The Revitalizing of Chinese Northeast and Northeast Asia Regional Economic Cooperation

1. Reasons why Northeast economy declined and basic approach of revitalization

In 1950s, three Northeast provinces, occupying 8% of national population and coverage area, produced over 25% of national industrial output value. In 1980 their industrial productiveness occupied 16.2% of national amount. In 2000 the output value reduced to 9.6%, down 6.6%, therefore their economic position became the region with the largest and most obvious decrease range. There are many aspects of reasons why the developing of old Northeastern industrial base lagged behind, but most of all are the following three aspects:

First, mechanism transformation substantially changed the system environment which economic development relied on. After the foundation of New China, the reason why Northeast could develop into an important industrial base in a very short time is mainly favored by traditional plan economic system. After the foundation of New China, Chinese government fixed the most hurry realization of industrialization as the core of the overall economic construction mission, and decided to concentrate major forces to develop heavy industry. Northeast became heavy chemical industry base nation stressed to build. During "the First Five Year Plan", 57 of 156 major construction projects were in Northeast, investment amount reached 37.3%. However, with the continuous deepening of our economic system reform, the economic developing of Northeast region lost institutional advantage day by day, moreover needed to burden more reform and institution transformation costs than other areas. On one side, with the ceaseless deepening of Open Up and Reform, Northeast traditional advantageous industry -equipment manufacture industry encountered unprecedented international competition. On the other side, plan economy left too many state-owned enterprises in the base, these enterprises not only shouldered all kinds of heavy social load and historical burden, but also their internal organization structure and management and operational means are unable to effectively accord with market economy demands.

Second, resources possession and ¡°dominant resources¡± which decide economic developing greatly changed. The possessions of hugely rich coal, iron and other natural resources were the most important natural conditions for Northeast to rapidly become national industrial base. However through large scale mining and developing for many years, the problem of continuous reduction of resources able to mine became so severe that many resources exhausted cities and regions came into being. Take Heilongjiang province as an example, the average mining years of four large state-owned coal miners of Hegang, Jixi, Shuangyashan and Qitaihe are near 70 years, 16 of 33 major mines has already exhausted resources and approved to go bankrupt by nation. What worth paying additional attention to, with social economic developing, improvement of transportation conditions and unceasing growth to superior rank of industrial structure, natural resources influence on a regional economic activities reduced day by day. In this sense, Northeast not only gradually missed previous resources advantages, but only heavy chemical industry established relying on local resources advantages faced more and more intense home and aboard competition.

Third, echelon Open Up and Reform strategy significantly worsened Northeast location advantage. The reason why Northeast could fast become important industrial base is benefited by forceful assistance from previous Soviet Union. However starting from 1960s, Northeast slowly lost boundary advantage. After Open Up and Reform, its geographic disadvantage further protruded. Due to echelon Open Up and Reform strategy China performed to gradually shift from Southeastern Coast to inland, Southeastern Coast has more and more apparent location advantage, but Northeast had not listed in Open Up and Reform focal areas. Therefore under new situation and Open Up and Reform strategy, national concentrated industrial base in former times is inclined to be "economic marginal area".

To sum up, we believed that Northeast economic troubles basically was not a low developing degree issue, but with social economic conditions changing, the past industrialization road can not go on. Northeast revitalization essence is neither general initial developing of least developing area, nor further improvement of industrialization degree going with previous industrialization road, is vital adjustments of previous developing direction and economic structure according to development and change of natural conditions and social economic environment, and is a reindustrialization process which fulfills industrial foundation, lifts industrial quality and pushes forward higher level on this basis. What reindustrialization is the course of realization of sustainable economic development of areas with high industrialization degree but faces developing trouble, to rebuild industrial micro base and adjust industrial structure. The core of Northeast reindustrialization mission is to fulfill industrial base, improve urbanization level, strengthen private economy and hoist Northeast economic incorporation. Under the grand background of continuous deepening of globalization, Northeast reindustrialization shall, with open up vision, sufficiently use foreign capital, technology and management experience, particularly, push forward Northeast to speed up reindustrialization pace through enhancement of economic cooperation with Northeast Asia countries.

2. To implement Northeast revitalization strategy provides Northeast Asia regional cooperation with new chance.

Northeast area is situated in Northeast Asia center, its revitalization provides Northeast Asia regional cooperation with unprecedented new chance in many aspects.

First, the performance of Northeast revitalization strategy provides its active participation in Northeast Asia regional cooperation with reliable institution assurance. Chinese government thinks highly of promotional role of Open Up and Reform in revitalization, and released a series of policies to speed up Northeast Open Up and Reform. The publish of these policies supply favorable policy environment for Northeast participation in Northeast Asia energy cooperation, agricultural cooperation, labor cooperation and boundary open up cities cooperation.

Second, state-owned enterprises reform in Northeast provides Northeast Asia international companies with new investment chances. To realize Northeast revitalization, we must solve the problem of too high state-owned enterprise ratio and their lack of vigor in this area. Chinese government further clarified basic guidelines for state-owned enterprises, that is, step by step adjustment of strategic layout of state-owned economy, active encouragement of participation of private economy and foreign capital in Northeast old industrial bases reform. Majority of Northeast state-owned enterprises belong to heavy chemical industry, heavy chemical industries in relevant Northeast Asia countries are very advanced, their technical strengths are abundant, investment in Northeast is their rare opportunity.

Third, Northeast revitalization will actively impact on economic developing in neighboring area. Northeast Asia economic development is quite unbalanced, even in countries with high economic development level such as Japan and Korea, their domestic economic developing is quite unbalanced, East sea coasts of both countries are all economic backward regions. The economic development of Northeast will not only actively impact the economic developing of Russia Far East area, Mongolia and North Korea, but also actively influence the economic developing of East sea coasts of Japan and Korea,

Forth, the speeding up of Northeast infrastructure construction will provide Northeast Asia regional cooperation with important material guarantee. Northeast possesses advanced railway network, road network is accelerating building. In order to better promote Northeast revitalization, China has already launched the task of further improvement of its infrastructure. The amelioration of infrastructure will not only do favor to its economic and trade relations developing with boundary countries of Russia, Mongolia and North Korea but also create necessary condition for the participation of Japan and Korea in Northeast Asia regional cooperation.

3. Active participation in Northeast Asia regional cooperation will speed up Northeast revitalization paces. To sum up the promotion role of Northeast revitalization to Northeast Asia regional cooperation, it mainly includes in the following four aspects:

First, the enhancement of regional economic cooperation is the vital power to push forward Northeastern area economic system and the administration organizational reform. The economic system and the administration system adapts the market economy request with difficulty, are one big barrier for Northeastern developing. Along with gradual reduction of the barriers to the Northeast Asia region interior resources and commodities overflow, whether or not can Northeastern area create technical and talented person's policy environment which is advantageous to the attraction of capital, will directly affect this area to locate competition status in the region cooperation as well as to attain the size of income.  Strengthen of the region cooperation will impel advancement of Northeastern area economic system and the administration organizational reform. 

Second, strengthen of the regional economic cooperation is the important strength to impel traditional industries transformation of the Northeast old industry base.

Since Reform and Open Up, our country has gradually enlarged technological transformations dynamics to tradition industry of old industry base with skilled workers, although the certain result has obtained, in  the overall looks, the backward condition of  technical level of tradition industry has not certainly obtained the  radical reverse.  The best way to fundamentally solve the question of low self- survival and development ability of the old industry base tradition industry is, to unify the technical introduction and the capital introduction, to enhance the traditional industry technical level and simultaneously optimize industrial organization.  In the Northeast Asia area, some national industry technology levels are  higher, the  industry technology in domains of machinery, steel and iron, chemical and so on is more mature, the northeast area may fully use own  boundary superiority, diligently attracts the direct investment and speed up the step of the traditional industry transformation. 

Third, strengthen of the region economic cooperation, is one important way for the Northeast area to fully display potential superiority of economic development. The northeast area has much latent superiority to speed up the economic development, such as, the industrialization and the urbanized level is higher, the industrial foundation is more abundant, the education and the technical level is more developed, has the natural condition for the development of modern agriculture.  Positive participation in the Northeast Asia region economic cooperation, may effectively transform these latent superiority for the economic development to realistic superiority, thus realize the continuous and fast economic development. 

Fourth, strengthen of the region economic cooperation, is important measure for the northeast area human resources development and the solution to employment question.  In the world the more successful and of higher level region economic integration organization, all adopted each kind of policy measure for convenient personnel intercourse and the labor force mobile.  Although the present Northeast Asia area is still with difficulty to realize the personnel free intercourse and the labor force unrestricted flow, strengthen of the region service cooperation and gradual relax to the labor force mobile limit, is one basic direction of the region economic cooperation.  Strengthen of the region service cooperation, will have the positive promoting action to the northeast area labor force resources development and the expansion of employment. 

4. Main question the Northeast Asia region economic cooperation faces.

Since 20th century 90's, the Northeast Asia area has made the certain progress in aspects of trade, investment and local region economic cooperation and so on.

Related all quarters reached the preliminary frame agreement on Tumen River area international cooperation; infrastructure of traffic, telecom and so on in Tumen River area unceasingly improves, the economic and trade cooperation develops with steady steps; The region ecological environment protection and the energy cooperation day by day receives all quarters' value; coordinated mechanism among local governments also obtained the preliminary establishment.  For example, "the link Sea of Japan local heads of government conference" and "the Northeast Asia economic conference" have already become the important discussion forum for the local government and the folk association to discuss the region cooperation. 

But in the overall looks, this local cooperation level is still quite low, has not obtained the significant breakthrough in various domains yet.  In order to cause the region cooperation to move towards thoroughly and the realization of together prosper, it is an urgent need to solve following several important problems: 

First, sets up in the Northeast Asia area the consciousness of altogether wins and the establishment of mutual confidence mechanism question. There are various factors restricting the Northeast Asia region economic cooperation to obtain unprecedented progresses, for example, the national types are complex and diverse, the questions left over by history are numerous and complicated, the  local safe politics has not obtained the effective  solution in long term.  Some of these questions will have long-term existence, others need one long history processes to perform to solve. The region economic cooperation development under this kind of extremely complex local environment, the relevant countries must set up the consciousness of altogether wins and establish mutual confidence mechanism.  Relevant countries must not only fully consider special situations of other countries and respect system and cultural polytropism, but also seek common ground  while maintaining difference and diligently explore the cooperation mechanism suits this local  characteristic; must not only correctly, fairly treat historical question but also have judgement which looks to front and grasp general situation to positively promote the region relations development; must not only see economic competitiveness among local various countries but see other national development creation new opportunity for  own further development, and thoroughly abandon the narrow consciousness which each kind dumps problem on someone else. 

Second, on the foundation of the region cooperation in the frame agreement, the related various countries together explore question of the cooperation pattern of the institution and the coordination mechanism question.  In 1995 China, Russia, North Korea three state signed ¡°agreement on establishment of Tumen River area development coordination committee", China, Russia, North Korea, Korea, Mongolian five  countries signed "agreement on establishment of Tumen River economic  development zone and Northeast Asia development coordination  committee" and "Tumen River economic development zone  and the Northeast Asia environment criterion memorandum ".  The above  international agreement provides the general cooperation frame for the Northeast Asia region economic  cooperation, specially the Tumen River area international cooperation development, from the research, the consultative stage changed over to the substantive cooperation phase of exploitation, but because these agreements and agreement content  were all quite unspecific, thus was unable to provide for this local economic  cooperation the effective instruction principle and the  reliable system safeguard.  And the above agreements and the agreement  main content all aim at the Tumen River international cooperation development items, thus at this point certainly has not formed one legal document systematically plans the entire Northeast Asia area region economic  cooperation. Without the legal document caused this region economic cooperation still to be at the condition of stability worse loose union. In order to impel the Northeast Asia region economic cooperation to move unceasingly towards thoroughly, it urgently needs relevant various countries together explore the institution of the Northeast Asia region economic cooperation pattern and the coordination mechanism. 

Third, to impel the administrative main body of the region cooperation to transform from local government as focus to central authorities as focus is problem. the Northeast Asia region economic  cooperation has obvious difference with the world other local region economic cooperation, namely,  main performance of this local economic cooperation is of the local level but  not the national cooperation.  For example, the ones directly participate the Tumen River area international development are Chinese Jilin Province, Russian Coast border area and Korean Ruoson free economical trade area tripartite local government.  "The link Sea of Japan local heads of government conference" also is one local government consultations for cooperation forum.

Under the situation that the related national central authorities are unable to establish together the comprehensive effective cooperation mechanism, acts by the local government on behalf of national central authorities to discuss the development of the region economic cooperation is one kind nimble, the practical feasible substitution plan. But because local government all does not have the full jurisdiction when involves the business of international cooperation question in processing, in fact international region  economic cooperation must inevitably involve to certain degree  sovereignty mutually transfers question, thus the central authorities must carry on the  decision and reach the agreement with the various countries' central authorities.  This means central authorities' international cooperation strategy in overall stipulated the local government advanced the breadth and the depth of the international cooperation, therefore it is very difficult to obtain the ideal effect to merely depend upon the international region economic cooperation which the local government impelled. 

Fourth, it is the question to improve local the investment environment, creates the condition for the enterprise to participate the region economic cooperation.  Since long ago, the domestic and foreign academic circles always hold a higher enthusiasm to the Northeast Asia region economic cooperation, but the enthusiasm of industrial world is actually insufficient.  For example, the Japanese enterprise investment to China mainly distributes in East China and the South China area, and investment to the Chinese northeast's mainly concentrates in Dalian, but investments are actually quite few in the Chinese other Northeast areas.  In the question of participation of the Northeast Asia region economic cooperation, although the enthusiasm of Korean enterprise is higher than the Japanese enterprise's enthusiasm, at present the Chinese Yanbian State has approximately 70% foreign capital item all is the Korean enterprise investments, but the proportion of its investment scale to the Chinese gross assets by Korea also occupies very small. 

The Tumen River area exterior investment scale of attraction is also extremely limited, and majority of all the investment is small and medium sized enterprise, nearly does not have the big enterprise,  the big group's investment, specially this local development has not  aroused multinational corporation's enough interest.  Does not change present situations under which the present enterprise value degree is not high and participates less, the Northeast Asia region economic cooperation is very difficult to get out of difficult position of slow progresses.  

5. Strategy ponders about promotion of Northeast revitalization and strengthen of the region economic cooperation.

First, integrate region economy and speed up the northeast region economic incorporation advancement.  Economies of the Northeast three provinces have certain supplementary, through the region economic incorporation construction, element of production may be effectively promoted to flow, the transaction cost may be reduced, the comparison superiority of each place can be displayed, the industrial linkage effect and the scale effect can be enhanced. 

Northeast three provinces should as soon as possible establish the  coordination mechanism, under the national leadership, plan the  region significant development plan, avoid questions of duplicating constructions and the item collision, break the administrative barrier,  gradually establish unified market of the commodity and the element of production  unrestricted flow, form the scientific division of  labor and the cooperative mechanism, and promote the common development of Northeast area  economy. 

Second, the border open cities are taken as the main item to develop the port economy, comprehensively enhance the Northeast area level of foreign opening up.  The Northeast area has Hei River, Suifen River, and the  foreign opening up cities and the ports of Huichun, Manzhouli and so on, these border open cities and the ports have already possessed the good infrastructure, but still exist many problems in the soft environment construction aspect.  Through strengthen of the bilateral and the multilateral cooperation and elimination of the economical exchange barrier, the border cities and the ports impetus function in foreign opening up can be fully displayed.  For example, in the Tumen River area, at present the international cooperation development mainly adopts the various countries' independent development pattern, this kind of pattern has many obvious limitations and should promote it come up to the bilateral or the multilateral coordination motion level.  We think, through the form of warding off constructions of the cross country economic cooperation area, we may realize this kind of transformation.  Mainly includes three aspects: One is China and Russia founds Huichun to Hasan cross country (frontier) the economic cooperation area, two is China and Korea establishes Huichun to Luosen the cross country (frontier) the  economic cooperation area, three is through conformity of the two cross countries  (frontier) the economic cooperation areas, forms the Tumen River area cross country (frontier) economic cooperation area.   Therefore, we suggest, China, Russia, North Korea three sides should  positively impel to set up the Tumen River area development  coordination committee, work out the overall planning of infrastructure construction, the industrial development plan, the human resources development, the environmental protection and so on in Tumen River area.

Third, actively promote various domains to carry out the substantive exchange and cooperation.  At present, there still exists very major difficulty to establish one complete systematic region economic cooperation system, the Northeast Asia area related countries should at first actively push forward the agricultural cooperation, the energy cooperation, the service cooperation, the ecological environment protection  cooperation, bilateral and the multilateral investment protection  cooperation.  (1)  In agricultural cooperation aspect, we must not only take seriously construction to facilitate agricultural product mobile system, but also promote modern agricultural technology shift;  (2)  In energy cooperation aspect, we must not only make substantive progress in  cooperation development aspect, but also must strengthen cooperation in  technology develop and transfer aspect;  (3)  In service cooperation  aspect, we must not only create convenient condition for the flow of labor force cross country, but also enhance cooperation in aspects of labor force resources  development and personnel training:  (4)  In ecological environment protection cooperation aspect, we must not only establish region ecological environment protection system, but also must promote cooperation of technology develop and transfer;  (5)  In cooperation of multilateral investment  protection aspect, we shall not only form system of Northeast Asia area system to facilitate investment, but also pay attention to developing nations maintain rights and  interests of own economic security.

We suggest, the Northeast Asia area various countries start up the multilateral conference system in the above cooperation domain, discuss and consult the action plan of cooperation in various domains, on this foundation, the Northeast Asia region economic cooperation organization is established, to further hoist the region cooperation, promote in this local peace and the development. 

(Wang Shengjin, Assistant Director of Jilin University, doctor, professor, teacher tutoring doctor;   director of Northeast Asia  research center of Jilin University, studies base with emphasis of the  Ministry of Education.  Research direction:   Northeast Asia region economy, region economics. )