Traditional Manufacturing Bases See Signs of Slowing Down
The world’s second largest economy has slowed down to a 24 year low of around 7.4 percent last year even with efforts to diminish reliance on investment and low end manufacturing. Although the Chinese economy is being restricted for quality growth, its old industrial heartland seems to be missing something as the country’s traditional manufacturing bases in the northeast saw growth even slower.
Even with a cooling economy there are works that are holding well and consumption is contributing more to the growth of the country. But a steeper slowdown in three northeastern provinces can be disturbing sign that the China’s rust belt is stuck using the old growth model as the nation gears up for a transformation. Economic growth in the northeastern provinces of Jilin, Heilongjiang and Liaoning is trailing behind the national average last year.
The northeast is among the first regions in China to be industrialized, and State owned companies have played a big role in the region’s heavy industry. And a revitalization plan was created to help the region bounce back to lead economic growth after the central government has implemented reforms in its inefficient state sector in the late 1990s. a weakened overseas demand and falling commodity prices in the past year has took a fresh toll in the region’s economy which led to a slowdown once again exposes regional economic problems in their previous government rescues with failed to address the problems.
Although market based reforms are being offering and grants more freedom to entrepreneurs and boost productivity in developed regions, progress is slow here. Furthermore foreign equipment in factories of state firms points to the lack of propriety technology placing the firms at a disadvantage in global competition.