China’s depressed northeast is down but not out – if officials can fix its ailing state-owned firms

Yansong Wang says though now in a deep funk, the vast northeast was once an economic powerhouse, and can be again with the right policies

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Smoke billows from a factory in Heihe, Heilongjiang province. In the past few decades, China’s northeast has gone from being the country’s economic powerhouse to its most systematically troubled large region. Photo: AFP

Published: 12:08pm, 30 Nov 2016Updated: 7:30pm, 30 Nov 2016

Over the course of my 35 years, China’s northeast has gone from being the country’s economic powerhouse to its most systematically troubled large region. Much of the region’s enormous state-owned industrial complex is in difficulty, while gross domestic product growth continues to lag. The deepest and most poignant signs of the economic malaise are a falling population and the fact that the northeast’s birth rate is now one-third below the national average.

The concern about how to revive the economy animates not only the highest levels of the central government, but also many people who recall the key role the region has played leading China’s modernisation. The concern is warranted. It now needs to be matched by some fresh thinking and new policy initiatives. I’d like to see the northeast become a laboratory for bold ideas about how to restructure state-owned enterprises in China.

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I care deeply about what happens in the northeast. Though I now live and work in Shenzhen, I was born and raised in Jilin (吉林) province. My parents and 95-year-old grandmother still live there. I owe a lot of my life’s achievements up to now – undergraduate study at the University of Science and Technology of China in Hefei (合肥), followed by a PhD in physics from Princeton, to my current role in an international investment bank – to the mind-expanding public education I received growing up in the northeast.

Passengers look through the window on a bus in snow-hit Shenyang, capital of northeast China’s Liaoning province. The most poignant signs of the region’s economic malaise are a falling population and the fact that the northeast’s birth rate is now one-third below the national average. Photo: Xinhua

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The climate and its mainly landlocked geography are a challenge. But there is no reason the northeast should be a victim of its geography. The part of the US with the most similar conditions, the states of Minnesota, Michigan and Wisconsin, has successfully moved away from a focus on heavy industry to being a world leader in all kinds of advanced manufacturing and food processing. Great companies, including 3M, Cargill and Amway, all hail from this part of the US.

Could my home region produce its own world-conquering companies? I believe so.