Northeast China has high stakes in North Korea. A durable peace on the Korean Peninsula could mean much needed jobs for China’s industrial rust belt. China’s northeast, historically known as Manchuria, was among the first to industrialise. The region’s plentiful reserves of iron ore and coal premised the rise of its heavy steel-based industry. At one time, Tsarist Russia’s advances, as well as the northeast’s occupation by imperial Japan before the Second World War, spurred the first phase of industrialisation.
Food security that the region provided deepened the spread of local industry. The Northeast Plain’s fertile black soil was ideal for growing wheat, corn, sorghum, soya beans, flax and sugar beets. But Deng Xiaoping’s market-driven reforms and opening up, which spurred a new wave of industrialisation, starved the now obsolete production lines of the northeast of fresh capital and markets, haemorrhaging the local economy.
Nevertheless, the region is now getting its second wind. Two years ago, China’s planners said they would pour billions of dollars till 2019 to revive the northeast’s economy, with Liaoning province as the spearhead.
Unsurprisingly, a new pilot free trade zone (FTZ) spanning Liaoning’s three cities — Shenyang, Yingkou and Dalian — has taken root. At the FTZ office at the picturesque Yingkou port, officials point out that they have been officially asked to bridge Northeast Asia with Central and Eastern Europe. “We are the nearest port of landing for South Korea and Japan. We have then a rail connection to Central and Eastern European countries to take these goods forward,” said Zhang Dong, a senior official at the Yingkou FTZ.
At the port, an assortment of brightly coloured containers can be seen piled up prior to their onward journey by rail to destinations in Europe. A similar model of land-cum-sea transportation is visible in Dalian, a giant deep water port not far from Yingkou. From an elevation in the port complex, an army of orange cranes can be seen hauling containers from ships. “There are 18 container-handling berths along the south coast of the port, which you can see are operational, while the north coast of the port is still under construction,” said Sun Shiwei, an official at Dalian’s pilot FTZ. “With a 20-metre depth, even the largest container ship can dock at the port.”
Not far away is a dense cluster of rail tracks that can be used to transport cargo to distant European cities by transcontinental trains. Both the promise of peace in the Koreas and U.S. President Donald Trump’s so-called trade war with China appear to be feeding into the northeast’s second coming. Mr. Zhang at the Yingkou port stressed that the budding peace initiatives in North Korea were likely to benefit northeast China.
“We have reason to believe that there would be better development and more communication and exchanges with North Korea.” Other officials spotlighted that once sanctions were lifted, Chinese companies would benefit from the anticipated heavy demand in Pyongyang for fresh infrastructure and real estate as well as energy.
Officials were also sanguine about being impacted by the Sino-U.S. trade war, as the region was mainly opening out to Northeast Asia. “I have just come back from a conference in Japan and I can say with confidence that the political atmosphere in Northeast Asia, specifically in South Korea and Japan, is much better than before. I believe this will help us to reduce the bad influences of the trade war,” said Mr. Zhang.
Once sanctions on North Korea are lifted, Chinese companies would benefit from the anticipated heavy demand in Pyongyang for infrastructure, real estate as well as energy
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