[Biweekly Symposium] No. 586: What Is Wrong with the Economy of Northeastern China.
Lecturer: LIU Qihong
Commentator: ZHAO Shirong, ZHOU Fangsheng, RONG Jian, DING Li
Dr. LIU Qihong started with an internal review by the Xinhua Net titled “Investment Goes no Further than Shanhaiguan”(《投资不过山海关》) which led to several direct instructions from President XI and Premier LI. These instructions led to a comprehensive investigation in the economic and political situation in the three Northeastern provinces. Dr. LIU was in one of the investigation team that was assigned to do this mission.
Dr. LIU thought there were four stages for the development of Northeastern China, namely the resource exploitative stage(1895-1945), heavy industry stage(post 1945), recession adjustment stage(1978-2002), and the rejuvenation stage(post 2003). He stressed the importance of getting a thorough diagnosis before prescription for the problem in order to break the vicious circle. He pointed out that the economy there was mainly state owned, and there was a cluster of heavy industry and mining. When it comes to urban development, Northeast China shows a lack of innovation and creative industries. There is a reliance on state-owned enterprises, and natural resources. As prescription, Dr. LIU thought seven issues needed to be addressed: 1. A thorough valuation of the resources according to the the changes of competence, and the market; 2. Investment in new and innovative industries instead of reinvesting in the conventional industries; 3. Nurturing an environment of entrepreneurship and innovation; 4. The principle of subsidiarity needs to be restated where decisions are made in the lowest level; 5. A mass adjustment of administrative zones needs to be undertaken; 6. Taking lessons from the coastal areas when it comes to governance; and 7. Promoting entrepreneurship.