The Dongbei (Northeast China) Special Steel Group, a reconfiguration of the Special Steel Co., Ltd. of Liaoning Province and Beiman Special Steel Co., Ltd. of Heilongjiang Province, was inaugurated in Dalian, a coastal city of the northeastern province of Liaoning, on Thursday.

The new steel group comprises six subsidiaries with 100 percentfinancing by the group, 11 subsidiaries most of whose shares are controlled by the group and one subsidiary which has bought into the group.

Zhao Mingyuan, the group's chairman, said its annual output of special steel was expected to reach 3.28 million tons and of rolled special steel to top 2.88 million tons within five years.

With a projected annual sales income totaling 17 billion yuan (more than 2 billion US dollars) by 2009, the group would become a leading special steel maker in China and one of the top five in the world, Zhao acknowledged.

Inauguration of the steel group was regarded by experts as a major step the northeast region of China has made in the reform and regrouping of state-owned enterprises, and is expected to playa crucial role in rejuvenating the rusty industrial belt.

Covering the provinces of Heilongjiang, Jilin and Liaoning, thenortheast China region contributed tremendously in the country's industrial development in the 1950s to early 1970s. However, many of the traditional industrial firms founded in the 1950s when China adopted a planned economic system, became less competitive since the country implemented the policies of reform and opening itself to the outside world, and moved from a planned economy toward a market economy about two decades. The ratio of the region's industrial output value to the national total dropped to nine percent from a record 17 percent.

The Chinese government decided in early September last year to turn those outdated, lagging industrial centers in the northeast and other parts of China into modern industrial bases, making themnew and essential growth areas of the national economy.

Source: Xinhua