Old industries still play large role, but new ones need to emerge, analysts say

China's top economic regulator on Tuesday announced a three-year plan to boost growth in the country's northeastern region, following a mild recovery in the first half of the year.

The plan lists 137 key tasks for upgrading the economy, improving social welfare, creating job opportunities and simplifying administrative procedures, according to Zhao Chenxin, spokesman for the National Development and Reform Commission.

To better accomplish the tasks, a total of 127 fixed-asset projects will be launched, covering fields such as transportation, energy construction, waterworks, agriculture, and urban and rural construction in the next three years, Zhao said.

Northeastern areas, including Liaoning, Jilin and Heilongjiang provinces, are old industrial bases that were once the engine driving the nation's economy. In recent years, they have been ranked among the worst economic performers, as the nation moves away from an industry- and investment-led growth model.

"Despite some progress in the first half this year, unbalanced growth has been found across regions, and across sectors," Zhao said.

In the first six months, Jilin province saw 6.7 percent growth year-on-year and Heilongjiang achieved 5.7 percent. But Liaoning contracted 1 percent.

Meanwhile, value-added output from high-tech industries such as robotics, biological technology and new materials experienced more than 10 percent growth, while low-end manufacturing and resource-intensive industries shrank, Zhao said.

Zhao made the comment after Xu Shaoshi, head of the commission, carried out a spot investigation of the region earlier this month.

Xu stressed that more efforts are needed to press ahead with reforms and improve the investment environment, at a time when the old engine still plays a large role and new industries have yet to power ahead.

The commission will release more targeted policies to revitalize the economy and help upgrade the economic structure of the region, Xu said.

Although the Northeast faces more difficulties than coastal and eastern regions, people should not lose hope, said Zheng Xinli, deputy director of the China Center for International Economic Exchange.

Zhu Yi, an Asian metals and mining analyst at Bloomberg Intelligence, said that government-led fixed-asset investment projects in the region would improve shortcomings as the region is cultivating new industries in high-end manufacturing and the service sector.

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