Economy

The Worst Place In China To Do Business

In the provinces of Northeast China, the planned economy of the Mao Zedong era are still firmly in place.

In Harbin, Heilongjiang, one of China's worst performing provinces
In Harbin, Heilongjiang, one of China's worst performing provinces
Li Yongfeng

BEIJING â€" The multiple explosions at a warehouse in Tianjin not only killled 159, but also shone a spotlight on the economic crisis afflicting the northeast region of China. As growth slows, and analysts both at home and abroad speculate about whether the Chinese economy is going to have a so-called "hard landing," there is little to debate about where the northeastern provinces stand ahead of another cold winter: For the first half of 2015, the economic growth of Liaoning, Heilongjiang and Jilin, China’s three northeastern provinces, ranked respectively as the country’s first, third and fourth worst performing.

With its vast land and rich coal, oil and iron ore deposits, as well as heavy industry bases, the Northeast, known traditionally as Manchuria, has been considered the core industrial center ever since the Chinese Communist Party took over the country in 1949. Even if there exist certain natural limits, the region possesses obvious advantages. Thus the economic woes lie mainly in human factors, including a fundamentally conservative culture that stymies change and innovation.

Even today the planned state-owned economy, dominated by centrally-owned enterprises, still prevails, thus leading to the worship of officialdom and power. According to Song Donglin, head of the Jilin University of Finance and Economics, while centrally-owned businesses account for over 60% of Heilongjiang’s industry, “they account for 95% of the enterprises above a designated size in Jilin.”

Numerous major cities in the region were built based around these companies’ plants and factories, thus tightly linking their development with the fate of these entreprises. Meanwhile the companies also bear a lot of local social responsibilities in housing, education, transport, health care, and so on.

During the expansion of the planned economy, China’s central government conceived the national economy as a unified system, and made functional divisions for each region. Since China’s economic reform and opening-up globally, many regions are no longer focused on aligning their development in accordance with the central government’s plan.

And more often than not, these days, they acquire their raw materials and heavy industrial products â€" originally assigned to come from the Northeast â€" from elsewhere.

No market mentality

The Northeast is today the Chinese region where the planned economy still has the strongest hold. When the People's Republic of China was first founded, the government specifically wanted to build its core economic belt near the border with the former Soviet Union because it considered this the safest place. And today, this region retains the most complete Soviet-style planned economy.

Every time the central authorities talk about “revitalizing” the Northeast economy, it is still betting mainly on state-owned businesses, and specifically the centrally-owned enterprises. At the same time the central enterprises, as part of the remnants of China’s planned economy, listen to this call as a political mission. Ultimately, this means they don’t respond from a market point of view.

China’s economic boom over the last three decades has fundamentally relied on the force of the market in an unpredented way for the Communist country. The coastal area’s rise didn’t rely on centrally-owned corporates but on the evolution of the private sector learning from trial and error. As Zhao Junping, professor at the Northeast Petroleum University, noted in an interview with Asia Business: “It’s not enough to stimulate economic vitality solely depending on the state-owned enterprises (SOEs) and the local authorities. There is hope only if the entire society’s vitality is mobilized.”

A restructuring of the Northeast’s SOEs is bound to face much stronger resistance than in other regions, due to its huge social burden. The Tonghua Iron and Steel corporate incident offered an early clue. In 2009, the corporate restructuring plan sparked a massive strike and demonstration that led to the general manager being beaten to death.

Loss of talent

Due to a lack of local business culture, up to now, when leaders in the Northeast try to attract foreign investments what comes to their mind first is the opportunity to reap profits from their sphere of influence. This is not an attractive image for foreign investors.

In Mudanjiang, Heilongjiang province â€" Photo: drnan tu

All of this has led to a serious loss of the region’s best talent, reinfoced by the fact that in this part of China, more than elsewhere, everything depends on guanxi, the social networks people build around business leaders and government officials.

Worse still is the brain drain from local enterprises. In the past 50 years the region’s SOEs developed a massive technical backbone. But now those engineers are lured away by better developed regions in China’s southern and eastern coastal areas. In a similar way, China poached numerous engineers from Ukraine to help develop its military industry when the former Soviet Union collapsed.

But brain drain is not the Northeast’s only problem. The entire region suffers from a broader loss in population. According to a report of the Heilongjiang Provincial Academy of Social Sciences, after the founding of People’s Republic of China the province had seen, for the first 30 years, a net population inflow of seven million people, but for the latter 30 years a net population outflow of over four million. Except for big cities such as Shenyang and Dalian, the province of Liaoning also saw a negative population growth. The regions’ fresh labor force entrants are fewer than the retirees.

Natural factors also help explain the northeast’s economic downturn. The most important reason of all is that raw materials are being exhausted. City economies which rely on non-renewable resources such as oil, coal, and iron ore are plummeting fast. How to transform the region and reverse the situation is very challenging for local authorities and won’t be solved in the short term.

Moreover, the region also bears the cost posed by outdated industry and the extremely cold winter. For instance, the weather is clearly incompatible with heavy manufacturing and industries that require open-air operations. As a remote region tucked away near the border, the Northeast also has an obsolete transport system, with little changed from the lines built by the Japanese.

Catch-22

So far the central government has already carried out a “Revitalization Plan” twice in the region. Alas, not only have they not improved the situation, the local economy seems to have got even worse. Take as an example, the 2008â€"2009 Chinese Economic Stimulus Plan: a 4 trillion RMB ($586 billion) pumping package, a response designed to minimize the global financial crisis' impact. The pumping led to excessive investments, and, in consequence, resulted in largeâ€"scale expansion and overcapacity in various sectors, as well as in various areas, including Tianjin.

Today, many large state-owned enterprises in the Northeast are on the brink of bankruptcy. Through the government’s backing they can be revived, but this is most likely to make the matter worse in the long term. After all, the Revitalization Plan is a measure born out of the planned economy idea. Alas, the planned economy is precisely the cause of the Northeast's steep decline â€" and the only thing anyone thinks can save it from something even worse.

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Coronavirus

Where Lockdowns For LGBTQ Meant Moving Back In With Homophobic Relatives

The confinement experience could turn brutal for those forced to live with relatives who would not tolerate a member of the family living their sexual orientation openly as a young adult. Here are stories from urban and rural India.

At a Rainbow pride walk in Kolkata, India

Sreemanti Sengupta

Abhijith had been working as a radio jockey in the southern Indian city of Thiruvananthapuram when the COVID-19 pandemic hit in March, 2020. When the government imposed a nationwide lockdown, Abhijith returned to the rural Pathanamthitta district , where his parents live with an extended family, including uncles, cousins and grandparents.

Eighteen months later, he recalled that the experience was "unbearable" because he had to live with homophobic relatives. "Apart from the frequent reference to my sexual 'abnormality', they took me to a guruji to 'cure' me," Abhijith recalled. "He gave me something to eat, which made me throw up. The guru assured me that I was throwing up whatever 'demon' was possessing me and 'making' me gay."


Early in 2021, Abhijith travelled back to Thiruvananthapuram, where he found support from the members of the queer collective.

Inspired by their work, he also decided to work towards uplifting the queer community. "I wish no one else goes through the mental trauma I have endured," said Abhijit.

Abhijith's story of mental distress arising from family abuse turns out to be all too common among members of India's LGBTQ+ community, many of whom were trapped in their homes and removed from peer support groups during the pandemic.

Oppressive home situations

As India continues to reel from a pandemic that has claimed more lives (235,524) in three months of the second wave (April-June 2021) than in the one year before that (162,960 deaths in March 2020-March 2021), the LGBTQ community has faced myriad problems. Sexual minorities have historically suffered from mainstream prejudice and the pandemic has aggravated socio-economic inequalities, instigated family and institutionalized abuse, apart from limiting access to essential care. This has resulted in acute mental distress which has overwhelmed queer support infrastructure across the country.

Speaking to queer collective representatives across India, I learned that the heightened levels of distress in the community was due to longstanding factors that were triggered under lockdown conditions. Family members who are intolerant of marginalized sexual identities, often tagging their orientation as a "disorder" or "just a phase", have always featured among the main perpetrators of subtle and overt forms of violence towards queer, trans and homosexual people.

Calls from lesbians and trans men to prevent forced marriages during lockdowns.

Sappho For Equality, a Kolkata-based feminist organization that works for the rights of sexually marginalized women and trans men, recorded a similar trend. Early in the first wave, the organization realized that the existing helpline number was getting overwhelmed with distress calls. It added a second helpline number. The comparative figures indicate a 13-fold jump in numbers: from 290 calls in April 2019-March 20 to 3,940 calls in April 2020-May 2021.

"Most of the calls we have been getting from lesbians and trans men are urgent appeals to prevent forced marriages during lockdowns," said Shreosi, a Sappho member and peer support provider. "If they happen to resist, they are either evicted or forced to flee home. But where to house them? There aren't so many shelters, and ours is at full capacity."

Shreosi says that the nature of distress calls has also changed. "Earlier people would call in for long-term help, such as professional mental health support. But during the pandemic, it has changed to immediate requests to rescue from oppressive home situations. Often, they will speak in whispers so that the parents can't hear."

Lack of spaces

Like many of his fellow queer community members, life for Sumit P., a 30-year-old gay man from Mumbai, has taken a turn for the worse. The lockdown has led to the loss of safe spaces and prolonged residence at home.

"It has been a really difficult time since the beginning of the lockdown. I am suffering from a lot of mental stress since I cannot freely express myself at home. Even while making a call, I have to check my surroundings to see if anybody is there. If I try to go out, my family demands an explanation. I feel suffocated," he said.

The pandemic has forced some queer people to come out

Sumit is also dealing with a risk that has hit the community harder than others – unemployment and income shortage. He's opened a cafe with two other queer friends, which is now running into losses. For others, pandemic-induced job losses have forced queer persons from all over the country to return to their home states and move in with their families who've turned abusive during this long period of confinement.

Lockdowns force coming out

According to Kolkata-based physician, filmmaker and gay rights activist Tirthankar Guha Thakurata, the pandemic has forced some queer people to come out, succumbing to rising discomfort and pressure exerted by homophobic families.

"In most cases, family relations sour when a person reveals their identity. But many do not flee home. They find a breathing space or 'space out' in their workspaces. In the absence of these spaces, mental problems rose significantly," he said.

Not being able to express themselves freely in front of parents who are hostile, intolerant and often address transgender persons by their deadname or misgender them has created situations of severe distress, suicidal thoughts and self-harm.

Psychiatrist and queer feminist activist Ranjita Biswas (she/they) cites an incident. A gender-nonconforming person died under suspicious circumstances just days after leaving their peer group and going home to their birth parents. The final rites were performed with them dressed in bangles and a saree.

"When a member of our community asked their mother why she chose a saree for someone who had worn androgynous clothes all their life, she plainly said it was natural because after all, the deceased 'was her daughter,'" Biswas recalls.

The Indian queer mental health support infrastructure, already compromised with historical prejudice, is now struggling

David Talukdar/ZUMA

"Correctional" therapy

In India, queer people's access to professional mental healthcare has been "very limited," according to community members such as Ankan Biswas, India's first transgender lawyer who has been working with the Human Rights Law Network in West Bengal.

"A large majority of the psychiatrists still consider homosexuality as a disorder and practice 'correctional therapy'. It's only around the big cities that some queer-friendly psychiatrists can be found," Biswas said. "The pandemic has further widened the inequalities in access to mental health support for India's LGBTQ community."

Biswas is spending anxious days fielding an overwhelming amount of calls and rescue requests from queer members trapped in their homes, undergoing mental, verbal and even physical torture. "We don't have the space, I just tell them to wait and bear it a little longer," he said.

Medical care is dismal

Anuradha Krishnan's story, though not involving birth family, outlines how the lack of physical support spaces have affected India's queer population. Abandoned by her birth family when she came out to them as a trans woman in 2017, Anuradha Krishnan (she/they), founder of Queerythm in Kerala who is studying dentistry, had to move into an accommodation with four other persons.

Isolation triggered my depression

"I am used to talking and hanging around with friends. Isolation triggered my depression and I had to seek psychiatric help." Living in cramped quarters did not help with quarantine requirements and all of them tested positive during the first wave.

What is deeply worrying is that the Indian queer mental health support infrastructure, already compromised with historical prejudice, is now struggling, placing more and more pressure on queer collectives and peer support groups whose resources are wearing thin.

During the 10 months of the first wave of the pandemic in India in 2020, Y'all, a queer collective based in Manipur, received about 1,000 distress calls on their helpline number from LGBTQ+ individuals. In May 2021 alone, they received 450 such calls (including texts and WhatsApp messages) indicating a telling escalation in the number of queer people seeking help during the second wave.

As India's queer-friendly mental health support infrastructure continues to be tested, Y'all founder, Sadam Hanjabam, a gay man, says, "Honestly, we are struggling to handle such a large number of calls, it is so overwhelming. We are also dealing with our own anxieties. We are burning out."

Sreemanti Sengupta is a freelance writer, poet, and media studies lecturer based in Kolkata.

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