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Shanxi plans 5-year economic overhaul

Updated: 2011-09-13 11:05

By Du Juan (China Daily)

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Shanxi plans 5-year economic overhaul

A worker loads coal in Shanxi province. The local government said fixed-asset investment in the area will reach 5 trillion yuan in the next five years, and experts said it must depend on the energy sector to boost its economy. [Photo / China Daily]

TAIYUAN - The government of Shanxi province said fixed-asset investment in the area will reach 5 trillion yuan ($770 billion) in the next five years, aiding the process of economic restructuring.

The northern province, a source of energy for the country, is actively seeking the right method of transforming its economic development.

"We are looking forward to good projects," said Li Baoqing, director of the Shanxi Development and Reform Commission. "Money is not a problem, but we want the best projects."

He said that investment amounts over the five-year period would not be uniform each year. The first year's figure will be 600 billion yuan, and the total will rise 20 percent annually.

"The money comes from business financing, government-led capital, private flows and foreign investment," he said.

Li said that the investment will go into infrastructure, emerging industries and green construction.

The State Council designated Shanxi as a pilot reform case for an economic resources development area in December. The provincial government proposed an overall development plan eight months later and is now awaiting final approval.

Li said usually it will take one to two years to get final approval, and the central government will send experts and analysts to Shanxi for research before releasing a final report.

"Shanxi will become a manufacturing base especially for coal production, the rail industry and heavy-duty trucks, as well as the energy sector, within five years," Li said.

However, experts said that as a resource-rich province, Shanxi must still depend on its energy sector to boost its economy.

In February, a group of State-owned enterprises went to Shanxi seeking business opportunities. Most of these enterprises focused on coal-fired power plants, coal chemistry, coalbed methane and the wind power industry.

"The energy development mode, centered on rich coal resources, cannot be changed soon in Shanxi," said Ling Zhengce, vice-chairman of the Political Consultative Conference of Shanxi province.

"During the next five years, Shanxi should continue developing the traditional energy industries and at the same time, seek to develop new energy including coalbed methane, coal gas, coal oil, solar power, wind power and biomass energy."

According to the local government, as of the end of 2010, Shanxi's installed power generation capacity was 47 million kilowatts (kW), with 15 million kW delivered outside the province.

Ling said Shanxi will have 50 million kW in new installed power generation capacity, with 30 million kW intended for outside delivery, during the 12th Five-Year Plan (2011-2015).

The local government will also accelerate the construction of high-capacity power networks to send electricity to Shandong, Jiangsu, Hunan and Hubei provinces.

Ling said that by the end of 2015, annual coalbed methane production in Shanxi will reach 15 billion cubic meters (cu m), and Shanxi will become the country's biggest coal oil production base with an annual output of 6.4 million tons.

According to Li, Shanxi has 10,000 billion cu m of coal-bed methane reserves, accounting for one-third of China's total.

Jiao Yuanchao, vice-mayor of Harbin, capital of the northeastern province of Heilongjiang, said that all cities and provinces built on energy must find an appropriate way to sustain growth during their economic transitions.