Reviving China's Rust Belt
This gritty city of decrepit smokestack factories is an unlikely center for economic rebirth.
Its heavy industries, once the darlings of state planning, are dying under market competition. In its old industrial warrens with block after block of shuttered factories, residents say seven out of every 10 adults are unemployed. Beyond the city, economists say, the economy of the northeastern region Westerners know as Manchuria has contracted even as the rest of China has boomed.
But across Shenyang -- even amid the rundown factories -- the old economy is giving way to a new one as China's leaders turn their attention and investment to the country's once written-off northeast industrial rust belt, creating an economic revival that is reversing the region's decline. Consumer-electronics makers, agribusinesses and biotechnology concerns are replacing the steelmakers and tractor companies.
A pillar of Chinese high-tech, the software maker Neusoft Group Ltd., improbably calls Shenyang home. A more traditional industry, auto making, is making a comeback. A joint venture between Brilliance China Automotive Holdings Ltd. and Bayerische Motoren Werke AG of Germany is to begin producing luxury BMW sedans this month. General Motors Corp. of the U.S. is renegotiating with partner Shenyang Jinbei Automotive Co. to revitalize their venture.
"No one believes Shenyang can be a good environment for investment. The winter is cold. The pollution is heavy. It's hard to attract people," says Liu Jiren, a former university professor who is a founder and chairman of Neusoft. But, Mr. Liu says, the same attributes that made Shenyang a linchpin of Stalinist planning also apply in free markets: a skilled, educated labor force. And wages, city officials say, are a third of those in Shanghai.
The nascent turnaround has implications that reach far beyond the rust belt. The region of 107 million was China's leading industrial base from the 1950s to the 1980s, providing much of the steel, coal and petrochemicals so cherished by state planners. Its state-industry workers were a privileged caste, enjoying guaranteed jobs and benefits. By reinjecting vitality to this once productive, but recently economically moribund, region, Beijing is laying a foundation for long-term growth sustained by domestic demand, instead of the exports and foreign investment China now depends on.
Renewed growth also may be curbing social unrest. Waves of labor protests starting in 1998 and culminating in mass street demonstrations last year in the nearby cities of Liaoyang and Fushun have subsided. Shenyang officials say the city hasn't seen a large labor protest in more than a year. Though they declined to provide statistics on previous demonstrations, by way of comparison they say labor protests have been eclipsed by rallies against urban-renewal projects, with two demonstrations in the past month.
New Leadership
The shift in focus is a hallmark of the new Chinese leadership, which during its first year in power has stressed economic fairness for workers and farmers whose incomes have lagged in this era of economic reform. Premier Wen Jiabao, who has visited the Northeast three times this year, has in recent speeches called for development that is "comprehensive, coordinated and sustainable."
An initiative Mr. Wen launched this summer to revive the Northeast is now being worked out. Interest-rate subsidies to attract private-sector investment have already been approved, people familiar with the discussions say. Other support policies will be discussed by the Communist Party's Central Committee this month. Among the urgent measures needed, political and business leaders in the Northeast say, is more state funding, especially to prop up a fledgling social-security network that is only supporting a portion of the region's unemployed.
In Shenyang's home province of Liaoning -- the most industrialized of the rust-belt provinces and thus the fulcrum for any revival -- Gov. Bo Xilai measures the painful transition under way: three million people laid off and nearly 500 enterprises shut down with more than $10 billion in debts either written off or set to be unloaded at fire-sale prices. Just to stay afloat, he says, the province has to generate enough growth to create 700,000 jobs for displaced state workers each year through 2007.
"We're clearing away the millstones of a historical era," says Mr. Bo, the son of a Communist Party elder.
Difficult Changes
It's a jarring process. Workers more than 40 years old who spent their adult lives in state factories are perceived as almost unemployable by many of the new businesses setting up shop. Recovery seems especially far off in smaller one-industry towns and the mining cities whose veins of coal are exhausted. In Fuxin, Gov. Bo says, out-of-work miners and their dependants make up half of the city's one million people. Resentment runs deep among the unemployed, forcing police to keep a watchful presence to root out potential organizers of protests.
"We people originally had work. We had lives. We had money. So when the government says it can't arrange jobs for all of us, I just don't understand," says Xu Shiming, a former cardboard-factory worker who with his wife lives on a $45 monthly pension payment in a crumbling apartment block in Shenyang's Tiexi district, once the center of the city's heavy industry.
But the way Mr. Xu and others are surviving points to the new economy that is emerging from the devastation. Many have found jobs, albeit lower-paying ones, in a service sector that didn't exist in the heyday of state planning. Mr. Xu augmented his pension by taking tickets and cleaning at a local bathhouse before it was torn down this spring to make way for a shopping mall. His daughter works in a lighting factory, a spinoff from one of the city's few viable state factories.
City officials say unemployment in the hardest-hit neighborhoods still reaches serious proportions -- 20% to 30% -- and that 100,000 people, more than 8% of the total work force, truly cannot find work. But only 700 people have applied to fill the more than 2,000 street-sweeping and other menial jobs the Tiexi district has set aside for the unemployed, says Li Songlin, the district chief. "Some people just don't want to work that hard."
Still, much of Shenyang throbs with signs of economic activity. Two five-star hotels opened last year -- a Marriott and a Sheraton -- catering to the foreigners whose investments rose 36% last year to $1.6 billion, and are on track to reach $2.4 billion this year, officials say. Consultants from Deloitte Touche Tohmatsu are poring over the books of state enterprises eager to attract investors, people privy to the process say.
Heavy-Industry Revival
Perhaps most striking, all the activity is contributing to a rebirth in the traditional state-run heavy industries that flourished under central planning but have been dying under market competition.
The Shenyang Machine Tool Co., for example, just five years ago was headed in the same direction as its run-down neighborhood of closed factories. Typical of state companies, Shenyang Machine Tool cared for a bloated work force, retirees and their families, running hospitals, schools and restaurants that bogged the company in debt. Allowed by the government to restructure and cut staff drastically, to 14,000 from 32,000, and aided by a World Bank loan, the company is now China's largest maker of machine tools, an increasingly potent exporter and, Chairman Chen Huiren says, on track to turn a profit this year after breaking even last year.
But though Beijing has permitted downsizing, it doesn't let managers go as far as they would like. Mr. Chen says his company is keeping alive a bottled-water venture that employs fewer than a dozen people because, he implies, the government won't let him close it down.
"If I could build my own company from scratch, I would make it first-grade," Mr. Chen says. "But the plate I was given was just so big, and I can only get rid of so much."
中国东北重工业区重振旗鼓
历经沧桑的沈阳遍布著破败的工厂，这个城市不像是重振经济的中心。
当地的重工业曾一度是国家计划经济的骄傲，现在却在市场竞争中垂死挣扎著。在这个过去的工业重镇，倒闭的工厂比比皆是，当地人说10个成年人中就有7个失业。经济学家称，即便在中国其他地区经济蓬勃发展的时候，整个东北，也就是西方人称之为满洲的这个地区的经济也一直在萎缩。
但现在在沈阳，满目疮痍的旧经济即将焕发新活力，因为中国领导人开始关注这个一度被遗忘的东北工业区，并将施以投资激发经济活力，转变当地落后的局面。消费电子产品制造商、农产品公司和生物科技公司将取代钢铁厂和拖拉机厂。
中国高科技的脊梁、软件制造商东软集团(Neusoft Group Ltd.)难以置信地将沈阳称为大本营。传统的汽车制造业也再度焕发生机。华晨中国汽车控股有限公司(Brilliance China Automotive Holdings Ltd., 简称：华晨中国)和德国宝马汽车公司(Bayerische Motoren Werke AG (BMW), 简称：宝马汽车)在此建立的合资公司本月开始生产宝马豪华轿车。美国的通用汽车公司(General Motors Corp.)正在与合作伙伴沈阳金杯汽车工业有限公司(Shenyang Jinbei Automotive Co.)就扩大合作进行谈判。
东软创始人、集团董事长刘积仁说，“没人相信沈阳会成为一个良好的投资环境。这里冬天寒冷。污染严重。它很难吸引人们。”但曾在大学担任教授的刘积仁说，将沈阳造就成斯大林式计划经济重镇的那些因素同样也适应于自由市场：受过教育的技术工人。该市的官员称，这里的工资仅为上海的三分之一。
对于整个东北老工业区来说，端倪初现的经济振兴有著深远的意义。这个拥有1.07亿人口的地区从上世纪50年代到80年代一直都是中国的主要工业基地，为国家的计划经济提供大量的钢铁、煤和石化产品。这里的国有企业工人成为了一个特殊阶层，他们享受著有保障的工作和福利。通过向这个曾是工业基地但近年衰落的地区重新注入活力，北京开始为之铺垫一个经济长期增长的平台，其增长将由国内需求拉动，而非中国现在依赖的出口和外商投资。
恢复经济增长还将遏制社会不稳定因素。于1998年开始并在去年达到高潮的辽阳和抚顺工人大规模街头示威已经平息。沈阳的政府官员称，过去一年多来，当地已没有再出现大的工人示威活动。虽然他们没有提供过去示威活动的统计数据，但在经过比较后发现，针对城区改造项目的抗议活动数量已压过了工人的示威，过去一个月中，这类抗议活动就发生了两次。
新领导层
关注重心的转移是中国新领导层的显著特征，他们在执政的第一年非常强调改善工人和农民的经济条件，这些人群在经济改革时期收入却没有增长。温家宝总理今年三次视察东北，并在最近的讲话中要求“统筹兼顾、注重协调、坚持可持续性”地发展东北经济。
温家宝今年夏天提出的振兴东北经济的计划现在已经成形。据知情人士称，为吸引私人企业投资采取的利率补贴方案已经获得批准。中国共产党中央委员会将在本月讨论其他支持政策。东北的政府和工商领导人士称，他们最紧迫需要的是更多的国家拨款，特别是向尚未成熟的社会保障体系注入资金，这个保障体系仅为该地区部分失业者提供救助。
沈阳所在的辽宁省是东北工业化程度最高的省份，因此也是东北经济能否振兴的关键，辽宁省长薄熙来权衡著这个痛苦的转变过程：300万下岗工人，将近500家企业倒闭，同时100多亿美元债务或被注销，或廉价出售。他说，为了度过难关，辽宁省必须创造足够的经济增长，这样才能在2007年之前每年为国有企业工人创造70万个就业机会。
这位共产党元老的儿子表示：“我们在清理一个历史时期留下的包袱。”
艰苦变革
这是一个坎坷的过程。在很多在此开展业务的新公司眼中，在国有企业度过了半生的40岁以上的工人基本是不能雇佣的。对小一点的单一工业城市以及那些煤矿已基本采光的矿产城市来说，经济振兴尤其显得遥远。薄熙来说，在阜新，下岗矿工及其家属占这个城市100万人口的一半。下岗工人中民愤颇深，警察必须保持高度警惕，查出可能的示威组织者。
一个纸板厂的下岗工人许世民(Xu Shiming，音译)说，“我们这些人本来是有工作的。我们有过自己的生活。我们还有过钱。因此当政府说它不能为我们所有人安排工作时，我就是不明白。”许世民和他的妻子拿著每月45美元的退休金生活在沈阳铁西区破旧的宿舍区，而这里曾经是这座城市重工业的中心。
许世民和其他下岗工人的生存系于从废墟中崛起的新经济。虽然收入微薄，但很多人已在服务行业找到了工作，这个行业在国家计划经济的黄金时期根本就不存在。许世民在当地一家洗浴中心收票并做一些卫生打扫工作，这使他的退休金稍有增加，但这个洗浴中心在今年春季因当地建购物中心而被拆除。他的女儿在一家照明设备工厂工作，这家工厂是从当地少数几家存活下来的工厂中分拆出来的。
市政府的官员称，铁西区是下岗重灾区，这里的失业率依然高达20%到30%，大约有10万人，即总劳动人数的8%以上，无法找到工作。铁西区区长李松林说，该区为下岗工人创造了2,000多个打扫街道和其他一些服务性的工作机会，但只有700人申请。“一些人不愿意从事如此辛苦的工作。”
不过，沈阳的很多地方展现出勃勃生机。去年两家五星级酒店－－万豪和香格里拉－－在当地开业，政府官员说，去年当地的外国投资额增加了36%，达到了16亿美元，今年有望达到24亿美元。据知情人士透露，德勤会计师事务所(Deloitte Touche Tohmatsu)的咨询人员正在为那些渴望招商引资的国有企业进行审计。
振兴重工业
也许最重要的是，所有这些都将促使传统的重工业重新焕发出活力，这些在计划经济下一度繁荣的重工业却在市场竞争中奄奄一息。
例如，沈阳机床股份有限公司(Shenyang Machine Tool Co.)5年前和周边其他倒闭的工厂一样走向末路。作为典型的国有企业，沈阳机床要照管庞大的工人群体、退休工人以及他们的家属，它还要照管医院、学校和食堂，这让公司陷入了负债。在政府的允许下，该公司进行了重组，将工人从32,000人大幅削减到14,000人，并得到了世界银行(World Bank)的贷款，公司董事长陈惠仁说，该公司现在已成为中国最大的机床厂，出口能力越来越强，在去年盈亏平衡后公司今年将实现盈利。
但尽管北京允许该公司瘦身，却没有赋予公司管理层完全的自由。陈惠仁说，他的公司还养活著一个不到12人的瓶装水公司，他暗示说，这是因为政府不让他关闭它。
陈惠仁说，“如果我能从零开始建立我自己的公司，我会把它打造成一个一流公司，但（政府）给我的盘子太大了，我要摆脱的包袱太多了。”
