China Encouraging Use Of  Locally Made Machinery Products

SHANGHAI, China (AP) - China plans to nurture globally competitive machinery manufacturers by encouraging use of locally made products and controlling foreign investment in the industry.

A Cabinet document published by state media Thursday singles out machinery for shipbuilding, high-speed trains, precision machine tools and power generation as areas to be built up.

''The companies will be strengthened in their ability to produce major machine items using their own intellectual property, in order to meet the demands of the energy, transportation, resources and defense sectors,'' the State Council, China's cabinet, said in a document published by the Xinhua News Agency late Wednesday.

The government will encourage the purchase and use of China-made equipment in key projects, it added.

The plan reflects China's ambitions to be an industrial superpower: Beijing has long emphasized its determination to keep state control of strategically important industries, while building up key sectors to compete internationally.

At present, the factories of both foreign invested and domestic manufacturers are chock full of machinery imported from Japan and Germany. China's planners, keen to follow its neighbors' lead in moving up the ''value-added'' ladder, has set its sights on developing its own top-notch industrial infrastructure.

''Our country's machinery industry is weak in innovation and heavily reliant on foreign (involvement), the industry's structure is irrational and it is not internationally competitive,'' the National Development and Reform Commission, the main planning agency, said in a statement posted on its Web site.

In keeping with China's penchant for setting precise targets and timetables, the Cabinet said the plan was to reinvigorate the industry by 2010.

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