[Big read] Can new industries lure talent back to China’s rust belt?

(Edited and refined by Josephine Hong, with the assistance of AI translation.)

“I’m out of options and savings. Coming back means my parents can support me — at least I don’t have to pay rent.”

After working in Beijing’s media and content operations industry for nearly a decade, Feng Jingyuan, a 33-year-old native of Dandong, Liaoning, returned to northeast China last year following unpaid wages and layoffs. She chose to settle in Shenyang, the provincial capital of Liaoning, near her hometown. Yet, her return was far from enthusiastic. She admitted, “If I had a choice, I would still want to head south.”

Population decline easing

She thought Shenyang’s lower cost of living would make life easier, but her job search became a reality check. Positions listed on recruitment sites with salaries of 5,000 RMB to 10,000 RMB (US$745 to US$1,490) mostly turned out to be “base salary + high-commission” traps. One day off a week and unpaid overtime were “hidden terms” revealed only during interviews.

As for the much-touted relaxed, stress-free atmosphere of northeast China, she disagreed: “Which boss is going to pay you 5,000 RMB just to sit around and slack off?”

Her temporary return to Shenyang relies heavily on a “generational safety net”, with her parents covering her rent and social security. She had managed to land a job providing outsourced services for a major tech company, but the project she was assigned to fell through a week before her interview, plunging her back into an unpaid “vacation”.

Feng’s experience offers a glimpse into the changing patterns of population movement in northeast China.

Although the total population of the three northeastern provinces continues to shrink, fewer people are moving out, while the population is becoming increasingly concentrated in core cities. For example, Liaoning recorded a net inflow of 45,000 permanent residents from other provinces last year. This marks the second year of net population inflow after Liaoning reversed 11 consecutive years of net outflow in 2023. However, when factoring in natural deaths and low birth rates, the total population still decreased by 240,000. Meanwhile, provincial capital Shenyang saw its permanent population grow by 33,000 last year.

Li Kai, a professor at the Academy of Northeast Revitalization at Northeastern University, told Lianhe Zaobao that the northeast’s population issue could be described as an “iceberg”. Taking Liaoning province as an example, its cities Shenyang and Dalian were the first two to show population growth. As the “icebergs” of Shenyang and Dalian take the lead in thawing, “the overall iceberg has begun to melt, and the structural dynamics of the northeast are shifting — it’s no longer as severe as in the past.”

Meanwhile, Yao Shujie, an economics professor at Chongqing University, analysed that employment and income remain the core drivers of population migration. When earnings elsewhere are insufficient to cover rent, high living costs and the emotional expense of being away from family, returning home is a rational choice. However, lower living costs only lower the threshold for returning; it is not a reason to stay. “Without a job, there is no income, and high-quality living is out of the question,” he said.

Cheap living, tough earning

Shenyang natives Xiao Zhao (32, programmer) and his wife Xiao Yu (pseudonym, 32, clerk at a state-owned enterprise) once compared daily expenses between Shenyang and Nanjing. In Shenyang, one can rent an apartment near work for 800 RMB and have a filling meal of chicken noodles for 11 RMB; in Nanjing, a 50-square-metre apartment costs 2,500 RMB a month in rent, and a 20-RMB bowl of noodles leaves you barely satisfied.

Yet, accompanying the lower cost of living are low salaries and a scarcity of suitable jobs. When Xiao Yu returned to Shenyang after being transferred from Nanjing for work, Xiao Zhao was unable to find an appropriate position in the same city and had no choice but to continue working in Zhejiang.

With their baby due in September, Xiao Zhao feels anxious but helpless. Aside from state-owned enterprises, public institutions and civil service roles, he found most jobs in Shenyang “poorly paid and exhausting”. He reflected, “Shenyang feels increasingly unsuitable for young people.”

This indirectly echoes what a Shenyang taxi driver remarked, “Jobs are easy to find, but money is hard to make.” His point was that low-tier roles such as food delivery and service work are available, but they are physically gruelling and poorly paid.

“The generation that had it best in the northeast was my father’s — he’s in his 70s now. That was the northeast at its peak,” the driver said, describing the glory days of his parents’ youth.

From the 1950s to the 1970s, as the core city of the northeast’s old industrial base, Shenyang gathered a massive concentration of heavy industry enterprises and state-owned institutions, and was often dubbed “the Republic’s eldest son”. Working in a factory was not merely a job; it represented guaranteed housing, healthcare, education and a relatively stable lifestyle. Those roaring industrial years now rest preserved in the Industrial Museum of China in Shenyang’s Tiexi district.

When asked what pillar industries Shenyang boasts today, local taxi drivers struggle to name any, with some even thinking that “Shenyang has nothing much left”.

Shenyang is certainly not devoid of industry; its foundation in automotive and equipment manufacturing remains intact, while emerging sectors such as robotics, smart manufacturing, aerospace and integrated circuits are being cultivated. The critical question, however, is whether these industries can translate into accessible employment and tangible economic vitality for everyday people.

Since the implementation of the Northeast Area Revitalization Plan in 2003, the region’s industrial structure has undergone continuous adjustment. Yet, deep-seated issues — such as population loss and an underdeveloped private sector — remain unresolved at their roots.

Chinese President and Communist Party General Secretary Xi Jinping visited Heilongjiang in September 2023 and Liaoning in January last year. When he chaired a key meeting in Heilongjiang in 2023 on promoting the comprehensive revitalisation of northeast China, he said that the real economy is the “foundation” of revitalisation, sci-tech innovation is the “key”, and industrial upgrading is the “direction”.

He called for faster digital and intelligent transformation of traditional manufacturing, cultivating emerging strategic industries and future industries, and greater support for the healthy development of the private economy.

Employment stunted by high entry barriers for emerging markets

Northeast China has long received close attention from the central government, driven by strategic interests in food security, energy, national defence and Northeast Asian cooperation, as well as the fact that its transformation and demographic shrinking reflect challenges common to old industrial regions.

In the past, massive state-owned enterprises could simultaneously absorb engineers, skilled technicians, general workers and support staff, building a comprehensive employment ecosystem. However, that model has long since been rewritten.

In the first half of this year, the GDP of Liaoning, Jilin and Heilongjiang grew by 2.5%, 2.4% and 3.5% respectively — all falling short of the national average of 4.7%. Broken down by sector, the secondary industry value-added in Liaoning and Jilin dropped by 1.3% and 2.1% respectively, while Heilongjiang’s grew by 1.6%. While industrial performance varied across the three provinces, the growing pains from transitioning between old and new growth drivers persist.

These growing pains are also reflected in a structural reshaping of talent demand. In the 2025 Shenyang Demand Catalog for Urgently Needed Talent in Key Industries (《2025年沈阳市产业急需紧缺人才需求目录》), jobs across four major industrial clusters — advanced equipment, integrated circuits, biomedicine and next-generation information technology — accounted for nearly 60% of total demand. Emerging industries demand higher levels of specialised knowledge and skills, concentrating roles in research and development (R&D) and technical expertise, making it difficult to replicate the comprehensive hiring structures of the past.

This mismatch between supply and demand also presents recruitment hurdles for businesses. According to earlier reports by Xinhua, the head of production at Shenyang Xitai Technology noted a shortage of skilled talent, such as CNC (computer numerical control) lathe operators. While companies are willing to train workers, young job seekers show little interest in factory floor work.

At the same time, industrial upgrading is creating specialised technical positions with higher entry barriers. At a dedicated job fair held at the Shenyang International Software Park in March, 80 companies offered over 1,000 specialised positions spanning software development, artificial intelligence (AI) and algorithm development.

While manufacturers struggle to recruit skilled technicians and emerging industries post jobs with high technical barriers, the core issue is not a lack of job opportunities. Rather, it is whether the skills demanded by industries align with the capabilities and employment preferences of job seekers. Job hunters face a tangible gap between job requirements, salary expectations and their actual skill sets.

Professor Li assessed that young people are not necessarily attracted by the largest enterprises, but by industries and roles that are “technically sophisticated and keep pace with modern societal development”. Currently, traditional industries still dominate the northeast, and emerging sectors have yet to become the leading economic engine. However, traditional industries are being transformed through AI and digital technologies, making areas such as semiconductor equipment and AI potential new growth drivers.

Li noted that the transformation of the northeast is not a simple exit of traditional industries followed by an immediate takeover by emerging ones; the gradual shift between old and new drivers is a long-term process. He emphasised, “The transformation of the northeast will take time, and everyone needs to be prepared for the long haul.”

Cumulative shortfalls hindering private enterprises

Some high-tech, capital-intensive enterprises generate relatively few direct jobs. Expanding overall employment still requires coordinated efforts across the private economy, innovation and entrepreneurship, and modern services.

Liaoning University academics Yu Miaojie and Yang Boye wrote that the private sector in northeast China lacks vitality. They argued that the space for private enterprises must be expanded, ensuring equal treatment in areas such as access to resources and factor pricing, while encouraging private firms to pursue “specialised, refined, unique and innovative” growth.

Li believes that the issue facing private enterprise development stems from the firms’ own lack of strength, which is inextricably linked to the business environment and institutional mechanisms. He said, “It’s a series of small shortfalls — government services, approval efficiency, and service-mindedness towards businesses each fall a little short. Each area might only be slightly lacking, but this cumulatively creates a distinct gap in the overall environment.”

Liaoning has listed optimising the business environment as a major task for its 15th Five-Year Plan (2026–2030). The province proposes strictly regulating administrative inspections for businesses, promoting inclusive, prudent regulation and flexible law enforcement, and clamping down on non-compliant cross-regional law enforcement and profit-driven enforcement practices.

At the same time, industrial transformation is reshaping the employment structure. Liaoning is driving the digital, networked and intelligent transformation of traditional manufacturing. This means industrial upgrading requires not only high-end R&D talent, but also a reinforced “middle tier” of technical and skilled workers who understand technology and can operate advanced equipment.

Pull of close-knit community

The legacy of northeast China’s old industrial cities includes not only empty factory floors, but also the interpersonal bonds of tight-knit communities — and the work ethics derived from them. Some interviewees noted that aside from core job duties, working in certain organisations requires dealing with interpersonal pressures such as gift-giving, social favours and knowing how to “play the social game”, as well as traditional bureaucratic mindsets.

After returning to Shenyang, Feng Jingyuan’s father offered to introduce her to a job at a public institution, provided she removed her tattoos. She refused, saying, “Since I got them, I never intended to get rid of them.”

Meanwhile, the genuine warmth of these close-knit communities acts as a powerful pull factor for returnees.

When young couple Zhao Wenzheng and Yang Huan — who spent years working in Beijing, Shanghai and Hangzhou — returned to Shenyang to open a bakery, customers helped them find carpenters, and neighbours proactively connected them with business resources.

Yang said, “Northeasterners would treat your business as their own. While big southern cities operate with high efficiency, the warmth of people in the northeast gets things done. We’ve become great friends with many customers and neighbours, which fills us with emotional value — a feeling unique to the northeast.”

Sculptor Xu Erer, who previously ran businesses in Hainan and Shenzhen, is another Shenyang returnee. When his car broke down in minus-20-degrees-Celsius weather, over a dozen strangers including a Didi driver gathered to help jump-start the battery. In the end, the driver refused to accept any money. That warmth amid the freezing cold convinced him right then to stay.

“Southern cities emphasise boundaries and rules,” he remarked. “The northeast has less calculated distance — it’s more traditional, sincere and raw.”

Bathhouse economy trending but not yet a pillar industry

While warmth can ease daily life, it cannot replace economic development. As traditional industries’ capacity to absorb labour declines, Shenyang is seeking new growth engines. Sectors such as culture, sports, tourism, local sports leagues, and food and beverage continue to expand. Shenyang’s “bathing culture economy” in particular has frequently gone viral, with bathhouses evolving into one-stop lifestyle venues integrating dining, entertainment and accommodation.

Professor Li believes that signature consumer experiences such as bathhouses can form Shenyang’s urban consumption culture and regional brand and drive related spending in dining, transport and accommodation, but it will not become a core pillar industry. He projected that the northeast will most likely follow a pattern of “following broadly, breaking through selectively” — whereby the region as a whole follows the development of the national economy, while select cities, industries and niches achieve breakthroughs ahead of others. If population dynamics, industrial growth and urban development reinforce one another, “a virtuous cycle will emerge, which would be a welcome sign.”

For Feng Jingyuan, all she wants is a stable nine-to-six job with two-day weekends that allows her to maintain her physical and mental health. While on her involuntary “vacation”, she scrolls through job postings and reassures herself that life in Shenyang is comfortable. Yet the long northeastern winter remains a major drawback. She said, “I just want to go somewhere warm, doesn’t matter whether it’s a first-tier city.”

Far away working in Zhejiang, Xiao Zhao is still waiting for an opportunity to return to Shenyang to reunite with his wife and child. Meanwhile, Xu Erer, running his own studio, has firmly decided to take root in his hometown, saying, “Coming home feels secure — it fits my own pace of life much better.”

Some struggle in uncertainty to find a reason to stay; some wrestle with the difficulties of living apart from families; others, after wandering far and wide, have finally anchored their lives back in their hometown.

Bringing in expertise from coastal regions

In recent years, officials with experience in economic governance from China’s developed coastal provinces have gradually assumed leadership roles across the northeastern provinces, bringing coastal economic governance practices into the region.

In addition to secretary of the Jilin Provincial Committee of the Chinese Communist Party Huang Qiang, both secretary of the Liaoning Provincial Committee Xu Kunlin, and secretary of the Heilongjiang Provincial Committee Xu Qin, have prominent backgrounds in developed coastal regions.

Xu Kunlin, 61, had served as vice-mayor of Shanghai, party secretary of Suzhou and governor of Jiangsu. Xu Qin, 65, worked in Shenzhen for a long period, having served as mayor and party secretary of Shenzhen.

Tasked with governing a region facing industrial transformation, demographic contraction and private sector growth pressures, Xu Kunlin and Xu Qin have prioritised optimising the business environment, developing the private economy and accelerating industrial upgrading as major focal points.

On the first working day of this year, Liaoning convened a province-wide conference on optimising the business environment. Speaking at the conference, Xu Kunlin declared that improving the business environment is Liaoning’s “most important, practical and urgent strategic task” for the 15th Five-Year Plan period. Directly addressing issues such as government credibility, administrative inefficiency, diluted policy implementation, extortion and rampant reliance on personal connections, he called for the normalisation of “handling affairs without personal connections, and exercising power without seeking personal gain”.

At the corporate service level, Liaoning introduced a system pairing provincial leaders with enterprises. Since November last year, every provincial leader has maintained routine contact with 20 key enterprises to directly address corporate concerns.

Xu Kunlin also linked leadership performance evaluation with industrial transformation. Speaking at a study session of the Liaoning Provincial Committee’s Theoretical Study Center Group on future industries such as quantum technology late last year, he stressed that officials must “practice a correct view of performance — basing efforts on the present while focusing on the long term”. He urged officials to embrace the mindset that “success does not belong to one person”, and be willing to lay the groundwork and “plant trees for future generations to enjoy the shade”.

Meanwhile, Xu Qin has emphasised drawing on Shenzhen’s experience. During working talks between Heilongjiang and Shenzhen in March last year, he called for learning from the “Shenzhen speed” and “Shenzhen quality”, deepening cooperation between Heilongjiang and Guangdong as well as Shenzhen in high-tech industries, the digital economy, industrial transfers and talent exchanges.

This article was first published in Lianhe Zaobao as “回流东北 烟火温情难抵就业寒霜”.

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