How can Heilongjiang catch up with the rest of the nation by revitalizing its smokestack cities of the 1960s?

How can the government of the Northeast China province generate inspiration and opportunities to its younger generation whose parents are retiring from the lacklustre State-sector industry?

The answers lie on a roadmap literally a map of a 280-kilometre industrial corridor that is intended to be the new provincial powerhouse.

Vice-Governor Liu Haisheng told China Daily in an interview that it is a three-step, 15-year strategy for building an industrial corridor connecting Harbin with the oil city of Daqing to its northwest, and further to Qiqihar, the border trading post with Russia.

The industrial corridor is to cover 21,000 square kilometres, almost the size of Wales, and also consist of smaller cities like Zhaodong and Anda (see map).

By the end of the year, a total of 61.4 billion yuan (US$7.65 billion) will be poured into its construction, said Liu.

Of the amount, 16.2 billion yuan (US$2 billion) will be used in public infrastructure development, particularly roads connecting the existing Harbin-Daqing-Qiqihar expressway, while the rest will be used on new industrial projects, Liu revealed.

The projects, including biological companies and agricultural processing enterprises, are expected to generate 15 billion yuan (US$1.87 billion) in output value per year.

The first phase of the industrial corridor programme is scheduled to be completed in 2010 and will reclaim 274 square kilometres. Most of the land allocated for reclamation is saline, not suitable for farming; and the use of farmland will be kept to the "minimum level," Liu said.

The second phase will be finished by 2015, and the third by 2020.

The provincial government is placing particular emphasis on industries such as equipment manufacturing, petro-chemicals, food, medicines, high-tech firms and modern logistics, he said.

Of the more than 300 enterprises, overseas and domestic, which last year showed interest in setting up firms in the proposed corridor, at least 200 have started building facilities with a total investment of 4.4 billion yuan (US$546 million).

The development of farm products, such as dairy, soybeans and meat, will also be encouraged.

The industrial corridor is also expected to boost the province's trade with neighbouring Russia, which stood at US$5.68 billion last year, the vice-governor said.

About 80 per cent of Heilongjiang's border trade is conducted by private enterprises.

A 5.8-square-kilometre area will be allocated in Harbin's Jiangbei industrial zone to serve as a new processing centre for trade with Russia.

The province has 66 joint projects with Russia in energy and raw materials, with companies from Heilongjiang licensed to develop 14 mines and three oil facilities across the border.

In the domestic economy, Heilongjiang expects to play a more important part as an energy supplier, after new oil and gas reserves were confirmed recently to beef up Daqing supplies.

The new fields are located in the cities of Shuangcheng, Zhaodong, Zhaoyuan, Anda and Haila'er, the vice-governor said. Once they become operational, they will become part of Daqing.

Daqing's crude oil output stood at more than 45 million tons last year, accounting for 30 per cent of China's total production.

At the same time, the official said, a new natural gas field in Daqing, estimated to have 100 billion cubic metres of reserves, has the potential of becoming China's fifth-largest gas supplier.

(China Daily 04/18/2006 page1)

(For more biz stories, please visit Industry Updates)