While east and south China have developed primarily as export-based manufacturing centres, Beijing and northeast China represent two quite different aspects of China’s macro-economy.
The capital is of course China’s brain, with the greatest political clout. This is where the big decisions are made, and increasingly foreign companies are seeing the benefi ts of a base here, to be close to policymakers and to influence law-making during the drafting stages. The city is also undergoing a renaissance and regeneration ahead of the 2008 Olympics, an event that could be a watershed for the country, marking the end of its fi rst phase of “reform and opening up” begun a generation ago by Deng Xiao Ping. Equally, Tianjin, the second great metropolis of the north, is developing as the area’s modern manufacturing base and most signifi cant port. It includes some of the most signifi cant development zones in the region, notably TEDA, and also has plentiful supplies of land and labour at reasonable costs.
Northeast China, on the other hand, is a region that has been rather “left behind” in the country’s recent drive for growth. It was the national centre of heavy industry and served as the engine for national reconstruction in the 1950s. At that time, China poured enormous resources from all over the country into the northeast to develop heavy industry and products from the region were distributed to other regions under the planned economy. In the early stages of “reform and opening up”, Liaoning’s GDP was twice that of Guangdong.
Now Guangdong’s is double that of Liaoning. The signifi cance of the northeast fell back as the PRD and YRD received greater government attention and financial support in the 1980s and 1990s, and the area gained the unfortunate epithet of “China’s rustbelt”. For a region that has been used to the planned economy, the process has proved to be rather painful as it failed to adapt to new market conditions. Factories registered huge losses and went bust, workers lost the protection of corporate welfare, the so-called “iron rice bowl”, and social problems ensued.
