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Changchun welcomes foreign cash
By Jing Ji (China Daily)
Updated: 2004-05-26 08:36

China's "car city" of Changchun is welcoming foreign investment with open arms, hoping it can play a major role in efforts to revitalize the local economy.

Changchun Vice-Mayor Cui Jie said the municipal government planned to open the capital of Jilin Province even further to foreign investment.

Overseas companies will benefit greatly from the recently launched campaign to breath new life into the nation's old industrial base in the Northeast, said Cui.

The city's recent economic revival plan will offer them a wealth of opportunities, added the vice-mayor.

He wants overseas investors to take part in the reform of Changchun's State-owned enterprises (SOEs), and is offering them new preferential policies in a bid to lure them here.

These incentives include lifting the burden of bad debts and overstaffing from those foreign firms that take a stake in the SOEs, which will all be reshuffled by 2006, revealed Cui.

"The price of an enterprise will have to be subject to the market," Cui said. "It is the reflection of its net assets, but not the value on the balance sheet."

The government will not ask purchasers to meet particular employment goal after they take a stake in the enterprise.

"In the past, we improperly pursued an employment rate and imposed a much harsher requirement on those taking stakes in SOEs.

"Now, we only ask them to do their best to hire the workers of the SOEs they buy, and we only give a suggested goal of hiring 70 per cent of the firm's old employees," Cui said.

The government will be responsible for solving debt and employment issues, he said.

And Changchun's urban construction sector is another attractive opportunity for foreign investors, Cui suggested.

"In the past decade, the city has expanded annually by 8 square kilometres. Every square kilometre offers a business value totalling more than 300 million yuan (US$36.27 million)," he said.

"The urban expansion pace will accelerate," he added.

Cui believes that there is also great potential for the development of Changchun's consumption market, which he sees as under-developed but potentially enormous.

Cui believes Changchun's pillar industries of auto manufacturing, agro-processing, pharmaceuticals and optical electronics will attract a growing number of foreign players.

His confidence is based not only on the solid industrial foundations the city has developed in the past decades, but also on Changchun's abundant and well-trained labour force and its convenient transportation grid.

Changchun has the largest economy in Jilin Province, notching up a gross domestic product of 133.8 billion yuan (US$16.12 billion), or 53 per cent of the provincial total.

Leading local officials have headed business delegations, comprised of local firms eager to attract foreign partners, to a number of countries and regions such as Hong Kong, Singapore, South Korea, Germany and Taiwan.

These have already registered an initial success, Cui said.

"Our promotion of Changchun has paid off," said a smiling Cui, adding that "the feedback from international companies is better than expected."

What proves Cui's words is the establishment of a mainland-Hong Kong second hand car fair last month, covering an area of 100,000 square metres.

The city is also promoting its development zones as a platform to lure overseas investors.

"We will further expand the zone from the current 500,000 square metres to 1 million in the years to come," Cui said, "The zone is expected to be home to more foreign-invested companies."

Joint ventures in the Changchun Economic and Technological Development Zone (CETDZ), one of the nation's top ten economic development zones, say they feel satisfied with the zone's streamlined administration and good business climate.

Cui expressed confidence that the provinces of Jilin, Heilongjiang and Liaoning will become stronger since the central government has shifted its focus from coastal China to the vast northeastern region.

Cui compared the development of Northeast China with that of Shanghai, China's economic powerhouse in the Yangtze River Delta.

In late 1980s, Shanghai lagged far behind South China, the pioneer of China's reform and opening drive. But the municipality, boasting a solid industrial base, rose like a phoenix after the central government supported its economic growth in early 1990s.

Northeast China, and Changchun as part of it, will follow in Shanghai's footsteps, he believes.

"We have fine industrial basis," he said, "and are prepared for take-off."

"Shanghai's present is Northeast China's future," Cui insisted.



 
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