reported 40 per cent of Liaoning's state enterprises were losing money, and the Government had to inject huge amounts of money to keep them afloat. 'Their betterment is the crux of Liaoning's revival,' Mr Xiao was quoted by the CNS as saying. The Liaoning provincial party and Government had decided to improve two-thirds of these enterprises by the end of the 1990s, Mr Xiao said. 'The plan is in two phases: they will be improved by 50 per cent in the first three years and about 70 per cent in the later three,' he said. The majority would be operated under a modern market mechanism rather than the former rigid egalitarian system, Mr Xiao said. Mr Gu said Liaoning had a sound industrial foundation, with good road and rail networks and ports, and this infrastructure was supported by the Liaodong peninsula and cities in the Liaonang hinterland. 'Therefore, as long as Liaoning takes another big step forward in thought liberation, its revival would certainly be realised,' he said. Mr Gu replaced Quan Shuren as Liaoning's party chief 10 months ago amid reports of poor economic performance in the province and corruption among top provincial officials.