Illustration: Luo Xuan/GT
A fall in population has sparked renewed concerns over the economic revival of Northeast China (
Dongbei). Some are even using the term 'exodus' to describe the demographic situation, warning that dwindling labor resources could hinder the region's recovery.
One source of evidence for these concerns is the regional birth rate (births per woman), which is far below the 1.5 national average - the rate is 1.0, 1.03 and 1.03 for the three Northeast provinces of Liaoning, Jilin and Heilongjiang, respectively. Another source of evidence is the net outflow of the local population. More people are leaving Northeast China than are moving there, with an estimated net outflow of about 2 million each year, according to the Sixth Census in 2010, despite a recorded net inflow of 0.36 million people into the region in 2000.
Although there are no recent official figures, there can be little doubt that there is still a net regional outflow of people from Northeast China. I suggest we look into the reasons behind such a phenomenon. We should take a positive approach to the data and analyze possible benefits for the region.
Generally speaking, population growth is often a key indicator of economic and social well-being. Population loss, on the other hand, often signals weak economic conditions in the community. However, this was not the case in Northeast China, at least not in the 10 years between 2003 (when the Northeast Revitalization Campaign was initiated by the central government) and 2013. During that period, the region outpaced China's national GDP growth, even though its population kept dwindling at the same time. Even in 2013, the average GDP growth for the region was 8.43 percent, above the level of 7.7 percent for the whole country.
Growth slowed in 2014, but recent regional data indicates that the economic situation is improving, which does not support the argument about a correlation between population loss and economic growth.
So why is it that the population decrease is not causing a decline in economic development in Northeast China? It is partly because of the overall strength nurtured during the region's boom years that has enabled it to cope with its dwindling population. Being China's heavy industrial base, Northeast China still boasts unparalleled capabilities in terms of iron and steel, oil, petrochemicals, shipbuilding, machine tools, robots, aviation, and automobile manufacturing. It is also less reliant now on State-owned enterprises.
Other factors supporting the survival include urbanization, mechanization and automation, with qualified staff supporting regional development while excess labor is moved into other areas.
For example, Heilongjiang Province has always been known as China's granary, and it still is, but with less people working as farmers nowadays. As modern farming needs a lower amount of people than before, more and more villagers have been moving to cities, which in turn has created a new labor force for urban development. With technical innovation comes mechanization and automation, which saves labor, energy and materials and improves quality, accuracy and precision.
While the relationship between population loss and regional economic growth is uncertain, studies by the World Bank have found that migration can have a positive effect on household consumption and income growth. That is why China's government still encourages internal migration. No matter what the pessimists think, more efforts will be made to alleviate obstacles to internal migration. It is anticipated that China's migrant population will reach 300 million by 2030, compared to 254 million in 2014, and the country will reach an urbanization level of 70 percent, with about 230 million people moving to cities from villages.
As to the low birth rate, the central government seems to be less concerned about this. The
National Health and Family Planning Commission recently reaffirmed that there is no timetable for the relaxation of the existing second-child policy, which allows couples a second child if one of the parents is an only child in his or her family. It is believed that China can easily reverse the undesirable impact of an ageing population by completely lifting the one-child-policy whenever necessary, even though it might take time.
The population decline in Northeast China at the moment is really not a decline, but a demographic transition and an internal migration instead. And when the decrease does become a loss, it is for the benefits of the migrants and in the interests of the people.
In China's history, Northeast China has experienced large scale migration several times, with one in the early Qing Dynasty when ethnic groups from the region swarmed into Beijing and other areas in the hinterland of China. Another such occasion was in the early 19th century when migrants from Shandong Province came to Northeast China to pursue a new life. Hopefully, the next one will come soon, when people all over China will move to this area to enjoy their lives.
The author is professor and head of the Department of Finance in the School of Economics at Shenyang University, and visiting research scholar at Oxford University and Cambridge University. He is also a member of the Professional Board of the International Valuation Standards Council. bizopinion@globaltimes.com.cn
