Cities based on resources to diversify to build strength

How to seek further and better development for resource-based cities in Northeast China's Heilongjiang province has become a big concern, according to a meeting during the annual session of the National People's Congress.  [Special coverage]

The resource-based cities cover 60 percent of the province's area, have 40 percent of the province's population and contributed 54 percent of its GDP in 2013. However, energy industries in the province increased only by 0.1 percent last year, compared with a gross industrial growth of 7 percent, according to Lu Hao, governor of the province.

Two of Heilongjiang's four coal-based cities had a decline in GDP in 2013, said Zhang En'liang, mayor of Qitaihe, one of the four cities.

Qitaihe's economy dropped by 14 percent last year and 30,000 people lost their jobs in the city, which has a population of 920,000.

On the other hand, two of the other cities saw growth of about 1 percent last year.

To make things worse, tough times for the coal industry will last for a while due to expected continuing stagnation in the market, said Zhang, who also is a deputy to the NPC.

Xia Lihua, mayor of Daqing, a city that is one of China's biggest bases of oil output, suggested that resource-based cities will achieve sustainable development only if they switch to a diversified developing model.

The State Council issued a national sustainable development plan for resource-based cities in December. It aims at tackling problems that such cities face, including over-exploitation, unreasonable structure and undeveloped alternative industries.

Some believe that tax reduction or exemption is needed by resource companies to ease mounting pressure.

Zhang Sheng, board chairman of Heilongjiang Longmay Mining Holding Group Co Ltd, is among them and is anxious to find ways to reduce the burdens.

The group's revenue from the coal sector dropped to 21 billion yuan ($3.4 billion) in 2013 from 27 billion yuan in 2011, but it paid a total of 14.4 billion in taxes during those three years, according to Zhang, who also is a deputy to the NPC.

The huge expense of covering the pensions of a large number of retired employees adds to the burdens, he said.

"We hope our social responsibility can be shared by the government," said Zhang, whose group has 250,000 employees.

Besides cutting costs, such resource-oriented companies are being urged to invest more on resource processing sectors to increase profit and produce added value.