Liaoning Province Development: Traditional industrial base succeeds in SOE reform

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Liaoning province's economic achievements can be seen as a microcosm of rejuvenation in what's known as China's northeastern rust belt. The region has experienced many difficulties in economic growth but has been determined to regain industrial success via reform in various sectors. CGTN's Feng Yilei has more.

Financial loss, lack of innovation and incentives, and poor execution… Northeast Pharmaceutical in Liaoning province, used to suffer from all the difficulties of typical state-owned companies in China's northeastern rust belt. With over seven decades of pharmaceutical activities, the company launched a pilot mixed ownership reform in 2018 to change the situation.

WEI HAIJUN, CHAIRMAN NORTHEAST PHARMACEUTICAL GROUP "We have noted a big gap with our competitors in globalization. We must adjust our administration, regulation and competitive strategies to meet market requirements."

The company managed to increase its annual income by over 30 percent in the past year. That happened after it introduced private capitals and efficient operation mechanisms from its shareholders.

TONG XIN, WORKER NORTHEAST PHARMACEUTICAL GROUP "We are happy to earn a lot more and enjoy better staff welfare after the reform. There is more pressure and responsibility now- but the harder you work, the more you get."

Changing the authorized management system of state-owned capital, has also been very effective in optimizing regional economic structure- by phasing out excess and outdated capacity.

Chimneys of old iron and coal factories were torn down- and instead, more efforts were made in research and development.

Through SOE reform, the zinc factory in Huludao city, once the largest of its kind in Asia, has eliminated pollutant discharge while making breakthroughs in recycling, low-energy production and technical niche.

FANG YONG, DEPUTY DIRECTOR DEVELOPMENT AND REFORM COMMISSION OF LIAONING PROVINCE "Liaoning has already fulfilled its obligation of eliminating overcapacity in various sectors in accordance with the nation's Five-Year Plan. The structural reforms are starting to pay, competitiveness and profitability of the traditional heavy industries have been boosted."

And state-owned firms in this former heavy industrial hub have also become a new magnet for foreign investors, as Liaoning opens up to the world.

Brilliance Auto Group, which has had a partnership with BMW for over 15 years, has been provided state-of-the-art assembly line and absorbed foreign technology and business orientation.

LIU PENGCHENG, VICE PRESIDENT BRILLIANCE AUTO "We now have a joint venture with Renault in addition to BMW. For the next step, we will conduct international cooperation regarding core engine components, new energy and intelligent network."

Last year, the total profit made by major SOEs in the province saw an over 40% year-on-year rise. Such powerful strength for the nation to count on, as many here in northeast China believe, will bring economic growth back onto the right track with the right reform tools and support. Feng Yilei, CGTN, Shenyang, Liaoning Province.