Cooler China International Special Interest Group Study Tour to North East China 2014.
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Transcript of Cooler China International Special Interest Group Study Tour to North East China 2014.
North East China
3 provinces•Liaoning – Shenyang and Dalian (port and holiday resort)•Jilin – Changchun (cars) and Changbaishan National Nature Reserve•Heilongjiang – Harbin (“Russian”), Songhua Rover and Daqing (oil)
NE China Data
Liaoning Jilin Heilongjiang TotalsPopulation (m)
44 28 38 110
GDP (nominal £bn)
250 110 140 500
GDP / head £ 5500 4300 3500External trade (£bn)
80 24.5 28 122.5
Land area (‘000km2)
146 187 455 788
What future for China’s “Old Rustbelt”?
• 2014: slow growth rate 6%; 1.4 points below national average;
• Industrial output rose 0.5% year-on-year in October, far below the national average of 7.7%;
• Ranked in the bottom 5 of China’s 31 provinces.
History of the North East
• Rich in oil and coal, 1930s became industrialised under Japanese military control.
• Mao Zedong made it the heart of heavy manufacture.
• Decline in 1980s when China was opening up and other areas, Yangtze and Pearl river deltas were flourishing.
• Unemployment rose and mass protests spread as loss-making state-owned companies were closed or cut.
• 2003 plan to “revitalise the old NE industrial bases.”
• Transform factories; trade with nearby countries; new industries, from tourism to software.
• NE caught up with national growth (10%) and then pulled ahead (12.4% in 2008 – 2012, 3 points ahead of national pace) – China’s fastest-growing region.
• Recent sharp downturn since 2012 compared to rest of China.
“A deepening economic malaise”• NE reliant on investment and manufacturing, closely related
to now-slowing property market;• Car industry (NE was national leader) declining as foreign
cars are more popular than home grown ones;• Decline in service industries and investment;• Half finished buildings;• New homes not selling;• Over-capacity in heavy industry, e.g. cement;• Poor investment decisions – less money for social service;• Geography: relatively isolated; N Korea and sparsely
populated eastern Russia; tensions with Japan. • Investment by Japan and S Korea fell. • Birth rate low; ageing population.• Emigration; 2m residents working elsewhere in China.
The future?• Shenyang establishing as an airport hub for northern Asia;• Underground rail system for Shenyang;• Hope that NE industrial heritage will become a strength,
Shenyang Machine Tool Group (SYMG) is a good example.• Central government to the rescue again!• Construction of rail lines, airports and affordable housing,
support for high-tech industries, robotics to integrated circuits.
• State owned companies encouraged to sell stakes to private companies.
• “Letting Go“ – government must loosen their grip; companies must find their own solutions.
References
• www.economist.com/news/china/21637449-after-promising-signs-renaissance-chinas-old-rustbelt-suffers-big-setback-back-cold?