Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Empty streets and vacant buildings in Dandong, China. Photo: Zhang Peng/LightRocket via Getty Images

Chinese megacities like Beijing, Shanghai and Shenzhen are capturing the world's attention with their glittering skylines, Fortune 500 firms and outsized wealth, but the country also has hundreds of shrinking, forgotten cities that are beginning to resemble America's Rust Belt.

Why it matters: The slowdown in these once-booming industrial towns is chipping away at China's economic might.

Background: In the Mao era, China opened massive state-owned steel plants and coal mines in the northeast of the country to jump-start the economy. For the next 4 decades, the materials and energy coming out of that region fueled China's rise, helping build its gargantuan cities.

  • But as China's economy started to modernize and shift away from heavy industry toward services, the plants, which were sucking government money, were downsized, putting millions out of work.
  • Now, the government is investing in its own Silicon Valley — coastal cities like Shenzhen and Hangzhou that are home to Tencent and Alibaba — and the industrial centers are getting left behind, says Shehzad Qazi, managing director of China Beige Book, which analyzes China’s economy based on thousands of surveys of Chinese companies.

Today, many of the shrinking cities in northeastern China are full of quiet streets and empty shops, as more and more young people go to the megacities to find work delivering packages or waiting tables at restaurants.

  • Among the people who are still there, "you’re beginning to see opioid addictions," says Nathan Attrill, a scholar at Australian National University who studies the region. "There’s a depression settling in that there is no future."

By the numbers: A recent analysis from Tsinghua University identified 180 cities in China that are losing people — and many of them are in the northeast.

  • Northeastern China's share of the country's GDP was around 6% in 2018, reports the South China Morning Post. Compare that to the 11% it commanded in 1990.
  • On net, 22% fewer companies reported new hiring between the second and third quarters of 2019, according to China Beige Book. That was largely driven by a steep decline in manufacturing jobs, Qazi says.
  • If northeast China were its own country, it would have the lowest birthrate in the world, says Attrill.

But, but, but: While the U.S.-China trade war is hurting other parts of the Chinese economy, its rust belt is actually benefitting, Attrill says. Half of the soybeans China consumes are grown in the northeast, and the region is becoming key as the country stops buying American soybeans. Most of the goods produced in the northeast are sold domestically, so it doesn't rely on exporting to the American market.

What to watch: "China is obsessed with social stability, so when you have a lot of unemployed workers in one place that really worries them," Attrill says. So far, no plan to re-energize the northeast has worked. "They’ve had to revitalize their revitalization plan twice since 2003."

  • And the government may soon have to deal with more rust belts as factories in other parts of the country shut down. "Chinese officials are already talking about the regions around Shanghai and Guangdong going through their own deindustrialization," Attrill says.

Go deeper

1 hour ago - Health

Biden says it's "not the time to relax" after touring vaccination site

President Biden speaking after visiting a FEMA Covid-19 vaccination facility in Houston on Feb. 26. Photo: Mandel Ngan/AFP via Getty Images

President Biden said Friday that "it's not the time to relax" coronavirus mitigation efforts and warned that the number of cases and hospitalizations could rise again as new variants of the virus emerge.

Why it matters: Biden, who made the remarks after touring a vaccination site in Houston, echoed CDC director Rochelle Walensky, who said earlier on Friday that while the U.S. has seen a recent drop in cases and hospitalizations, "these declines follow the highest peak we have experienced in the pandemic."

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Most COVID-19 survivors can weather risk of reinfection, study says — "Twindemic" averted as flu reports plummet amid coronavirus crisis
  2. Vaccine: FDA advisory panel endorses J&J COVID vaccine for emergency use — About 20% of U.S. adults have received first vaccine dose, White House says — New data reignites the debate over coronavirus vaccine strategy.
  3. Economy: What's really going on with the labor market.
  4. Local: All adult Minnesotans will likely be eligible for COVID-19 vaccine by summer — Another wealthy Florida community receives special access to COVID-19 vaccine.
  5. Sports: Poll weighs impact of athlete vaccination.

The week markets went wild

Illustration: Lazaro Gamio

The markets just closed out a manic week.

Why it matters: Outsized — and in some cases historic — moves were evident across the board.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!