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The best books I read in 2016

These are my favorites of the books that I read during 2016, which are not necessarily books published in 2016 (the same rules as in previous installments). History and Russia were the main themes this year; I did read a fair number of China and economics books, but most of those ended up being fine and useful rather than books I wanted strongly to recommend. I also read less fiction this year than I usually do; not sure why.

Here they are, more or less in the order I read them:

Nonfiction

  • Robert Tombs, The English and Their History. Almost every one of its thousand or so pages is delightfully written and filled with interesting information. I particularly enjoyed the clever structure: after covering each era, Tombs writes a chapter on how it was understood by its contemporaries, later historians, and current research. It’s a wonderful device for disposing of myths and delivering clarity.
  • Lars Mytting, Norwegian Wood: Chopping, Stacking and Drying Wood the Scandinavian Way. Essentially an ethnography of home energy consumption in Norway. It’s hard for me to explain why that is so interesting, but it is.
  • Patti Smith, Just Kids. I never had much time for Patti Smith’s music, so took me a while to pick up this widely-praised memoir; in fact she is a lovely writer with a great eye for detail. The portrait of struggling artists in 1970s New York avoids the obvious pitfalls of self-absorption and name-dropping with its honesty.
  • Mark Miodownik, Stuff Matters: Exploring the Marvelous Materials That Shape Our Man-Made WorldAn exemplary work of popular science writing, exposing the fascinating processes underlying lots of, well, stuff. The section on chocolate is a highlight, so are the ones on cement and steel.
  • Benedict Anderson, A Life Beyond Boundaries: A Memoir. A delightful short book with many reflections on Asia, translation and comparative scholarship. I also re-read his Imagined Communities this yearwhich still ranks as both a great read and wonderful piece of boundary-crossing scholarship (more discussion here and here).
  • Charles Clover, Black Wind, White Snow: The Rise of Russia’s New Nationalism. A fascinating piece of intellectual and political history, from the scribblings of Russian aristocrats to the speeches of Putin, that has only become more relevant since its publication. Check out this excerpt for a taste.
  • René Girard, I See Satan Fall Like Lightning. Perhaps the strangest, most unusual book I have read all year–as well as the one with the best title. Then again, I don’t read a lot of Biblical exegesis-cum-philosophical anthropology, if that is even a category with more than one member. Great social insights from a unique mind (more discussion here).
  • Jürgen Osterhammel, The Transformation of the World: A Global History of the Nineteenth Century. Started on a whim, this book ended up taking over my life for much longer than I anticipated. Exhausting and rewarding in equal measures, it is without peer as a feast of scholarship and knowledge. One of its many themes is how much of the twentieth-century world was born in the nineteenth century, but it defies schematic summary.
  • Enrico Moretti, The New Geography of Jobs. A very clear explanation of the causes and implications of the one of the more important socio-economic facts of the moment: that “the knowledge economy has an inherent tendency toward geographical agglomeration.” Recent political events suggest that the social downsides of geographical polarization deserve more attention than he gave them in this 2012 book, but I still found it very helpful.

Fiction

  • N.K. Jemisin, The Fifth Season. A truly surprising and interesting fantasy novel, a species that has become almost extinct in this age of endless variations on the same genre tropes.
  • Eka Kurniawan, Beauty is a Wound. A surreal but always compelling portrait of the tumultuous twentieth century in one Indonesian city; bears comparison to One Hundred Years of Solitude. 
  • Madison Smartt Bell, Straight Cut. A standout noir novel from an unlikely source; reminiscent of the European-expatriates-in-peril stories of Patricia Highsmith.
  • Philipp Meyer, The Son. Three generations of Texans and their frontier legacy of violence; it captures well how one person’s desire for freedom can destroy another’s.
  • John James, Votan. Extravagantly praised by Neil Gaiman, and in fact extremely good and really unlike anything else. A cynical Greek merchant uses primitive mythology to swindle some Germanic tribes, but it becomes increasingly unclear who is using whom; a must for anyone who enjoys the Norse myths.
  • Ted Chiang, Stories of Your Life and Others. Quite simply, one of the best science-fiction short-story collections ever published. Apparently the movie Arrival is based on the title story, which is stunning because it is one of the least visual and most obviously unfilmable narratives I have ever read.
  • Amor Towles, A Gentleman in Moscow. An absolutely charming story of a disgraced Russian aristocrat whose house arrest during the revolution turns out to be the best thing that ever happens to him.
  • Willa Cather, Death Comes for the Archbishop. Strangely titled, since it is actually about the life of a bishop. A mostly plotless but very moving account of French missionaries in New Mexico, sharply evoking loneliness, culture clash, fulfillment.
  • Ursula K. LeGuin, The Found and the Lost: The Collected Novellas. A feast of excellent and mostly recent writing from LeGuin, much of which was new to me (most of the good stuff in the anthologies of her short stories published a couple of years ago I had already read). I also enjoyed Eleanor Arnason’s Ring of Swords, which was recommended by LeGuin herself, and is quite LeGuin-ean in its attention to comparative social structures.

Can economics offer more than a counsel of despair to struggling places?

I just finished Enrico Moretti’s The New Geography of Jobs, an admirably clear book about one of the most important trends of the day: the increasing concentration of American jobs, wealth and economic activity in a small number of urban centers. He argues that technology boomtowns like Seattle and San Francisco are what they are today in large part because of historical accidents that set off positive feedback loops, rather than because of any particularly enlightened policy. This means that it is not very obvious what all the cities that are instead trapped in negative feedback loops, losing population and jobs, should do:

People often have unrealistic expectations of their governments. The role that local governments can play in revitalizing struggling communities is less extensive than most voters realize and most mayors would like to admit. The reality is that a city’s economic fate is in no small part determined by historical factors. Path dependency and strong forces of agglomeration present serious challenges for communities without a well-educated labor force and an established innovation sector.

He is careful not to say that there is nothing to be done in the face of the pitiless onslaught of market forces, but it’s also clear that he thinks, probably quite rightly, that many local development policies (like tax subsidies to large employers) are ineffective and a waste of money. In the end he proposes mostly national policies: substantial increases in research and development funding, improved education, more openness to highly skilled immigrants. Rather than try to hold back the forces that are concentrating the economy in a small number of urban centers, in other words, the US should try to supercharge them, in hopes that even more centers will develop and allow more people to benefit.

The conclusion that benign neglect is the only real option for dealing with regional inequality seems to be the consensus wisdom of the economics profession. Since the US election though, there has been a pretty dramatic backlash against this counsel of despair. Here are three pieces that I found excellent, all of which are worth reading in full.

Adam Ozimek has a quite measured and detailed post:

The level of nihilism espoused by economists about what we can do to help struggling places in the U.S. is, quite frankly, strange. Whenever the issue of helping places is raised, critics jump straight to the most extreme examples, such as former mining towns. But the fact that some places need to shrink, and the costs of helping some places sometimes outweighs the benefits, is a far less powerful point than these critics imagine. Other places have survived the loss of major industries and gone on to thrive. Understanding why this happens sometimes and doesn’t happen other times, and what policymakers can do to help replicate the successes, are crucial policy issues that cannot be pushed aside by pointing out the impossibility or desirability of saving every place.

Finally, it’s important to note that the competition between thriving metropolises and the now-struggling parts of the country need not be zero sum. Increasing the human, social and physical capital of struggling places in this country can reduce the need for economic transfers at the federal level and can help make an overall more tolerant and open society that is better able adjust to the dynamism and globalism needed for a growing modern economy. It may help prevent residents in these places from desperately voting for policies that will only make things worse, like a trade war or immigration restrictions. These policies don’t make any economic sense, but when the best ideas for helping struggling communities consists of getting their most able residents to move away, it becomes a little easier to understand.

In a long and interesting piece, Steve Randy Waldman argues that not all of the self-reinforcing dynamics of urban concentration are necessarily positive, and that the political downsides are now pretty obvious:

Cities are great, but I think the claim that everybody moving to the very largest cities would yield a massive, otherwise unachievable, productivity boost is as implausible as it is impractical. Historically, economic activity was far less concentrated during the decades when America enjoyed its strongest growth. Perhaps technology has changed everything. But perhaps much of the apparent productivity advantage enjoyed by large, powerhouse cities over medium-sized cities is due to creaming, sorting, and particularly high-powered coalitions of rent-extractors, rather than hypothesized quadratic-returns-to-scale human connectivity effects.

Then, of course, there is all the stuff that economic analysis tends to overlook: Community, history, attachment to family, attachment to the land itself, the perhaps quaintly aesthetic notion that a civilized country should not be composed of gleaming islands in a sea of decay and poverty. And politics. Politics seems to be a thing now. Rightly or wrongly (and I think the question is more complicated than many of us acknowledge), the United States’ political system enfranchises geography as well population. …In the American system, piling people into a few, dense cities is a sure recipe for disenfranchising most of the humans. A nation of mid-sized cities distributed throughout the country would both spread the wealth geographically and yield a more balanced politics than the dream of hyperproductive megacities.

Finally, a fantastic and impassioned piece by Ryan Avent also tackles the regional inequality question, among many other recent failures of economics:

The economic literature is pretty clear that moving people from low productivity places to high productivity places is very good for both the people that move and the economy as a whole. It’s also pretty clear that place-based policies designed to rejuvenate regions which have lost their economic reason for being tend not to work very well. And one logical conclusion to draw from these lines of research is that government ought to care about people rather than places, should focus aid to struggling places on things like cash transfers or retraining schemes or efforts to boost the housing capacity of booming regions, and should not be sentimental about the prospect of once proud industrial cities emptying out. And maybe that logical conclusion is the right one.

But maybe that’s not the right conclusion at all. Maybe the right question, once again, is which is likely to be more corrosive of the legitimacy of valuable macroinstitutions: the long-run decline of whole regions of advanced economies, or the inevitable waste and inefficiency that would accompany an effort to revive those declining regions. And perhaps benign neglect would win that argument. Yet the argument ought to take place; economists should not ignore the relevance and importance of macroinstitutions and assume that the inefficiency is the clinching argument.

What I’ve been listening to lately

The last installment before I do my best-of-2016 list:

  • Lightnin’ Hopkins – All The Classics 1946-1951Some of my favorite blues. The main criticism of the Hopkins style of free-associating lyrics and loose solo guitar ramblings is that after a while they all sound like the same song. This criticism is not wrong; however, it is a very good song, and Hopkins has few equals in expressing that deep lonesome blues feel.
  • Adrian Younge & Ali Shaheed Muhammad – Luke Cage Original Soundtrack AlbumThe TV series has a guilty pleasure of late; I enjoyed the musical interludes and the black culture references a lot more than the silly bad guys. It is definitely one of the best soundtracks of recent times, though it does not hold up quite as well when listened to on its own.
  • Sam Rivers – A New ConceptionThe great avant-gardist does standards, and does them extraordinarily well. Every track is brilliant, as good as the much better known (and more readily obtainable) Fuchsia Swing Song, recorded a couple of years earlier.
  • Stan Getz – DynastyAre there any bad Stan Getz albums? I haven’t found one yet. This is an unusual recording for Getz, featuring him with a European organ-guitar-drums trio. But it is an unusual recording all around: one of the very few jazz organ recordings without even a whiff of soul jazz, only extended moody explorations.

The practitioner’s view of economic development: “We do what we must and then adjust as we go along”

The new book by Yuen Yuen Ang, How China Escaped the Poverty Trap, has some nice passages that give some of the flavor of how Chinese government officials went about developing their local economies. This practitioner’s perspective is often quite distant from the questions that animate scholars of economic development. Here is a sample:

My interviews with local bureaucrats in China deliberately included a question that has long been debated in academic circles: In your locality, do you think it was effective governance that led to growth or growth that enabled the governance to improve? The bureaucrats were consistently astonished by the naiveté of the question. To them, the answer is obvious: causation runs both ways. One regular cadre in a city-level agency, who had no scholarly training whatsoever, gave a memorably insightful reply:

“The economy and the bureaucracy interact and change together. If the economy is poor, then, inevitably, it will be difficult to improve governance. …In reality we do what we must and then adjust as we go along… There must be a process. It’s impossible for a government to reform overnight.”

More bluntly, another bureaucrat bureaucrat griped that the question posed was flawed. In his words, “To say that we should grow the economy and then improve the business environment, or vice versa, are both misguided. Obviously, we must pursue both at the same time, like the pursuit of material and spiritual development.”

These replies suggest that development as a coevolutionary process is a plain reality to many practitioners and probably lay observers too. It is no wonder that they dismissed the question as academic. …

How did development actually happen in Forest Hill? Did the city’s leaders heed the advice of international experts to establish good governance as a first step of development, namely, by furnishing secure property rights to private entrepreneurs and resolutely eradicating corruption? Or did it model itself after the developmental states of East Asia, by establishing technocratic state agencies and channeling resources toward targeted industries? Alternatively, did the city make do with “good enough governance,” delivering only minimal government performance and waiting until it had become sufficiently wealthy before improving governance? The answer to all three hypotheticals is no.

Ang’s own theory of China is a variant on the “regionally decentralized authoritarianism” or Chinese-style federalism argument, which puts the emphasis on the striving of local officials to generate growth. In particular, her book has some good detail on the systems for motivating and evaluating local government officials. But she also, correctly in my view, emphasizes how the pressure on local officials to generate growth ends up having very different outcomes depending on the characteristics of different localities.

The core of the book is a set of detailed narratives of a few different localities in China. These emphasize that government officials did not follow a consistent strategy, or gradually perfect institutions, but instead continuously adapted in response to changes in the economy. Rather than a one-way causation from institutions to economic outcomes, or vice versa, there is a constant feedback between the two. These accounts are well done and pretty convincing for the take-off period of the 1980s and 1990s. The Why Nations Fail crowd has never really managed to provide a decent account of Chinese economic development (which is a bit like having a theory of linguistics that fails to explain the grammar of English), and accounts like this that tackle the detail of China’s actual institutions are good to have as a corrective.

Still, Ang’s narratives get a bit less detailed and convincing as they move into the 2000s. For a book about economic development there is sometimes a vagueness about what has actually happened in China’s economy over the past decade and a half. The impact of the rise of township-and-village enterprises in the 1980s and the privatization of state-owned enterprises in the 1990s are well covered. Yet there is almost no discussion of the growth in foreign investment and exports that followed China’s entry into the World Trade Organization in 2001, or of the enormous real-estate boom that got started around 2003 and is still running, or of the global financial crisis of 2008 and the subsequent surge in infrastructure spending. The focus of the book is, as the title indicates, on the early stages of China’s growth boom, so these are not crippling omissions. But digging into these developments more would help answer the broader question of whether the feedback between economic change and bureaucratic decision-making in China has always been as positive as it was in the early stages of its growth take-off.

The American left has a surprising new enthusiasm for states’ rights

Many traditional US political alignments are being scrambled by Donald Trump’s election. We may soon be able to add to that list another one: the usual partisan attitudes towards the federal and local governments.

Trump’s victory in the Electoral College, despite his receiving about 2 million fewer votes than Hillary Clinton, has highlighted once again the way the US political system is designed to give power to places where relatively few people live. A recent NY Times piece has a good rundown of the history of this system:

The Electoral College is just one example of how an increasingly urban country has inherited the political structures of a rural past. Today, states containing just 17 percent of the American population, a historic low, can theoretically elect a Senate majority, Dr. Lee said. …

When the framers of the Constitution were still debating the shape of institutions we have today, 95 percent of America was rural, as the 1790 census classified the population. The Connecticut Compromise at the time created the Senate: one chamber granting equal voice to every state to counterbalance the House, where more populous states spoke louder.

And they made sure the compromise stuck. Today, equal state representation in the Senate is the only provision in the Constitution that remains singled out for protection from the amendment process; no state can lose its full complement of senators without its permission.

But even as a deliberately undemocratic body, the Senate has slipped further out of alignment with the American population over time. The Senate hasn’t simply favored sparsely populated states; politicians in Washington created sparsely populated states to leverage the Senate’s skewed power. … Republicans in Congress passed the 1862 Homestead Act, offering free land to settlers who would move to territories that would eventually become states — creating more Senate seats and Electoral College votes for a Republican Party eager to keep government control away from Southern Democrats. They even managed to divide the Dakota Territory into two states, worth twice the political power.

Population density explains a lot about recent voting patterns: low-density places tend to vote Republican, and high-density places tend to vote Democratic. So this quirk of the US system has large electoral consequences. The US population is also becoming steadily more concentrated in large urban areas. According to Census Bureau data, the share of the US population that lives in the 20 largest metropolitan areas (of which four are in California) has risen from 37.7% in 2010 to 38.2% in 2015, a steady pace of one-tenth of a percentage point per year. If this trend continues, and I don’t see why it will not, the structural disadvantage of Democrats in the Senate and Electoral College will only increase. So it will probably become harder and harder for Democrats to achieve unified control of the federal government.

This is a challenge to both parties’ historical self-image: Republicans have been the party of states rights’ and local autonomy, campaigning against federal overreach, while Democrats have been the party of federally guaranteed civil and political rights, campaigning against entrenched local inequality and discrimination. But with the federal government firmly in Republican hands for the next few years, and possibly longer, Democrats seem to be having a change of heart about the role of local governments. Democrats are now praising local governments’ sovereignty and autonomy as a way to preserve important rights and values–in much the same way that Republicans traditionally have.

Some of the public statements by Democrats since the election seem to me quite extraordinary in the historical context of their party. Brad DeLong’s recent declaration that “The sovereign equal dignity of the states is our friend, whatever happens at the national level” is one good example. There have also been many statements from Democratic local officials about their lack of interest in cooperating with any Trump administration crackdown on illegal immigrants. Probably the most striking speech was from New York City Mayor Bill de Blasio:

And part of what’s important to remember is our own power in this moment here in New York City and in cities around the country, because in the confusion something important has gotten lost. There is not a national police force. You don’t go to federal schools to get your children an education. No. We in the City of New York, we protect our people with the NYPD. We provide education to our children with our New York City public schools. We provide healthcare with our public hospitals; and all over the country the same. Our constitution says it – that so much of what is decided in the governance of our people is decided at the local level, according to the values of the people who are governed. In the Declaration of Independence there is one of the most simple and powerful passages – it says, governments are instituted deriving their just powers from the consent of the governed. We don’t consent to hatred.

And we will fight anything we see as undermining our values. And here is my promise to you as your mayor – we will use all the tools at our disposal to stand up for our people.

If all Muslims are required to register, we will take legal action to block it.

If the federal government wants our police officers to tear immigrant families apart, we will refuse to do it.

If the federal government tries to deport law-abiding New Yorkers who have no representation, we will step in. We will work and build on the work of the City Council to provide these New Yorkers with the lawyers they need to protect them and their families.

If the Justice Department orders local police to resume stop and frisk, we will not comply.

In the 1960s the US had Republican governors defying the federal government in order to preserve segregation; in the 2010s, we now have Democratic mayors threatening to defy the federal government in order to preserve immigrant- and minority-friendly policies. That is a pretty amazing turn of the historical wheel.

This shift also suggests that local sovereignty will be an enduring part of the American political system, even given the massive increase in the federal government’s power since the 1920s, as both parties can find reasons to support it when they are out of power at the federal level.

Zhao Lingmin on the roots of Chinese elite support for Trump

A definitive overview of this question is over at Ma Tianjie’s Chublic Opinion, but one of the sources in that piece I thought was worth digging into a bit more. It’s a column by Zhao Lingmin, originally published on the FT Chinese site back in October, that focuses on what the enthusiasm for Trump says about Chinese society. My translation follows:

Compared to his American supporters, Trump’s Chinese supporters have two notable differences. One, they have “true love” for Trump. Even though some Americans do not like Trump personally, or even despise him, they have still decided to vote for Trump because of their anger at the status quo. Trump’s supporters in China are not deciding who to vote for, and there are no real interests at stake; many of them simply like Trump himself. Second, it is widely recognized that some of Trump’s supporters in the US are not of high social status and belong to the lower middle class, so Hillary Clinton could say that half of them are “deplorables,” or “people who feel that the government has let them down, the economy has let them down.”

But among Trump supporters in China, there are some successful people and members of the elite: they are well-educated, rational, with high social status. On this point, you only have to look at WeChat or Zhihu; in those places public criticism of Trump’s remarks is rare, and there are a lot of people who excuse them or give them a positive spin.

Why is the Chinese elite not like the American elite in opposing Trump? There are different national conditions, there are differences of opinion, but in my opinion the most important difference between the two countries’ elites is the different environments they have grown up in. This has led some Chinese elites to endorse Trump’s views on political correctness, terrorism, Islam, and other issues.

Trump has been most criticized for his undisguised degradation and humiliation of immigrants, Muslims, and women, which for many American elites, whose awareness of equal rights comes from their baptism in the civil rights movement, is completely unacceptable. The recent revelation of the recording in which Trump insults women touched the bottom line of American society, and made some of the rest of the elite draw the line. By contrast, some of China’s elite, having risen up in an atmosphere of social Darwinism, do not find Trump’s statements so offensive as to cause anger and condemnation—although they do not quite endorse them either.

The past 30 years of China’s economic growth and social development began after a period of chaos [i.e., the Cultural Revolution], and there was no Enlightenment-like intellectual movement. Government officials, in order to mobilize reform, exaggerated the evils of the old benefit system as “everyone eating from one big pot,” which, with the assistance of some scholars, led to an almost complete social consensus that a market economy means completely free competition. With no restraint from ethics or rules, the “law of the jungle” that the weak are prey to the strong became nearly universal in society. Amid all the worship of the strong and disdain for the weak, an atmosphere of care and equal treatment of disadvantaged groups has not formed. Therefore “political correctness,” which is for the protection of vulnerable groups, basically does not exist in Chinese society, and the language of discrimination, objectification of women, and mockery of disabled people is everywhere.

This way of thinking is further reinforced among some Chinese elites: they succeed because they are better able to adapt to and dominate this kind of environment. In this process, they are hurt by others, they hurt others, and gradually they develop a heart of stone and a feeling of superiority—that their success is due to their own efforts and natural abilities, and the losers in competition must be those who don’t work hard because they are lazy or have some other problems. Therefore, they believe in free competition and personal striving even more than ordinary people, and also feel more strongly that poor people deserve their low position, are more wary of the abuse of welfare by lazy people, and are more supportive of Trump’s attacks on political correctness.

Many Chinese elites feel that the Democratic Party and the left represented by Hillary Clinton has turned a blind eye to the many problems of the black community, such as single mothers and the high crime rate, and put the blame on society rather than black people’s own issues. In order to protect the rights of transgender people, they have gone so far as to ignore public safety and allow them to freely choose whether to use male or female toilers. In the face of this obsession with political correctness, Trump has the courage to face reality and is willing to risk offending people in order to tell the truth—this is honest and admirable.

As for Trump’s insulting remarks about women, the Chinese elite also thinks that this is not such a big deal. You could say that many male members of the Chinese elite are the biggest beneficiaries of the current imbalance between men and women in China. The deformed marriage market has made them insufferably arrogant, and in terms of objectifying and demeaning women they are much worse than ordinary people. In the case of a male journalist who raped a female intern, most of the male colleagues supported him, and maintained that the woman was taking revenge on him for refusing her. In the case of a male professor who was suspended for molesting female students, many colleagues and students argued that the punishment was excessive, and some even doubted the female students’ mental state. In fact, a not inconsiderable number of men do not think there was anything fundamentally wrong with the actions of the journalist and the professor. People who have grown up in this kind of social atmosphere naturally cannot understand why Trump has been universally condemned for some dirty talk.

In addition, the vigilance against Islamic extremism displayed in Trump’s speeches is quite similar to the worldview of many of China’s elite. Since 9/11, “Islamophobia” has become a worldwide phenomenon, and China is no exception. Chinese Islamophobia has domestic causes, but it also cannot be separated from the impact of international events, particularly the refugee crisis and frequent terrorist attacks in Europe over the last couple of years. This has made many people shake their head at the European left, and think that Muslims are just using their high birth rate to occupy Europe and destroy the foundations of European civilization. European intellectuals and elites are so burdened by multicultural policies and political correctness that they cannot reject any plea from the refugees, do not dare to point out any of the issues with refugees, and even downplay crimes committed by refugees. Such naivety and wishful thinking in the end is nothing but nourishing a snake in one’s own bosom. Because of these views, Trump’s talk about banning Muslims and attacking terrorists is more welcomed by Chinese people than Hillary Clinton’s rhetoric about inclusiveness and cooperation.

Looking at the personal style of the two candidates, American elites do not like the fact that Trump’s speech is often illogical, vulgar and extreme. But in China’s imperfect market system, many elites come from rough backgrounds. Furthermore, decades of revolutionary ideology have made the whole society valorize coarseness, slovenliness, and lack of hygiene. This makes many people see Trump’s vulgarity and inconsistency as amusing, straightforward and honest. Hillary Clinton’s image as an orthodox politician, by contrast, leaves many people cold.

China’s Northeastern Rust Belt is headed for demographic crisis

We’ve been hearing a lot about the economic and political problems of America’s Rust Belt lately, so perhaps this is a good time to take a closer look at the slow-motion crisis that is unfolding in China’s northeastern Rust Belt. The Chinese newspaper Diyi Caijing (aka Yicai Media or China Business News) has over the past two months run a four-part series about the emerging demographic problems in the Northeast, and I think it pulls together what is known about the issue quite well.

This is harder than it might sound: a number of Northeastern cities have stopped publishing population figures in recent years, and data from the 2015 mid-cycle census update has not yet been published. But it seems more likely than not that the severe economic slowdown in the Northeast over the past couple of years has worsened the demographic trends that were already underway. When more data becomes available, which is likely to happen in 2017, the extent of the problem should become quite obvious. (For previous coverage of related issues, see: my maps of six decades of population flows in China; some history of the mass migration into the Northeast in the early 20th century; and portraits of industrial decay outside the Northeast)

Below I translate excerpts from all four articles, which I’ve reorganized a bit by topic (the original reports are here: Part 1, Part 2Part 3Part 4).

The first big problem is a dramatic decline in the birthrate:

The Northeast has a low birthrate, and population growth is stagnating. As early as 1982, the the total fertility rate in the three provinces of Liaoning, Jilin and Heilongjiang had fallen below the global replacement rate [of 2.33], to 1.773, 1.842 and 2.062 respectively, noticeably below the national average of 2.584. Afterward, as the one-child policy was implemented, the total fertility rate of the Northeast fell below 1.0, and in 2010, the the sixth population census showed that it was only 0.75.

What’s behind this fertility situation? There are a lot of state-owned enterprises in the Northeast, and they strictly implemented the one-child policy, so there were not many excess births.

As the “first born” of the People’s Republic, industrialization was earlier and more extensive in the Northeast than in other places. Large state-owned enterprises across the three northeastern provinces provided people with an enviable “iron rice bowl,” but also more stringent birth control. A 58-year-old Harbin taxi driver, Mr. Zhu, told this reporter that in those years, when he used to work at a state enterprise, the pay was high, the benefits were pretty good; he had a lot of face and more confidence in finding a partner. Everyone valued those state-enterprise jobs, so very few people were willing to lose the iron rice bowl in order to have more children than allowed. Even in the countryside, because of the large numbers of state farms and state forests, people needed to keep their iron rice bowls, so very few dared to violate the family-planning rules.

“All these years, among my colleagues, relatives, friends, there is not one who violated the family planning policy. Doing that would mean unemployment, so who would dare?” Mr. Zhu said.

Aside from the family-planning policy, a high urbanization rate is another important factor depressing the fertility rate in the Northeast. Research shows that the fertility rate is inversely related to the urbanization rate–the higher the urbanization rate, the lower the fertility rate. Urbanization in the Northeast preceded rest of the nation by decades. Statistics show that in 1975 the national urbanization rate was 17%, but in the Northeast it was already 35%; in 1990 the national rate was 26% and the Northeast was 48%; in 2010, the national rate reached 50%, but the Northeast was already 58%.

The second big problem is an exodus of people to other provinces:

The Northeast was once a place that attracted a major inflow of people–the “Chuang Guandong” [the massive migration of Han Chinese to Manchuria from the late 19th century through the 1940s] has even today left a deep impression in many people’s memories. But a net inflow of population is now history. According to the Liaoning Blue Book published by the Liaoning Academy of Social Sciences, the fifth population census of 2000 showed there had been a net inflow of 360,000 people into the three northeastern provinces over the previous ten years, but the sixth population census ten years later showed there had been a net outflow of 2 million people.

Luo Dandan, a researcher at the Heilongjiang Academy of Social Sciences, has spent years following up those survey results, and says that the outflow of people from the three northeastern provinces has sped up in recent years. Looking at individual cities, the trend of population outflow is also very obvious. Figures from the municipal statistics bureau of Qiqihar [in Heilongjiang province] show that city had net outmigration of 37,779 people in 2014; the figure was 25,381 people in 2013, so the the outflow is accelerating.

Luo says that in peacetime most population movements are for economic reasons, and that it is uneven economic development in different regions that drives workers to move to places with better job opportunities and higher wages. According to the National Bureau of Statistics, the average urban wage in the Northeast was 57,319 yuan in 2015, below the national average of 62,029 yuan.

Such an obvious gap in income levels drives many young people and technical personnel to choose to “migrate to the southeast like the peacock.” According to a cadre in the Heilongjiang province human resources and social security system, the outflow of university graduates is a major concern for him. Every year in the graduation period of May and June, the hotels near the Harbin Institute of Technology are fully booked with recruiters from Zhejiang and other coastal provinces.

The combined result of these two trends is a population that is aging rapidly:

Because the birthrate is low, the aging of the population in the Northeast is quite serious. According to Liu Kegu, a former vice-governor of China Development Bank, the median age of China’s population was 38 in 2015; but in the Northeast, it was 43, a level that the whole country is not expected to reach until 2027. One direct impact of an aging population is the burden of pensions. The dependency ratio of corporate pensions (the ratio of the number of workers in the pension program to the number receiving a pension) is 1.55 in the Northeast, far below the national average of 2.88. Liaoning is 1.79, Jilin is 1.53, and Heilongjiang at 1.33 is the lowest in the nation.

The low fertility rate has created a serious problem of fewer young people. Demographic statistics show that the Northeast’s share of youthful workers aged 20-39 has fallen from 10% in 1982 to 8.1% in 2010. And in 2010 the Northeast’s share of the population aged 0-19 was 6%, which means that in 2030 the Northeast’s share of the 20-39 youthful workforce will be 6% of the national total.

Zhou Tianyong of the Central Party School argues that this age group is the main economic force in the population, so the decline in the numbers of this group will have a great impact on the economy through labor supply, consumption, investment and other factors.

Another manifestation is the aging of the workforce. In terms of absolute numbers, the working-age population in the Northeast is still quite substantial, but one-third of this population is aged 45-64, so the aging of the workforce is indeed serious.

Population movement also further exacerbates the aging of the population in the Northeast. The Northeast has experienced a net out-migration of population for 20 years, and more than 60% of Northeasterners who leave do so for economic or business reasons. An official report has warned that, because of the fertility level and migration trends in the Northeast, the region is already locked into a trajectory of rapid population loss.

Is there anything to be done? The recent economic troubles have in fact gotten a lot of official attention, and the central government is backing a new version of the “Revitalize the Northeast” campaign. But it does not seem like the demographic aspects are being discussed much:

This reporter has attended many meetings on “Revitalizing the Northeast,” and heard many Northeastern governors and mayors discuss the road to revitalization, but unfortunately not one mentioned that the Northeast is facing a population crisis.

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