China is facing an internal brain drain from its northeastern Rust Belt, as economic woes compel the region’s young, educated workforce to seek jobs elsewhere. Financial Times:
North-eastern China is facing a demographic crisis as educated millennials abandon the industrial heartland, the country’s worst-performing region.
Planning officials revealed this month that the economy of Liaoning, one of the three northeastern provinces, had shrunk 2.2 per cent in the first nine months of the year — the largest regional contraction in China in seven years.
The depletion of the educated workforce has “worried” the central government, according to Zhou Jianping, director of the office in charge of transforming the north-east’s economy at the National Development and Reform Commission. “Most of the people who left that region are elites, at the management level or the backbone of production lines,” Mr Zhou said.
Beijing certainly has reason to worry. The mass exodus of young people from the northeast threatens to dry up the talent pool in a beleaguered region that China has been trying desperately to revitalize. And as more and more young people depart, they leave behind an aging population with fewer social supports. Not only will aging workers lose family members who might have helped take care of them; they also face a pension crisis that looms nationwide but has already hit the steel mills and industrial enterprises of the northeast with particular force.
China’s Rust Belt is a key testing ground for Beijing’s attempts to transform the state-run, manufacturing-heavy economy of the past. China’s economic slowdown has hit the industrial northeast especially hard, underlining the need to reform inefficient state companies and transition to a service economy. China has also faced international pressure to scale back its coal and steel production, with the West punishing China for dumping its excess steel in international markets at low prices.
Still, Beijing has few good options when it comes to reforming the region’s overstaffed and debt-ridden state enterprises. Efforts to lay off workers, shift to private management or retool pension obligations have been met with major protests. Lately, the government has poured cash into the northeast as stimulus, and the authorities are pushing a new private bank to boost growth and investment. It isn’t clear, however, that such top-down efforts can succeed in revitalizing the region. For now, young people are still voting with their feet.