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UPDATED: March 10, 2009 Web Exclusive
Jiangxi: Pain of Financial Crisis
Jiangxi's industrial sector hopes to weather the financial crisis with government support

Chinese Premier Wen Jiabao's government report to the annual session of the 11th National People's Congress (NPC), China's top legislature, says that China will focus on improving industrial restructuring in order to maintain economic growth and promote industrial upgrading. He also identified 10 industries - automobiles, steel, shipbuilding, petrochemicals, textiles, nonferrous metals, equipment manufacturing, information technology, modern logistics and light industries - that will be adjusted and reinvigorated this year through stimulus measures. Tu Qinhua, an NPC deputy and head of the Jiangxi Provincial Industry and Information Technology Committee, told Beijing Review that the Central Government's stimulus plan for these 10 industries is very important to Jiangxi's development, considering the pressure the financial crisis has put on provincial enterprises.

Tu said Jiangxi is transforming from an agricultural economy to a modern industrial one. Recent years have witnessed rapid industrial growth and development of certain industries, especially industries where the province enjoys comparative advantage. With mines of nonferrous metals that are the envy of the country, Jiangxi has given up its old model of exporting copper, tungsten and rare earth minerals as raw materials and started to develop a nonferrous metals processing industry. In addition to the nonferrous metals industry, Jiangxi's auto industry will also benefit from stimulus measures. Jiangling Motors Corporation, Changhe Automobile Co. Ltd. and Shangrao Coach Factory are major automobile companies in Jiangxi that are expected to grow dramatically this year due to the incentives contained in the national industrial restructuring and rejuvenation program. Moreover, Tu said that since Jiangxi's economy relies less on exports compared with other provinces, the adverse impact of the financial crisis on Jiangxi would be moderate. However, Tu admitted, "Jiangxi has already felt pressure caused by the shrinkage of export-oriented factories in coastal provinces, as well as competition in the domestic market from companies based in the middle and western areas of China." The local government has taken measures to increase the marketing efforts, raise companies' competitiveness, conduct technical upgrades on enterprises and restructure traditional industries with advanced technology to alleviate economic pressure.

Lu Yonglan, an NPC deputy who works for Haiyang Textile Group, a large textile company in Jiangxi, told Beijing Review that thanks to the local government's incentives and assistance, her company has not laid off a single worker although both labor and management salaries have dropped slightly. To protect rural migrant workers' rights, the company is giving them money for their insurance premiums in cash. Lu hopes that the Central Government will further relieve the tax burden on the textile industry so that companies with low profit margins can survive the economic slump.

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