Northeast may see innovation surge

Experts urge State firms to boost restructuring efforts, revitalize regional economy

Centrally administered State-owned enterprises and provincial-level State-asset regulators in China's northeastern region will be encouraged to focus on technology innovation and learn from previous experiences in order to promote regional revitalization, government officials and business leaders said.

SOEs in this part of the country will be encouraged to learn from the experience of China Merchants Group, a Hong Kong-headquartered central SOE.

CMG is known for its success in reorganizing its entire group of subsidiaries. Liaoning Port Group in Liaoning province is part of the group. The reorganization exercise improved the group's industrial layout, promoted the quality of constituents' operations, and strengthened coordination among their internal departments.

This helped evolve a new development pattern that revitalized associated enterprises as well.

In the third quarter of this year, CMG started China-Europe freight train services between Shenyang, capital of Liaoning province, and the Berelast Logistics Center, about 70 kilometers from Moscow's Red Square.

In recent months, CMG added more container shipping services to connect ports in Liaoning with other destinations in Japan, South Korea and markets of the Association of Southeast Asian Nations.

Innovations are due in areas like technology and business as part of reforms at SOEs in the country's northeastern region, said Weng Jieming, vice-chairman of the State-owned Assets Supervision and Administration Commission of the State Council.

Enterprise systems and modern management capacity should also be valued to improve companies' core competitiveness, he said at a conference in Dalian, Liaoning province, late last month.

Cui Fenglin, Liaoning's vice-governor, said that apart from creating a more flexible environment for private and foreign companies, the province will learn from the successful market economy experiences of other regions. Emphasis will not be placed on simply bringing in big-ticket projects.

In the early days of the People's Republic of China, a heavy industry-centered industrial base with a complete industrial system was formed in the country's northeastern region.

The base greatly contributed to the country's economic development from the 1st Five-Year Plan (1953-57) to the 1990s.

However, the pace of regional economic growth slowed later due to a series of systemic problems as well as what was seen as an anachronistic economic structure of enterprises in the industrial base. Such problems were sought to be addressed through the implementation of the reform and opening-up policy.

That helped keep the industrial base strong, thereby creating a fresh development opportunity for the region now, said Weng from the SASAC.

The government will help the SOEs in the region to adjust and upgrade their industrial structures so as to be on a par with world-class standards.

In order to narrow the gap between themselves and the SOEs in China's Yangtze River Delta and Pearl River Delta, central SOEs in northeastern region have introduced products based on their latest technological breakthroughs. In this context, Heilongjiang province-based Harbin Electric Corp and Liaoning province-based Ansteel Group Corp Ltd stand out.

Among the outstanding products of northeastern SOEs are impulse water turbines and special steels, which are used in the manufacture of various industrial goods.

Northeastern SOEs have also been seeking to make their operations market-oriented and vigorously promote mixed-ownership reform.

In Changchun, Jilin province, last month, CRRC Changchun Railway Vehicles Co, a subsidiary of China Railway Rolling Stock Corp, the country's largest rolling stock manufacturer by production volume, announced it has developed a new generation of high-speed trains that can adapt to different track gauges, or widths, and climatic conditions.

The new type of train is designed to reach a top speed of 400 kilometers per hour. It can run on international railways with different track gauges and varying power supply standards.

Various global rail track gauges have been one of the stumbling blocks to cross-border railway interconnections among different rail routes, said Wang Feng, the company's president.

There are currently four main types of gauges in the world: the 1,435-millimeter standard gauge, the 1,520-mm Russian broad gauge, the 1,676-mm European broad gauge and the 1,067-mm narrow gauge.

When regular trains pass through countries with different gauges, the train cars have to be lifted so that their wheel assemblies can be replaced at border stations, which takes at least two hours, not including the time and effort needed to work out any other problems, said Wang.

Since the new train has variable-gauge wheel assemblies, it enables the cars to be pulled along a different gauge track at reduced speed, which improves the efficiency of rail services and facilitates the smooth flow of traffic, he said.

The train also features increased adaptability to environmental changes. It can operate in temperatures between -50 C and 50 C, the company said. The train's new technologies mean it can be used on about 90 percent of the railway networks globally.

Supported by intelligent sensors and big data and operational monitoring technologies, the train can conduct intelligent evaluations, diagnose problems and provide early warnings to ensure safety, according to the company.

China FAW Group Co Ltd, a Changchun-based State-owned automaker, plans to invest 110 billion yuan ($16.2 billion) in new technologies and products such as new energy, connected and smart vehicles during the 14th Five-Year Plan period (2021-25).

"In response to the country's dual-circulation development pattern, and its call to take control of key and core technologies, we have decided to increase digitalization of our products. We will form more partnerships with research institutes and companies in other sectors to upgrade the product range, amid the wider industry shift toward developing intelligent connected vehicles," said Xu Liuping, the group's chairman.