Bo Xilai is probably the best salesman for Liaoning Province.

When asked what brand of clothes he fancies, the Liaoning governor replies that he prefers Chuangshi from the Dalian-based Dayang Co, adding that its English name is Trands. "It started as a small town-and-country business about 20 years ago, but now it has partnerships with Italian suit makers. And it is a private company," Bo emphasizes.

Bo Xilai, governor of Liaoning Province. [newsphoto.com.cn]

Governor Bo Xilai is on a mission to transform China's Rust Belt into another economic hotspot. Specifically, he needs to attract outside investors and create thousands of businesses that, like Dayang, can help ameliorate the almost suffocating unemployment problem.

After fielding questions from an endless parade of reporters for a whole day, Bo Xilai displays not a trace of exhaustion or impatience. "This trip actually started eight days ago when we departed for South Korea and then went on to Singapore and Hong Kong," Bo explains. He attributes his energy to the good health and good spirit seemingly inherent in "northeasterners" (dongbeiren).

"Ten years ago when I made my first trip to Hong Kong, we drew US$2.8 billion in investments for Dalian," recalls Bo Xilai, who was then mayor of the seaside city. "Now, half of the new buildings there have been financed by Hong Kong capital."

The governor explains that money from Hong Kong, which is often lumped together with Taiwan equities, accounts for about one-fourth of Liaoning's foreign investment, second only to Japanese and Korean contributions. "Hong Kong businessmen used to be afraid of the chilly weather in Liaoning, but nowadays it is getting warmer everywhere," he jokes. "Cold places are becoming more attractive."

Throes of premature ageing

Liaoning Province, one of the three provinces that comprise China's Northeastern Region, is the nation's rust belt, with a high concentration of such heavy industries as steel and coal production, shipbuilding and various forms of machinery manufacturing. When China entered the era of the market economy, Liaoning suddenly found itself out of tune with the times, crushed as it were by mammoth State-owned enterprises, beset by outdated facilities and a bloated workforce.

As succinctly summarized by Premier Wen Jiabao, Liaoning's problem is "over-reliance" on "one" sector. But steering the gargantuan ship back into the slipstream of market orientation required tossing millions of surplus labourers overboard. The break up of the "iron-rice bowl" was so painful that, when Governor Bo recalls it, his voice takes on a melancholy tone. "When those people who had worked all their lives - more than 1.6 million of them - signed for the termination of their employment, many had tears in their eyes. I felt so touched by their sacrifice and also a strong attachment to the Liaoning people."

Bo Xilai compares Liaoning to the eldest brother in a family, "the one who had to work hard to help raise all the younger siblings and ended up looking much older and more fragile than his real age". The governor recounts that in the early years of reform, the average income of Liaoning residents ranked among the top five in the nation - now it ranks 19th. "Places like the Pearl River Delta are like a young man. It only needs to look forward. But Liaoning has to look both forward and backward. We cannot leave behind the less fortunate.

"For three years we organized poverty-relief drives. All civil servants donated one to two months of their salaries. I remember an old gentleman who himself had five sons to raise, and he contributed 200 yuan (US$24)," he recalls.

To catch those falling through the erstwhile safety net of cradle-to-grave employment, Bo Xilai has been scrambling to establish policies that help create new jobs. In 2001, some 830,000 of the unemployed found work; in 2002, the number reached one million. "And this year we have got as far as 800,000. But there are still 1.6 million mouths to feed," says the governor.

Costly legacy 42 million: popuation of Liaoning Province; 10 million: approximate number of employees in State-owned enterprises, which is fast decreasing; 3 million: number of retirees from State-owned enterprises now racking up a massive pension bill for the government; 970,000: number of people officially categorized as unemployed; 1.6 million: still waiting for employment; 1.65 million: number of people who receive minimum-income social security.

As a matter of fact, the province can only produce 400,000-500,000 new full-time jobs this year, but that has not prevented him from coming up with alternative arrangements, such as part-time jobs, to help ease the plight of the unemployed. "In the next five years, we'll have to create around 700,000 new jobs each year to reduce the jobless army," Bo states.

Another means of bringing hope to the suffering masses is to reduce an onerous debt burden. As Bo explains, much of the debt was incurred by State-owned security firms that sprang up in the early years of reform. As they went bust, many of the investors were left empty-handed. The government has to take over the responsibility of paying back these individuals, who may also be the victims of corporate restructuring. "If we don't help them, they will find themselves in even more desperate situations," he empathizes.

In the past two years, the government has repaid 13.3 billion yuan (US$1.61 billion), but there is still 8 billion yuan (US$966.5 million) more to go. And the governor asserts he will see to it that every penny is returned.

However, as he acknowledges, not everyone is satisfied. There are cases disenfranchised groups taking their complaints all the way to Beijing. Surprisingly, Bo Xilai is not bitter when discussing the actions of these people, who do not seem to understand that the provincial government is doing all it can, or at least trying, to help out. Instead, he blames certain local officials for not having "an open mind towards economic reform".

Reviving a phoenix

The creation of large numbers of jobs relies on the infusion of large doses of outside capital. "Because that is something I enjoy doing, I don't feel tired at all," Bo insists. And his globe-trotting sales pitches have borne fruit. In the years before 2000, annual foreign direct investment averaged US$2.2 billion. But last year the figure rose to US$3.9 billion, and this year it is expected to jump to US$5 billion, topping off at US$6 billion next year.

Bo Xilai is confident that the Northeast will become China's fourth economic engine, after the Pearl River Delta, the Yangtze River Delta and the Beijing-Tianjin Corridor. "I'm not blindly optimistic. But more than 90 per cent of the new jobs are being created by the private sector, which is moving in a healthy direction. The sector as a whole employs 6.5 million people and accounts for 45 per cent of the province's GDP." He lists a dozen of the province's burgeoning private companies that have achieved national recognition as if he were describing the unique personalities of his children.

"On the other hand, our strength in manufacturing is an asset, not a liability, if we can turn these behemoths into market-driven entities," he enthuses. He cites oil refining, steel and shipbuilding as examples of industries in which Liaoning has an advantage and can excel. "The companies have the facilities, the technologies and the talent. So they can be made into pillar industries once again, together with new sectors such as IT, light manufacturing and the service industry. On top of that, our province has a very good infrastructure," Bo remarks.

According to Bo Xilai, investment in the education sector will play the greatest role in helping revive the economy. The province has 66 universities and colleges training half a million students. Every year, 100,000 graduates receive their diplomas. To strengthen the education system, he is moving many of the downtown campuses into the suburbs, using revenues from land sales to build larger campuses and better facilities.

Bo Xilai also believes an improved environment will make Liaoning a better, more attractive place in the eyes of both residents and investors. "In the past three years we have planted 2.4 billion trees on areas of wasteland, foresting an area 10 times the size of Hong Kong," Bo tells China Daily. "Five years from now, Liaoning will not only be a province known for its industrial might, but also renowned for its good environment.

"The size of our economy will double," he continues. "And contrary to what many people may think, Liaoning will not become a forest of chimneys, but a forest of trees, far more than what you have in Hong Kong," transforming the rust belt into a green belt.

Profile of a governor Bo Xilai, son of Bo Yibo, one of the first-generation Communist leaders, emerged as a political star while successfully steering the city of Dalian out of a prolonged economic slump and into a brighter tomorrow. Combining Western-style charm and old-fashioned people skills, he has carved out a niche for himself as a political leader who smoothly connects the province's past achievements and history with its future possibilities.  Born July 1949;  Attended Peking University in 1977;   Joined Communist Party in 1980;   Attended master's programme at Chinese Academy of Social Sciences in 1982;  Has been working in Liaoning Province since 1984, moving up the ladder from Deputy Party Secretary of Jinxian County and Party Secretary of the Jinzhou Region;   Assumed the post of mayor of Dalian in 1993 and governor of Liaoning Province in 2001.

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