China’s slowing economy: the view from the Henan heartland

The Wider Image: China's slowing economy: the view from the Henan heartland
Locals and retired workers watch a Chinese opera performance that Xinyuan Steel put on outside its factory to mark the end of Chinese New Year festivities in Anyang, Henan province, China, February 19, 2019. REUTERS/Thomas Peter

May 17, 2019

ZHENGZHOU, China (Reuters) – Considered the cradle of Chinese civilization, the central province of Henan and its 100 million-strong population typifies China’s transformative yet often tumultuous economic ascent.

Long the sort of impoverished backwater that people left in search of better lives, Henan has in recent years enjoyed the fruits of an economic boom that has raised incomes and given people a taste of middle class lifestyles and aspirations.

Zhengzhou, the provincial capital, was transformed into a transportation and logistics hub complete with a futuristic skyline and luxury malls, crisscrossed with freeways and connected by high-speed rail to more affluent cities like Beijing and Shanghai. A vast Foxconn factory in the city, employs almost a quarter of a million people and churns out most of the world’s iPhones.

However, the gains achieved in Henan and other inland provinces appear fragile, as living and housing costs rise, and China’s economy slows. That is threatening the aspirations of a generation of young Chinese in cities like Zhengzhou. (Click to see a picture package of Henan.)

The slowdown also undermines one of the government’s main hopes for transforming the economy by spurring domestic spending, as well as spreading wealth to the interior of China, which has long lagged the coastal regions that gave birth to China’s four-decades-long economic boom.

Reuters reporters traveled to six cities across Henan, from bustling Zhengzhou to the smog-choked industrial hub of Anyang in the north, interviewing dozens of residents from all walks to life to document how the economic slowdown feels in the heart of China.

This series tackles some of the crucial issues facing Henan, and the broader Chinese economy: a property boom that appears to be coming to an end; a slump in consumer spending; an anti-pollution campaign that has had a crippling economic impact on many cities and towns, even as their people are breathing more easily; and the undermining of dreams of upward social mobility.

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