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  • Gordon Dumoulin

China’s ‘ELDEST SON’ needs HELP from the FAMILY ! | DIFFERENT CHINA (ep 7)

The Northeast of China or ‘Dongbei’; the three provinces Liaoning, Jilin and Heilongjiang, has been the backbone or “共和国长子, the Republic’s eldest son” of the first industrial and economic developments in the last century. A rough region at the size Turkey or Chile (780,000 square kilometers) with long extremely cold winters and shorter hot summers, inhabited by approximately 110 million people. The region is also vital for its agriculture and is the Chinese barn for soybean, corn and rice.

During the past four decades, the Northeast region’s economic impact on China has drastically declined and its share of China’s output fell by more than half despite massive financial injections by the Central Government in the last 15 years. This article will provide more insight on the history, society and economy of the region as well as the new ambitious strategic plan, launched by the The National Development and Reform Commission (NDRC) to get ‘the Republic’s eldest son’ back on track with the rest of China.

 History & Society Northeast China

Northeast China (simplified Chinese: 中国东北; traditional Chinese: 中國東北; pinyin: Zhōngguó Dōngběi) is a geographical region of China. It also historically corresponds with the term Manchuria in the English language. It consists specifically of the three provinces of Liaoning, Jilin and Heilongjiang, collectively referred as the Three Northeastern Provinces (东北三省, Dōngběi sānshěng), but broadly also encompasses the eastern part of Inner Mongolia.

The major cities in the NorthEast are Shenyang, capital of Liaoning province and a center of heavy industries such as machinery, aerospace and defense; Dalian in Liaoning province, the major seaport for the NorthEast; Changchung, the major city in Jilin Province and called ‘the city of Automobiles’ due to its automotive industries; and Harbin, capital of Heilongjiang province, the furthest northern political, cultural and educational center of China with significant influences from Russian cultures. 

Throughout history, Northeast China was the homeland of several ethnic groups, including the Manchus (or Jurchens), Ulchs, Hezhen (also known as the Goldi and Nanai). Various ethnic groups and their respective kingdoms, including the Sushen, Xianbei, and Mohe have risen to power in the Northeast. Many Korean kingdoms have also risen to power in Manchuria during the past.

In 1644, the Manchu conquered the entirety of China and established the Qing dynasty (1644–1912). Northeast China came under influence of the Russian Empire with the building of the Chinese Eastern Railway through Harbin to Vladivostok. The Empire of Japan replaced Russian influence in the region as a result of the Russo-Japanese War in 1904–1905, and Japan laid the South Manchurian Railway in 1906 to Port Arthur. The last Qing dynasty emperor, Puyi, was then placed on the throne to lead a Japanese puppet state of Manchukuo. After the atomic bombing of Japan in 1945, the Soviet Union invaded the region as part of its declaration of war against Japan. From 1945 to 1948, Northeast China was a base area for the Communist People's Liberation Army in the Chinese Civil War. With the encouragement of the Soviet Union, the area was used as a staging ground during the Civil War for the Chinese Communists, who were victorious in 1949 and have been controlling this region since.

Northeast China has a total population of almost 110 million people today and the overwhelming majority of the population in the Northeast is Han Chinese, many of whose ancestors came in the 19th and 20th centuries during a migration movement called "Chuang Guandong" (闖關東, literally "venture into the east of the Pass"). Ethnic Manchus form the second significant ethnic group in Northeast China, followed by the Mongols, Koreans, and the Huis, as well as 49 other ethnic minorities such as Daurs, Sibos, Hezhens, Oroqens, Evenks, Kyrgyz.

The people in the North East are usually characterized as straightforward, honest and hard-working, appreciated by the rest of China although sometimes the edges are a little rough. A light-hearted stereotype description of ‘Dongbei’ people can be found in a poem by Kaiser Kuo ;

In Dongbei, whence the Manchus came, the men do like their liquor. While effusive with their friendship, with their enmity they’re quicker.

Though they’re honest and straightforward, at the slightest provocation; They’ll show why they’ve been slandered as the Klingons of this nation.

The leggy Dongbei ladies for their beauty are renowned, But they suffer from one drawback, and it’s very sad to tell; When they open up their mouths to speak, they break that magic spell.

 Industrial growth & decline 1970’s – 2010’s

The Northeast was one of the earliest regions to industrialize in China during the era of Manchukuo. After the founding of the People's Republic of China, Northeast China continued to be the major industrial base of the country, and has been hailed as "the Republic's eldest son" (共和国长子) since then.

In 1978, on the eve of Deng Xiaoping’s economic opening, Liaoning, the most populous of the trio, had the third-largest economy among mainland China’s 31 provinces with the largest makers of cars, aircraft and machine tools. Its GDP was 20% bigger than that of Guangdong, the southern province with the biggest population. But 40 years of rapid national growth have left the north-east lagging behind. By 2016 Liaoning had fallen to 14th among provinces by income and had only one third of Guangdong’s GDP. During the period 1978-2016, the region's share of China’s output fell by more than half.

Traditional Industry and Agriculture goes hand in hand in Northeast China being the most important source for soybeans, corn and rice in the country.

In 2003, the national government announced the ‘Revitalize The Old Northeast Industrial Bases’ program (振兴东北老工业基地) , a policy to rejuvenate industrial bases in Northeast China, covering the Heilongjiang, Jilin, and Liaoning provinces, as well as the five eastern prefectures of the Inner Mongolia province (Xilin Gol, Chifeng, Tongliao, Hinggan and Hulunbuir). The core of the program was to revitalize the region's traditional industry, while speeding up development in aspects of structural regulation, regional cooperation, economic reform, the construction of an environment-friendly economy, and increased efforts in education, healthcare, and cultural projects.

The program took care of vastly increasing state investment, which jumped from 30% of regional GDP in 2000 to 60% five years later. Even this was not enough. In 2016 the government released another 1.6 trillion RMB to revitalize the economy in infrastructure and industry. However the financial injections in industry, commerce and infrastructure did not meet the national government ambitions for reviving the region.

Although near the bottom of China’s league table of growth, the region’s GDP growth rate of almost 7% annually between 2011-2016 would be finger-licking for many regions across the world, especially for ‘rust-belt’ regions as the Northeast has been considered occasionally. It is not all glooming in the area, there are certainly lots of positive developments in the regional economy and society but the Northeast is facing tough comparisons to the developments in other Chinese provinces and high expectations from the National Government to keep up the status of being the Eldest Son.

 Why do the immense financial injections did not have the desired reviving effect ?

As other developing regions in China have economically benefited to a significant extent from the central government financial support, why didn’t the ‘eldest son’ show the economic progress and revival as in Southern and Western provinces ?

Three major causes can be noticed for obstacles and difficulties on the road to the modern China era;

The Northeast region is much more dependent on State-owned enterprises (SOE), compared to other regions. In China as a whole, approximately 17% of industrial jobs are in SOE’s. In Liaoning province the share is 40% and in Heilongjiang province even 55%. These enterprises are often far less efficient and regularly losing money in comparison with a higher concentration of private companies in the rest of China.

Secondly, the population in the Northeast is ageing rapidly, even by Chinese standards. At 39.2 years, Liaoning’s median age. The north-eastern provinces have an average fertility rate of below one which is the lowest in the country together with the metropolitan cities of Beijing, Shanghai and Tianjin. Many young and talented people are moving away in search for brighter futures in the East Coast or Southern provinces. For example, the famous Harbin Institute of Technology is one of China’s top engineering universities. Only 3% of its alumni stay in the province.

Thirdly, the Northeast has an unusually strong collectivist tradition and mindset, accustomed to and relying on government control and support. This is why the rate of people working in state-owned enterprises is much higher and there are far less entrepreneurs setting up new ventures, compared to other regions. It is a general saying in China that the dream of Northern Chinese people is becoming a government official or policeman while the Southern Chinese people are striving to set up their own independent business.   

These causes are naturally not supportive for the transformation towards the modern China era which is based on entrepreneurship, innovation, high-tech and environment.

 The new 2018 Northeast revival approach

Looking at the above causes and the fact that the major financial injections have not brought the desired results, the national government has decided to turn the page. The National Development and Reform Commission (NDRC), China's top economic planner, announced last month a new plan to revive Northeast China's economy by partnering its provinces and cities with counterparts in southern and eastern China.

It has been clear that money and infrastructure is not enough to get the ‘eldest son’ moving forward at the speed of the rest of China; a boost of cooperation, expertise and change of mindset must initiate the process towards the new era. So the ‘other family members’ (Southern and Eastern provinces) are encouraged and stimulated to assist and invest in this boost to get the Northeast back on their feet in pace with the miraculous economic and technology developments in China.

South China's Guangdong Province, East China's Zhejiang and Jiangsu provinces, are to cooperate and share resources with the three provinces in Northeast China. Competent firms in Guangdong are encouraged to participate in the reform by helping in the restructuring of State-owned enterprises (SOEs) in Heilongjiang. Zhejiang and Jilin provinces will work together on establishing government, business and social cooperation mechanisms over the next two years. And Liaoning and Jiangsu provinces will build joint industrial parks and encourage the use of cross-regional, public-private partnership model, and the establishment of investment funds, according the NDCR.

Separate plans were also published to establish partnerships between Beijing and Liaoning’s capital, Shenyang, and between Shanghai and the Liaoning port of Dalian. Tianjin will also team up with Changchun, the capital of Jilin.

A solid and well-thought ambitious plan; learned from past experiences and in line with collective responsibility to get all regions on track towards the future. There is much to learn from the wisdom of the current economic and political strategic moves in China.

“Different CHINA” is a series telling different sides of China which are lesser known to the world. China is well known through many publications for its miraculous speed of developments and growth in technology, environment, commerce, social structures and international standing with Chinese people embracing innovation while keeping tradition highly valued. But this image does not do full justice as China is so much more in its diversity, culture, environment, people and initiatives.  “Different CHINA” is part of 5iZ.

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