The State Development Bank (SDB), one of China's three policy banks, has signed an agreement to grant 50 billion yuan (6.04 billion US dollars) of soft loans and one billion yuan (1.2 billion) of technical assistance loans to Liaoning Province, a major but rusty industrial base in China.

The loans will be used in the development of the northeast province's energy resources, transportation and raw materials industries, construction of water conservancy projects. The money will go to serve agriculture and forestry, public facilities in urban areas and subsidiary projects.

Part of the loans will also be used to relocate people out of areas suffering coal mining cave-ins, assurance for small and medium-sized businesses and development of education, health care and social security undertakings in the province, according to agreement signed between SDB and Liaoning provincial government Monday.

By the end of last year, SDB has signed three agreements of cooperation with Liaoning province, involving 131.7 billion yuan (15.92 billion US dollars) in loans.

Currently, SDB has put in 85.1 billion yuan (10.29 billion US dollars) to support a group of major projects in the province, including renovation of power grids in 12 cities, rebuilding of Harbin-Dalian electrified railway, Jinzhou-Fuxin expressway, expansion of Shenyang-Dalian expressway and Shenyang-based Taoxian International Airport.

SDB's loans have played an important role in pushing forward economic and social development of Liaoning, said Li Keqiang, governor of Liaoning, at Monday's signing ceremony.

After the founding of New China in 1949, the northeast region contributed the country's first steel, machine tools, locomotives and planes. The region is still seen as having numerous advantages in these sectors. Many of the traditional industrial companies have become less competitive, however, and some have lost money during the past two decades, as China has shifted from a planned economy towards a market economy.

The Chinese government launched a strategy to rejuvenate the northeast region, which consists of the provinces of Heilongjiang, Jilin and Liaoning Provinces, more than one year ago. The strategy is aimed at building the traditional base into a new growth area of the national economy following the Yangtze River and Pearl River deltas.

Source: Xinhua