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Privately-run enterprises are encouraged to participate more in reviving the old industrial base, Northeast China Liaoning Province officials said yesterday.

"Individually-run companies are being asked to engage in reforming State-owned enterprises (SOEs) and the public service sector by providing them with many preferential policies,'' said Lu Xin, deputy governor of the province.

Public service sectors, including gas and water services, hospitals, and schools, are all open to private firms.

Enterprises taking on important projects can get tax breaks and special loan privileges, Lu said.

As the leading town in the nation's old industrial base, Shenyang has spared no effort in recent years to push development of non-State-owned enterprises, especially privately run companies. Individually-run enterprises contributed up to 45 per cent of Liaoning's gross domestic product (GDP) last year, statistics show.

"We would try our best to help here because we will suffer more if (businesses) fail here. We cannot afford the consequence if outsiders think this is not an appropriate area for investment,'' said Wen Shizhen, secretary of the Liaoning Committee of the Communist Party of China. He was speaking in the a meeting with elite domestic entrepreneurs.

"We all believe that there is great potential in the region but individually-run enterprises like ours will only invest in the area if we can profit handsomely and safely, said Liu Yongxing, chief executive officer of East Hope Group.

"If Shenyang should help one or two of its own individually-run enterprises grow into the leading companies in China, I believe this would be much more persuasive than any promise or preferential policies,'' said Wang Wei, CEO of China M&A Management Holdings.

Wang said that Shenyang should not only focus on those medium and big enterprises, but the small-sized enterprises.

"All big companies grow from small ones,'' Wang said. "The successful example of Zhejiang Province tells us small business endeavors are the hope for the future.''

And he also suggested that Northeast China should set up a regional organization to enhance communication between SOEs and private enterprises in the south, since many enterprises now do not have the capacity to obtain effective information.

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