Transcript Cooler China Based on the 2014 International Special Interest

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
Totals
Population
(m)
44
28
38
110
GDP
(nominal £bn)
250
110
140
500
GDP / head £
External trade
(£bn)
5500
80
4300
24.5
3500
28
122.5
Land area
(‘000km2)
146
187
455
788
Liaoning province
Shenyang
Dalian
Liaoning province
Jilin province
Changchun
Heavenly Lake 2470 metres
Changbaishan National Nature Reserve
Jilin province
Heilongjiang Province
Harbin
Songhua River
Heilongjiang
Daqing – world city?
High speed trains
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 fastestgrowing 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/21637449after-promising-signs-renaissance-chinas-oldrustbelt-suffers-big-setback-back-cold?