mandag 15. juli 2019

Economic improvement in China’s northeast rust belt is just skin deep as state firms continue to bleed

When China’s central government chose Shenyang Machine Tool, a state-owned manufacturing behemoth in the northeastern province of Liaoning, to undergo a programme of reform two years ago, it probably imagined it would provide a yardstick for the broader regeneration of the region as a whole.

It could not have been more wrong. While the provincial authorities reported growth of 6.1 per cent in the first quarter, which was on a par with the national figure, little of that upturn came courtesy of Shenyang Machine Tool. In fact, the company’s decline, coupled with years of losses due to mismanagement and political meddling, has been exacerbated in recent years by its investment in an automation system known as i5.