Since 2004, the central authorities of China have been actively trying to revitalise the Northeast region of China, but their efforts have not been sufficient to prevent Northeast China’s decline. According to the provincial economic ranking for 2016, the provinces with the lowest nominal growth were all from the north. There were five provinces with nominal growth rates of less than 5%, namely Shanxi, Heilongjiang, Xinjiang, Inner Mongolia, and Jilin. The growth rate for Heilongjiang was even lower; only 2%.
According to ANBOUND’s chief researcher, Chen Gong, the real solution to the Northeast economic problem is to go with the flow of the market economy by making policy choices that are in line with the trends of the market economy. From his perspective, there are three problems that need to be solved: a change in concept, reforming the government, and reforming state-owned enterprises.
The backwardness and lack of awareness amongst the people are probably the main reasons of Northeast China’s declining economy. Looking at the country as a whole, the north-eastern region has stronger planned economic concept compared to the northwest region. Most places in the northwest region are still poor and lack the necessary resources to develop. The north-eastern region, on the other hand, is moving backwards due to the society’s conservative thinking, a large number of traditional state-owned enterprises, and a community that is constantly opposing the concept of a market economy. Such backwardness hinders the development of market economy, will consequently affect government services, and will cultivate an environment that is unconducive for the market. Based on our research, there are major differences in principles between the private enterprises in the north-eastern region and those in the southern region.
Reforming the government is a challenge that must be faced and overcome in order to revitalise north-eastern China. The economic development of many provinces, such as Shenzhen, Zhejiang and Shanghai, benefited from the government’s self-reforming efforts. What is the key to the reformation of the government? The key and core lies in the people, their concepts, and their socioeconomic mechanisms. Based on our research and our experience in the north-eastern region, the north-eastern government still holds on to concepts from the previous centuries. Such concepts are at least 30 years behind that of the 21st century. Therefore, Anbound has been trying to promote the reformation of the government by suggesting the introduction of cadres from the field into the system.
The toughest part of revitalising the northeast region’s economy is the reformation of the state-owned enterprises. All this while, the northeast economy has been controlled by traditional state-owned enterprises. These state-own enterprises are not merely business, they are also a collection of institutions and people. These state-owned enterprises have gained a lot of economic resources from the revitalisation efforts, but they still failed to produce satisfactory output. To a large extent, these state-owned enterprises have been sucking up a lot of resources without providing much. To reform them is indeed very difficult and challenging.
Final Analysis Conclusion
For the past 14 years, revitalisation has failed not because of the lack of elements or resources, but rather because of the problems in the concepts, ideas, and reforms. Therefore, the thinking needs to change, there needs to be a focus on the core issues, and painful decision needs to be made to reform the communities’ thinking, the state-owned enterprises, and the government. Lastly, we should be committed to making policies that are in line with the market economy. Only then can we achieve a real breakthrough in the revitalisation of northeast China’s economy.
