China's northeast: From powerhouse to poor relation

China's northeast: From powerhouse to poor relation
PHOTO: AFP

The northeast was once China's industrial heartland and drove the country's development, but a decline in manufacturing and an economic slowdown have resulted in a rapidly aging society as young people move south to look for work and a higher standard of living. Zhou Huiying reports from Harbin.

During the last century, the northeast was one of the first regions in China to embrace industrialization. In the early 1950s, Heilongjiang, Jilin and Liaoning, the three provinces that make up the northeast region, were key areas for investment and construction, and attracted a huge number of migrants from across the country looking for work in the region's heavy industries.

During the first Five-Year Plan (1953-57) about one-third of 156 key projects built with the assistance of the former Soviet Union were located in the northeast, and the people of the region were proud to have created numerous "firsts", such as China's first jet aircraft, first 10,000-ton ship, first combined machine tool and first internal combustion engine.

The lustre has worn thin since those days. The region has been in decline since an economic downturn started in 1990. Huge numbers of workers have lost their jobs and the region's industrial output continues to fall in relation to the nation as a whole. The northeast has also been handicapped by a low fertility rate and large labour outflow, resulting in a rapidly aging society and hampering recovery attempts.

Last year, GDP growth in the three provinces ranked among the bottom five in China, and the average rate of growth was slower than in the central, western and eastern regions.

In 2010, China's sixth national census showed a net outflow of 1.8 million people, predominantly young or middle-aged, from the three provinces, as workers moved to better-developed areas such as Beijing, Tianjin and Shenzhen in Guangdong province. By contrast, in 2000, the northeast saw a net population inflow of 360,000.

New town, new life

After failing the gaokao, China's national college entrance exam, in 2001, Li Peng left his hometown of Hegang, a prefecture-level city in northeastern Heilongjiang province, and moved to Beijing. His family promised to help him find a steady job in Hegang, but Li, now 33, rejected the offer to return home and earn a steady income in a small city, describing it as his idea of "a horrible life".

He decided to soldier on in the capital. He lived in a 15-square-meter basement - his parents paid the rent - and changed jobs from fast food delivery boy to secondhand bicycle seller.

Things began to improve in 2008, when Li and a friend began selling camping equipment and other outdoor goods on Taobao, China's largest online marketplace. The same year, Li bought a pre-owned 56-square-meter apartment in the district of Daxing, again with help from his parents, who made the first mortgage payment. Seven years later, his online store has a stable customer base and Li earns about 300,000 yuan (S$65,000) a year, a substantial income in China.

He and his wife, a Beijing native, take two-week vacations in his hometown every summer and winter, but have no intention of moving there. "Although my wife enjoys the vacation every time we go back, I know she would never agree to live there. And, as I know, the economic condition of Hegang, which is reliant on the coal industry, is becoming worse every day. I don't know what jobs would bring us the same income we make in Beijing if we went back," Li said.

In the 1950s, coal miners earned high incomes and benefited from a raft of government welfare measures, so the job was popular among young people in Hegang. Today, the decline of the industry means fewer and fewer young people are staying in the city. According to data from the 2000 national census, the northeast region had the country's highest unemployment rate, with ex-miners accounting for the largest group of jobless workers.

"The pillar industries in the three provinces are strikingly similar and focus on the primary sector, including equipment manufacturing, petrochemicals and agricultural products," Feng Lei, an expert at the Chinese Academy of Social Sciences, told China Youth Daily in July.

"Given the industrial structure of the northeast, the decline in domestic investment and the drop in international commodity prices is bound to have a great effect on the three provinces, so it's no surprise they're experiencing an economic downturn," he said.

Feng said the region is being hit twice over because the depressed economy is accelerating the population outflow and the declining population is hampering economic revitalisation efforts.

The regional economy isn't the only thing affected by the population outflow, and other areas, such as education, are also suffering.

Universities in the three provinces are experiencing a severe shortage of students. Last year, 28,335 graduates were admitted to 50 colleges and research establishments in Liaoning, 2,259 fewer than the total enrollment plan for the province, according to a report published by China Education Online.

Moreover, an increasing number of graduates from the three provinces are opting to move to southern cities in search of work. "This phenomenon is obvious at our university. Not only do students from the south choose to return to their hometowns, but more northeastern students are heading south because they believe the economically developed areas can provide more job opportunities," said Li Lianying, a teacher who works at the Employment Guidance Center at Jilin University.

Family matters

The effects of the outflow of labour and talent are being exacerbated by a falling birth rate. Data from the 2010 census show that the figure was 1.03 per cent in Liaoning and Jilin, and 1 per cent in Heilongjiang, well below the national 1.5 per cent average, and lower than in Japan and South Korea. The UN's Population Division defines a birth rate below 1.3 per cent as "ultra-low".

At the end of 2013, the National People's Congress, China's top legislative body, adopted a central government proposal under which couples would be allowed to have a second child if one of the partners was an only child.

Heilongjiang implemented the policy in April last year, but so far just 6,484 qualified couples, accounting for 1.6 per cent, have obtained a second-child certificate, as opposed to the national average of 8.3 per cent.

Interest has also been low in Jilin and Liaoning. "Since March 2014, only 70 qualified couples, about one-tenth of the total in our community, have submitted applications," said Zhao Xin, an official in Yizhongmingcheng, a residential community in Changchun, the capital of Jilin. "I know that not everyone who gets the certificate really wants to have another kid," he said, with reference to couples who obtain permission simply to ensure they will be allowed to have another child at an unspecified time in the future.

Fu Cheng, a researcher at the Jilin Academy of Social Sciences, said a wide range of factors influence couples thinking of having a second child. "More young people nowadays prefer small families. Factors such as finances, housing, education and age are also involved in making these plans. Most young couples want to give their children favourable conditions to grow up in, which involves high financial outlay. Many abandon the idea once they understand the difficulties," he said.

Liu Chang, 31, has just returned to work as a journalist at a newspaper in Harbin after maternity leave. She definitely doesn't want another child. "Absolutely not. My husband and I made this decision after much consideration, including finances, energy, emotion and self-development," she said. "In the past half-year, we found it much more difficult to raise a kid than we ever expected."

Liu's husband is a civil servant, and their combined monthly income is about 7,000 yuan, a reasonable sum in the city, but the birth of their daughter brought severe financial pressure. "We spent about 30,000 yuan alone on obstetric examinations during pregnancy and the natural birth of my daughter," Liu said. "That's about average in this city, but I know some families who paid several times more than that."

Furthermore, as an only child herself, the 30-year-old isn't certain she would be able to deal with the relationship between two children. "Recently, I have read several reports about how an older child refused to accept the truth that they would soon have a younger brother or sister," Liu said. "It really scared me when I learned that some kids had threatened to end their own lives if their parents decided to have a second child."

Age concerns

All of these factors have led to a seemingly intractable problem for the three provinces - a rapidly aging population that is not being replaced.

According to data compiled by Luo Dandan, a researcher at the Heilongjiang Academy of Social Sciences, by the end of 2012 the province was home to nearly 5.7 million people age 60 and older, accounting for 14.8 per cent of the population and three times the number in 1995.

The Heilongjiang Population and Family Commission estimates that the proportion will hit 19 per cent by 2020, before rising to more than 33 per cent by 2045. By contrast, economically advanced provinces are aging more slowly: By the end of 2012, only 7.06 per cent of the population of Guangdong province - ranked No 1 in terms of GDP last year - was aged 65 and older, equivalent to the situation in Heilongjiang 10 years ago.

In the face of the decline, the three provincial governments have been implementing a range of measures to keep the "floating population", especially talented young people, in the region.

In a bid to retain more talent, the Heilongjiang government released a cash subsidy policy in March for people with master's degrees and doctorates who opt to study at public institutions that urgently need talented newcomers.

In May, the province published a policy to encourage university graduates to start their own businesses, and provides 100 million yuan in financial support annually. All three provinces have now implemented policies to create jobs or help business startups.

In Changchun, the government has adopted a series of measures that guarantee migrant workers the same employment, medical, education and housing rights as native residents, and community staff have been registering members of the floating population to ensure they will qualify for assistance.

"We discovered a family from Anhui (province) that was in serious financial difficulty. It was a middle-aged couple who could only do a few odd jobs and had no stable income, but they had to spend a lot of money on study materials and nutritional supplements for their son in secondary school," said Chen Yawei, an officer in Xichaoyang, a residential district in Changchun.

When they learned about the family's situation, the community staff tried to help them find better-paid jobs and provided assistance for them to apply for subsidies, which helped them get through their difficulties.

"In this way, we hope the members of these floating populations will identify as permanent residents and see Changchun as their new home, instead of just being visitors who are passing through," said Chen.

Liu Ce and Han Junhong contributed to this story.

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