China's efforts to revitalize the old industrial bases in the northeast are focused on the innovation of state-owned enterprises (SOEs), not simply granting financial assistance and favorable policies, said a senior government official Wednesday.

In the 2005 proposal to further revitalize Liaoning, Jilin and Heilongjiang provinces, innovation is highlighted, said Zhang Guobao, in charge of the Leading Group for Revitalizing Northeast China and Other Old Industrial Bases.

This year, China will push forward the "strategic restructuring" of state-owned sector, "accelerate the efforts" to reorganize SOEs into joint stock companies, and encourage the participation of private capital, said Zhang.

Private capital has played an active role in the northeastern development. In 2004, non-state investment increased 55.8 percent in Liaoning, 41.1 percent in Jilin and 34.5 percent in Heilongjiaing. The three northeast provinces actually used 5.94 billion yuan (some 720 million US dollars) of foreign investment with a year-on-year increase of 83.6 percent, much higher than the national average.

Source: Xinhua