More aid for China's north-east rust belt

Financial and infrastructure support as cities grapple with layoffs and environmental woes

BEIJING • China will offer more financial support to drive the rejuvenation of its struggling north-eastern rust belt over the next five years, an official with the state planning agency said yesterday.

The government plans to launch more than 130 infrastructure projects in the north-east over the next three years, said Mr Zhou Jianping. He is the head of the National Development and Reform Com- mission's office in charge of transforming the region's economy.

China would expand financial support available to the region, including additional funds to help a large number of "resource-depleted" cities handle bankruptcies and layoffs and also pay huge environmental clean-up costs, he said.

"In the north-east, some cities have gone through more than 100 years of coal exploitation and China needs to pay attention to them and solve problems like looking after the old, the shortage of pension funds, paying the costs of resource depletion and the environment," Mr Zhou said.

He did not say how much additional funding the central government would make available, saying the final amount would depend on needs, adding that the government would rely primarily on the market to achieve goals in the region.

The heavy-industrial north-east, made up of the provinces of Liaoning, Jilin and Heilongjiang, as well as the region of Inner Mongolia, has struggled to cope with the problems of resource depletion as well as an economic downturn that has devastated sectors like coal and steel.

At 3 per cent, Liaoning experienced the lowest growth rate in the country last year. Growth in Jilin and Heilongjiang was also lower than the national average. China's economy grew at an annual rate of 6.7 per cent in the first quarter of this year.

The oil city of Daqing in Heilongjiang experienced negative growth for the first time ever last year following a sudden collapse in crude oil prices.

The coal cities of Jixi and Qitaihe also saw their economies shrink over the year after the state-owned Longmay Group, which owns most mines in the area, reduced capacity and laid off more than 100,000 workers. Longmay has allowed many of its staff to take early retirement in order to cut labour costs, but Mr Zhou said that could not become official state policy because of the strain on pension funds.

China is planning to close 500 million tonnes of surplus coal capacity and up to 150 million tonnes of crude steel capacity over the next three to five years, and has already allocated 100 billion yuan (S$21 billion) to help local governments handle job losses.

In a separate announcement, China will this year move more than two million of its poorest citizens from remote, inland regions to more developed areas, an official of the Cabinet said yesterday.

The mass relocation of people is a strategy targeted at lifting 10 million citizens out of poverty by 2020, Xinhua news agency has said.

The numbers would be stepped up gradually and may eventually hit three million, added the official, Mr Liu Yongfu, who heads the Cabinet's Leading Group Office of Poverty Alleviation and De- velopment. Last October, the Cabinet said China aimed to lift all its 70 million poor above the poverty line by 2020.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 11, 2016, with the headline 'More aid for China's north-east rust belt'. Print Edition | Subscribe