The Modern Vampire Companies In Northeast China

The Modern Vampires of China Name: Institution: Course: Date: The Modern Vampires of China The Northeastern China is considered as the oldest son of the country, composed of mainly the provinces; Jilin, Liaoning and Heilongjiang. In the Chinese tradition, it is the norm that the future of the family rests on the shoulder of the oldest child. Ironically, this is a child that is failing the family; the Northeastern provinces. Experts point to a shift in the economic systems relative to the needs of the people and the country at large (Harbin, 2018). It was Mao that made the Northeast of China the haven it has been for the last couple of decades. Known to the world as Manchuria, this was a wilderness, with dark forests as well as snow swept plains. The only inhabitants were a few of the fishing tribes and the hunting tribes. Most of the heavy industries in China would later be stationed here. Some of the largest industries such as car manufacturing, aircraft manufacturing and assembly as well as machine tools can be found in the region. In the year 1978, Liaoning, which is the most populous of the three had the third largest economy when compared to the rest of the 31 provinces on the mainland. It has a GDP that was 20% bigger than that of Guangdong, a Southern province that has the largest population (Harbin, 2018). The last 40 years of economic growth in the nation has however left the Northeastern struggling economically at every turn. It is important to note that the government has had some efforts in play since 2003 to revive the region's economy, by increasing state investments in the region. As late as 2016, the government also pushed another dollop of money to try and revive the industries which do not seem to be on their path to recovery. This is a region that is syphoning millions of dollars of the Chinese economy without much return on the same. It is a vampire that simply compromises the health of the economy in China as it is dragging behind despite the amount of government injected money that go down the drain in the industries associated with the three provinces. State Owned Enterprises There are some elements that have brought the provinces to the position that it is currently in. It is important to consider the fact that, the Maoist planning led to the fact that most of the region is dependent on the state owned (Harbin, 2018). Most of the corporations in the region are state owned and this can be traced back to the Mao era. Much of the panning was directed at making sure that the country was thriving in the industrial sector, an aspect that worked some forty years ago. However, that element and advantage are slowly dying. This is relative to the concentration of the state owned enterprises that are simply not competitive enough. To put this into perspective, in China the SOEs are estimated at 17% in total. However, when considering the province such as Liaoning, the share of the state owned enterprise is at a staggering 40% (Harbin, 2018). Ironically, this is even lower when compared to that of Heilongjiang, which currently stands at 55% (Harbin, 2018). The firms that are found in the region are largely insufficient. This means that their ability to use the available resources in the best way possible is largely compromised as most are based on the older platforms and methods of production that are highly unsustainable. There is also the element of over reliance on the natural resources which poses a great threat relative to sustainable development and environmental conservation in the long run. A majority of the industries in the three provinces are on coal, agricultural, petroleum and steel among others. These are industries that constantly being phased out as they belong to the industrialization era. Other than the fact that, they are not sufficient in resource management and utilization, majority are also unprofitable. According to the survey that was carried out by the Paulson Institute from a think tank that was tasked with establishing the level of profitability of the SOEs in the Liaoning province, they were able to establish that the return on assets of the Liaoning’s SOEs fell from 3% in the 2000s all the way to minus one, -1% in the year 2015 (Harbin, 2018). In the simplest terms, this means that the state owned enterprises in the province are losing money. They are simply draining the resources of the nation and they are not largely contributing to the emerging economy. This is a vampire industry that only works to undermine the growth the country has made in other provinces and even across the globe as the fastest growing economy. When one steps in to Jilin from Beijing for example, it is as if they stepping back into the past. There is a complete change with the former having almost no growth in the last 40 years (Harbin, 2018). On the other hand, when compared to Beijing, the level of technological advancements and economic growth are alive in the vibrant industries. The industries that are largely state owned are still hung-up on the progress that they had some forty years ago. It is time that some of the private sector players are allowed into the industry to bring about a shake down. Ideally, with the level of competition that the private sector investors would bring, there is bound to be some element of a shift in the level of efficiency and changes in the production models that still rely on the of mechanisms outrun by time. Contributing to the better p...