Issues such as population, real estate, and the economy of Northeast China were discussed at Finance.ifeng.com recently by Professor Yu Miaojie, deputy to the National People’s Congress, member of the Standing Committee of the Liaoning Provincial People’s Congress, also deputy secretary of the Party Committee and president of Liaoning University.
The former three northeastern provinces, well-known for their fertile land, developed agriculture, and abundant mineral resources, were the most important industrial bases in China. However, since the late 1990s, the Northeast region has experienced an economic downturn and population outflow.
A number of questions are raised. What happened to the economy of the Northeast? How can the situation be changed? Why is there a saying that “Investments do not go to the northeast, beyond the Shanhaiguan Pass”? How will China’s economy develop in the post-epidemic era?
On February 4th, 2023, the First Changbai Mountain Summit Forum, jointly initiated by Finance.ifeng.com and Northeast Securities, will be held. Themed with ‘Looking forward to the Promising Future of 2023’ in the post-epidemic era, the Forum will hold in-depth discussions around topics such as population, policy, investment, and real estate.
On the eve of the Forum, Finance.ifeng.com held a dialogue with Professor Yu Miaojie, and conducted an in-depth discussion on these issues in Northeast China.
Talking about his views on the saying “Investments do not go beyond the Shanhaiguan Pass”, Yu Miaojie said that the harm caused by it to the entire Northeast economy is immeasurable. The biggest problem it generates is indicated by the example of an ordinary person questioning whether to invest in the Northeast. Who would dare to go and invest in the area given this saying?
Yu Miaojie pointed out that the reason for this problem is that things were done without integrity in some places, resulting in excessively high transaction costs, which had a great impact on the local economy. Especially, ordinary people in the northeast gradually lost confidence, making the situation even worse. Confidence is more important than gold.
Professor Yu believes that the most simple and fundamental reason why enterprises dare not cross Shanhaiguan Pass to invest is that the cost is too high. And yet, the labor force in the northeast is cheaper than many provinces along the eastern coast, the natural resources are abundant, and it is close to the raw material site. Costs should be lower, but why then so high? Professor Yu argues it is because market transaction costs are excessively high, and enterprises feel that business efficiency is poor, thus making them want to set up businesses elsewhere.
Professor Yu noted: “In fact, from a certain point of view, the aforementioned problem makes the originally bad ecology exist for a long time. From the perspective of ordinary people, if they have business to do, they can directly go to government agencies to get it done. From the government side, agencies should effectively perform administrative functions if business does not violate relevant policies. This can be achieved and many provinces in the south have already done in this way, so I think it is very important to effectively reduce transaction costs.”