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Corruption, Lack of Opportunities Challenge Job Growth in China’s Rust Belt


As China’s economy slows to growth rates not seen in more than a quarter of century, the country’s Communist Party rulers are under increasing pressure to create jobs.

Millions enter the workforce each year, and as China tries to reduce overcapacity in steel and coal industries a growing number are looking for work after being laid off.

China’s northeast is reeling from the impact of zombie enterprises, debt-laden companies who have let overcapacity run amok and are now facing massive layoffs, and it is struggling to keep young workers and talent at home.

Stay or go?

At a recent job fair in China’s northeastern city of Shenyang, the capital of Liaoning province, many say they are concerned about the slowing economy and its dampening impact on jobs.

“The outlook now for jobs is not as good as a few years ago and I think that’s because the economy is not that great,” said Shenyang resident Wang.

The job fair was one of several that Saturday and it was packed with hundreds, if not several thousand job seekers. Some were struggling to find work and unqualified for the opportunities they sought.

Another resident named Wu said he was not finding the kind of work he was looking for at the fair because many opportunities were in the services sector.

“I am worried about finding work. If I can’t find a job here, I’ll most likely go somewhere else to work,” he said.

Wang from nearby Jilin province said he was looking for steady work, something stable and closer to home.

“The jobs I worked in the past would change every three of four months, from one location to the next, from Shenyang to Changchun and other places,” Wang said. “Pay was better by comparison about $870 to $1,450 a month, but there were no benefits.”

Favors, money

During his annual work report to China’s legislature on Sunday, Chinese Premier Li Keqiang said the world’s second largest economy aims to create more than 11 million new jobs this year. He also talked about the importance of the northeast to the Chinese economy. Li was party secretary of Liaoning from 2004-2007.

But while the northeast has long been on the government’s priority list, policy measures appear to have done little to change the overall environment. Heavy industry and state owned enterprises have long dominated the region's economy, contributing to an ongoing exodus of talent to other parts of the country, analysts said.

For many university students, going somewhere else is the only option, even for those who eventually want to come back and make Shenyang their permanent base.

“I hope to go somewhere better and then bring some of those good practices and experiences back to Shenyang,” said a music student named Han.

But medical student Ni said he plans to head back home to the south after he graduates, because, as he put it, the mindset and environment there is more open.

He said in the northeast, “Whether it is the government, schools or hospitals there is too much focus on connections and favors. What you can do is not important and there is no room to put your talents to good use.”

Bad reputation

Liaoning has also been forced to confront corruption in a very open way.

In 2016 it was the slowest growing province in the country, the only one to see negative growth. Last year, it’s leaders made a rare admission, revealing that between 2011 - 2014 the province’s figures for economic growth were faked, in some cases by more than 20 percent.

And a vote-buying scandal was disclosed as well, the worst since the Communist Party came to power.

Liaoning officials have pledged to put an end to the practices and spoke openly about the scandals at a meeting Sunday in Beijing.

“We’re overly reliant on heavy industries. Innovation and creativity is lacking. The impact on the [economic] environment is not good and talent is not being put to its best use,” said Li Xi, Communist Party boss in Liaoning and spokesman for a delegation to this year’s annual Twin Sessions meetings of the National People’s Congress.

Last year, almost half of the Rust Belt province’s representatives to the NPC were caught up in the scandals. Li Xi said the election of officials who bought their way into office, many of them prominent businessmen, had an impact on “personnel arrangements by central authorities.”

While some are hopeful the government’s pledge to clean up the environment will bring about change, the region’s heavy emphasis on infrastructure as a model for jobs and growth has most waiting for clearer signals.

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