June 2005
Grim Northeast: Polishing Up The Rustbelt
The Northeast revitalisation programme, launched with much fanfare in 2003 as the solution to the long-festering problems of China’s old industrial rustbelt provinces (Liaoning, Jilin and Heilongjiang), is a very different affair from the previous grand regional development plan, the Western development scheme launched three years earlier. The focus of the Western programme was lavish infrastructure spending. The goals of Northeast revitalisation are structural: industrial diversification, state-sector reform, and encouragement of the stunted private sector. Unfortunately, a centrally-led, state-planning bias means that costly rescues of capital-intensive state enterprises will take precedence over initiatives to boost labour-intensive private businesses. As a result, growth in the Northeast will likely lag that in the coastal regions for years to come.
Also in this issue:
Calla Wiemer examines the prospects for a more liberalized renminbi
Chris Torrens wonders when private consumption might become an engine of economic growth
Tom Miller suggests investing in budget-priced hotels