China’s ailing rust belt struggles to shake off reliance on state support
The former industrial heartland of northeast China is still struggling to move on from the old economic model of heavy industry backed by the government
The Tiexi industrial district in the northern Chinese city of Shenyang, once the face of China’s all-powerful state economy, has taken on fancy airs with its high-rise residential buildings, shopping malls and glittering office towers.
Gone are the chimneys belching smoke and the roads blocked by laid-off workers – a daily sight 15 years ago – and the land has been sold cheaply to developers
However, this gentrification in the capital of Shenyang province thinly veils the ongoing problems across China’s northeastern rust belt.
The Manchuria region of 120 million residents remains plagued by deep-rooted economic ills, including the continued reliance on inefficient state spending, the absence of private investment and a rapidly ageing population, analysts said.
Almost 15 years after Beijing decided to “revitalise” the region, its three provinces – Heilongjiang, Jilin and Liaoning – continue to post the country’s weakest growth rates.
Liang Qidong, the deputy head of the Liaoning Academy of Social Sciences, a think-tank owned by the provincial government, said northeastern China, an area about the size of France and the United Kingdom combined, has “the most extensive planned economy in the world” and is struggling to find a way out.