Economic review

Coal cities get $310 mln ADB loan

2017-12-06 15:32:00 (Beijing Time)         Global Times/Agencies

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Region still struggling after mass layoffs

Four cities in Northeast China have secured a loan of $310 million from the Asian Development Bank (ADB) to revitalize their economies, the bank said on Tuesday, two years after mass layoffs at local coal mines.

The cities of Hegang, Jixi, Qitaihe and Shuangyashan - all in Northeast China's Heilongjiang Province - were the major casualties of a 2015 decision by State-owned Longmay Group to slash coal production, close depleted mines and lay off as many as 100,000 local workers, as part of nationwide efforts to tackle overcapacity and shore up prices in the sector.

The ADB loan to the four cities will be used in a project worth a total of $1 billion that is designed to support the development of small to medium-sized enterprises and help tackle environmental damage caused by decades of coal mining, the bank said in a statement.

The European Investment Bank will contribute $220 million to the project - scheduled to be completed in early 2023 - and local banks and government departments another $491 million.

The ADB said the Heilongjiang project would provide support when it comes to mobilizing domestic financing for small to medium-sized businesses, allowing the private sector to create more jobs and play a bigger role in the local economy.

Despite a dedicated "rejuvenation" project launched in 2003, China has struggled to breathe life into the industrial provinces of Heilongjiang, Liaoning and Jilin, which have depended on State-run heavy industries like coal mining, steel or electrical equipment.

Billions of yuan of State funds have been spent on revamping the region's infrastructure, building high-speed railways, highways and airports, but the three provinces have remained among China's slowest-growing regions. Efforts to stimulate the private sector have also been unsuccessful.

In the first three quarters of this year, the GDP figures of the provinces in Northeast China showed some signs of improvement.

During the period, the growth rates of Heilongjiang, Jilin and Liaoning registered 6.3 percent, 5.7 percent and 2.5 percent, respectively, according to a report from domestic news site ce.cn.