Population Is a Problem | A City of 1.1 Million Where Nearly a Quarter Are Old. This Is Everyday Life There

Benxi, a resource-exhausted city, is no isolated case.

About 600 meters from the busiest commercial district in Benxi, Liaoning, there is a park. From morning to night it belongs to the grandparent generation — singing, dancing, playing cards, playing mahjong, writing characters on the paving tiles with brushes half as tall as they are. Voices and music blur together into a hum you can hear from a long way off.

In the early 1980s the city government rebuilt a run-down neighborhood park, installed slides, a carousel and a "space rocket" ride, and named it Children's Park. Nearly 40 years on, the rides survive only in old photographs. People in Benxi now say this is no children's park — it is plainly a park for old men, a park for the old.

Benxi is aging fast. In 2016, a report by the Benxi Development and Reform Commission showed that primary school enrollment had fallen from 5,200 per 100,000 residents in 2006 to 3,600 in 2013, and middle school enrollment from 6,400 per 100,000 to 4,200. The share of residents over 60 shot up from under 10% to 23.6% by 2016.

The scene at Children's Park is the city in miniature. With 1.1 million urban residents still packed into a 40-square-kilometer core, the sheer size of the population keeps Benxi looking lively, at least on the surface, and has spared it the fate of American Rust Belt cities after heavy industry left.

But beneath the crowds, a city whose main population is now old has gone gray and slow. Half-built, abandoned towers are not rare. Plenty of street-front shops have hung out signs saying "closed" or "lease for transfer." A hotpot and barbecue restaurant with an expensively finished facade has an overdue-payment notice from the water company taped to its door. Even on Yongfeng Pedestrian Street, the busiest shopping strip, one turn brings you to a wide field of rubble, bricks and tiles scattered across it.

Nobody feels the slump more directly than Zhang Xin, a real estate agent.

Zhang Xin runs a small agency in southern Benxi, not far from a Wanda Plaza under construction. Ten years ago he sold fruit. Fruit was hard work, so he spent 1,500 yuan to qualify as a property agent. A decade later he has watched that business collapse too: "Some months this shop doesn't close a single deal. Some months it's two or three."

Housing sales in Benxi began sliding hard in 2013. Five years ago, new homes sold covered 5.271 million square meters; by 2016 only 728,000 square meters were left. In 2017, floor space under construction was 4.239 million square meters, down 25.7% from the year before.

Unlike agents elsewhere, Zhang Xin sells more than houses. He also fronts cash to buyers, lends against salary cards and does other work closer to finance. Benxi's agencies generally cram their signboards with everything they will take on. "Property alone doesn't work. There isn't enough volume."

People do come in. In under twenty minutes Zhang Xin received two women who looked to be in their fifties. One wanted a storefront for a friend who was starting a business. Zhang Xin recommended a unit near the Wanda site. "Once Wanda opens and pulls people in, this area will fill up." Hard to say whether that was the pitch talking. After she left, he pointed through the window at the row of shops outside: "Restaurants have been folding these past two years. The ones still hiring are the old ones. Almost nothing that opens now survives."

The second woman had come to list her own apartment: 30-odd square meters, west-facing. She made a point of telling Zhang Xin it was in a good school district, and asked 80,000 yuan. He wrote everything down. Then he closed the notebook, watched her get far enough away, and grumbled: "At 60,000 I could sell it. School-district places are cheap now. There aren't any kids."

By his account, secondhand prices in Benxi have been falling for years. "Mainly there's nobody coming in from outside, not much of a floating population, the total population is dropping — and there are more and more apartments."

Benxi has been shrinking for more than a decade. Between 2000 and 2016 its registered population fell from 1.571 million to 1.499 million. The 18-to-35 group fell fastest of any age band, from 362,000 in 2010 to 309,000 in 2016.

That is the trap. Fewer people means less demand, and the city contracts; as it contracts it holds less for the young. As 24-year-old Liu Yuan put it: "Subconsciously I just feel I should be working somewhere else, that I shouldn't come back."

Benxi cannot give young people what they want. Its shopping is all built around the train station, four malls within a short walk of one another. Apart from Ginza Shopping Plaza, which has a few import-trade stalls selling clothes wholesaled from South Korea, the rest — Hualian Department Store, the Benxi Commercial Building, Hualian again — are near-identical. Given the choice, people in Benxi would rather go straight to Shenyang, where there are more brands and more to buy.

Liu Yuan finds the entertainment here "extremely dull": "Eat, see a movie, go shopping, walk around, look at scenery — that's it." She loves animated films like Big Hero 6 and Frozen, and wants to go to Shanghai Disneyland. "Bowling, archery — if you want to try any of that, don't even think about it in Benxi. If Benxi has it at all, it's the stripped-down version."

It isn't that local businesspeople refuse to offer such things. It is that Benxi cannot support that kind of market, least of all in the past three or four years.

Tang Lin runs a chuanchuan skewer shop on Yongfeng Pedestrian Street. It is small: five or six tables on the left, three large freezers of skewers on the right. She works the register and cooks the side dishes herself, alongside her mother and her mother-in-law.

When she opened a year ago, Benxi had never had chuanchuan, and the novelty kept a line outside the door. Lately, even though the winter has just broken and people who sat out the northeastern cold are out on the streets again, most of that novelty has worn off, and business has gone quiet.

Tang Lin is reasonably happy with the year, happy enough that she handed off the Sichuan restaurant she used to run to concentrate on skewers. But she knows the coming year will not be as good. She is trying everything to find more revenue: signing up for Meituan food delivery, adding hotpot-style dishes.

"Anything Benxi doesn't have yet should run hot for a while. It depends on your average check. Ten-something yuan a head, that works. Any pricier and it falls flat." Business, she says, is nothing like it was seven or eight years ago.

Wang Li reckons that a snack shop that could clear 200,000 yuan a year seven or eight years ago might clear 100,000 now. "That's how far it has dropped." She works as a sales assistant at an outdoor-gear store in Benxi, selling clothes carrying labels like Arc'teryx and Under Armour. The sign outside promises monthly shipments direct from Shenzhen.

Asked what the store takes in on an average day, Wang Li struggled to answer — not because she minded saying, but because the swings are too wide to give a number. "It's perfectly normal to go days without a sale. Foot traffic and spending are both worse than before," she said. "It's bad across the board. Running a shop just keeps you living."

"Benxi is a resource city. The three original pillars were steel, coal and cement. These past few years have gone badly, and every weakness of the state-owned enterprises has come out. Most industries have shrunk." Zhu Rui is 62. He spent decades at a local bank, and the loan files that crossed his desk shaped his own reading of the city's trouble. "Liaoning used to be called the Republic's eldest son. It gave the country a lot. As for why it has fallen behind — my view is the state-owned share of the economy is too heavy. It's a system problem, of course."

On system problems his wife, 61-year-old Wang Xia, may have the better claim. Five or six years ago she retired from a state-owned factory in Benxi and was immediately rehired. That company has now nearly finished going through bankruptcy, and her retirement is about to become real.

Wang Xia started work in 1980. Under the job-assignment system she was first sent to an embroidery mill, then moved to electronics. "Back then, for a girl to get into electronics — it was pretty. White coat, slippers. You worked in little white gloves. So pretty, and hard to get into," she said. "Later on, once things opened up, it was over."

Under the planned economy, people, markets and money were all tightly controlled. The technical staff at her company, Wang Xia recalls, all came from Tsinghua University, which kept the product good.

After reform and opening-up, technical people went south for higher pay, and the company's bench emptied out. Southern firms were turning out the same products at lower prices, and hers slid steadily into trouble. "At least early on there was some profit. At least wages weren't in arrears, and the other payments weren't either. Then bit by bit it started falling behind on pension contributions, on medical insurance."

She once had a chance to move to a credit cooperative, around the end of the 1980s or the start of the 1990s. "Back then a credit co-op was no different from a factory. They made 38 yuan a month; we made 38.6. So I didn't move. Then reform came, everything opened up, their pay went up and our company was finished. And I was getting on. So, forget it, just keep going."

Zhu Rui has had it far easier. Chinese banking is still dominated by state-owned firms and faces little outside competition, and with China's asset bubbles of recent years, banks have collected the gains directly. All of which has made a job in a bank enormously valuable.

Because of that job, Zhu Rui now earns about twice what his wife does. Wang Xia sounds a little sore about it: "I used to make a few mao more than him." She no longer has to think about it. The bankruptcy will wrap up soon, and after that there will be no wages to argue over.

System problems dragged down the performance of the state-owned firms. For Benxi that matters far more than one bankruptcy and a few hundred lost jobs. When a state-owned enterprise is a city's pillar industry, the whole city is built to run around it.

In Benxi, that enterprise is Benxi Iron & Steel Group, or BX Steel.

Its predecessor was the Benxihu Coal and Iron Company, set up here by the Japanese. After 1949 a Chinese government in a hurry to build heavy industry turned it into BX Steel, and from then on it was Benxi's main source of money. In 2007 the group produced 11.06 billion yuan in industrial value added; Benxi's GDP that year was 47.56 billion yuan, of which industrial value added by larger enterprises was 19.36 billion yuan.

The more telling pair of numbers: in 2007 the group's listed arm, Bengang Steel Plates, paid 2.08 billion yuan in tax, while Benxi's general budget revenue that year was 2.675 billion yuan. Leave tax rebates aside, and BX Steel was very nearly the only thing holding the city up.

Lu Ming joined BX Steel in 2009. He studied in Inner Mongolia, in a major tied to steelmaking, and at the start of his final year steel companies came to campus to recruit. His first choice was Anshan Iron and Steel Group; also in Liaoning, Ansteel beat BX Steel on both earnings and scale. Ansteel was hard to get into, so he took the next best thing.

BX Steel hired more than 40 people from his school in the end, and some 200 arrived from around the country. "It really felt like we'd been tricked into coming," Lu Ming said, then added, "Half a joke, half not."

That was BX Steel's last good stretch. In the first half of 2008 the financial crisis had not yet landed, and economies at home and abroad were expanding fast. Steel, a base industry, was rising with them. At the end of that year, to keep growth going, the state announced a 4-trillion-yuan investment plan. Steel took its share, capacity expanded further, and a false prosperity set in.

Chen Juan is 64. She worked for the General Construction Company under BX Steel. "Jianzong built the workshops, the boilers, the blast furnaces for BX Steel." As she remembers it, by 2009 satellite outfits like hers were already unsettled. BX Steel had stopped expanding: "There was no new work, and BX Steel wasn't hiring anymore."

It all came fast. First BX Steel ended its internal settlements. Jianzong had been taking on projects for the group's main steelmaking plants, which paid it a fee for the work; then, abruptly, the main plants said they would no longer pay. And with the main plants no longer expanding, there was nothing new to build.

"Early-retirement pay is gone, and the heating allowance hasn't been reimbursed for five years. Blanket internal retirement — meaning you just don't come to work, and they hand you a little money once a year." Chen Juan's voice rose. "A works of 2,000 people, and 8 left behind to do personnel and accounts." That was the end of an enormous construction company.

Saturated steel capacity soon reached the main plants too. Lu Ming's plant held on some years longer than Jianzong, but its earnings were clearly falling. In 2007 the 2.08 billion yuan Bengang Steel Plates paid in tax ranked third in Liaoning province; by 2013 that had dropped to 823 million yuan and 27th place. "Once steel prices fall, a ton of steel earns you less than a ton of cabbage," Chen Juan said.

From 2015 ordinary employees like Lu Ming finally felt it. "When there were profits, they didn't raise our pay. When there were losses, they cut it." As earnings kept sliding, the cuts reached everyone. "It used to be about 3,500 or 3,600 a month; now it's down to 2,500 or 2,600. Roughly a 1,000-yuan cut for a frontline worker, more for managers."

"BX Steel used to pay well," Chen Juan said. "If both people in a household worked there, we called it a double-steel family. High income, good benefits. Now the double-steel families are the ones in trouble."

The damage obviously does not stop with BX Steel employees. The company's own figures say 80,000 people work there, about 13% of Benxi's 604,000 urban workers. Add its suppliers upstream and down, and by Zhu Rui's estimate a quarter of the city lives off BX Steel. They take its wages, spend them locally, and keep the local economy turning. That is what a company accounting for a quarter of a city's GDP and nearly 80% of its fiscal revenue means to that city.

The pay cuts and layoffs spread through the city quickly. With earnings poor, BX Steel tightened its finances. Suppliers were told to cut prices, and payment terms were stretched far out. The pressure on their cash built until some of them ran dry.

For a small business owner like Tang Lin: "BX Steel used to pay four or five thousand a month. For a while it was barely over 2,000. When BX Steel goes down, every industry in Benxi goes down, because it's the thing that drives the whole economy here. Only now is it warming up a bit."

The wording varies, but every businessperson tells the same story. Zhang Xin: "Benxi is BX Steel, isn't it? If BX Steel isn't running its furnaces, that's the end of it. These two years it has run very little, so these two years the whole economy has been finished." Wang Li: "When the steel business here was better, we were all right. Now steel prices are down and business here is bad across the board."

From a distance, the plainest sign is the collapse of Benxi's public finances. In 2015, the year of the pay cuts, the city's budget revenue was 5.35 billion yuan, down close to 60% from 12.98 billion yuan in 2014. It has not recovered: 5.56 billion yuan in 2016 and 6.45 billion yuan in 2017. A person familiar with the situation told QDaily that taxes have been hard to collect: "The companies really are in bad shape. A lot of the figures on their books are negative."

For a city of 1.5 million urban and rural residents, that is not enough money to keep the place running. For retirees of Chen Juan's generation, the clearest sign is that medical reimbursements have shrunk. Benxi's health insurance now pays only 75% of what it is supposed to.

Chen Juan has a long list of complaints about local medicine. Her shoulder hurt for a stretch of time. A Benxi hospital diagnosed frozen shoulder and treated it, and the pain did not go away. Her son, who works in Shanghai, booked her into a hospital there, where the diagnosis was a rotator cuff tear — considerably more serious — and she had a small operation.

"Medicine in Benxi isn't good. The good doctors have all left," she said. She has also moved her health-insurance account to Shanghai; otherwise she "couldn't claim anything back at all."

Feeling squeezed is now general. Wang Li's son turns seven this year and starts primary school soon, and the cost of his education worries her. Many teachers in Benxi run tutoring on the side, and students have to attend. "Food, clothes, school and tutoring — one child costs five or six thousand a month. Tutoring is especially expensive, and there's nothing to be done about it. Everyone has to go."

Many people here are cutting back. A night at a KTV used to mean ordering several bottles and burning 1,000 yuan among friends; now you order nothing and 100 yuan covers it. Two movie tickets run fifty or sixty yuan, which can also be saved — a subscription on a streaming site will do.

"Go into a supermarket in Benxi and look. Everyone is browsing, nobody is buying. They only buy when things go on sale." Lu Ming's face was serious as he said it; he did not appear to be joking.

Chen Juan thinks it is only a matter of time before Benxi cannot pay pensions. Not even two years, she said flatly, and Benxi's pension fund will be done for. Every winter she flies to Shanghai to live with her son; in spring she comes back. Long retired, she still picks up work in Benxi.

Everyone is looking for a way out. Mr. Tang has been trading used cars in Benxi for more than 10 years. It began as a hobby, but lately he has watched more and more people pile into the trade. Used cars stand in long ranks along the roads, an impressive sight.

Three or four years ago Benxi relaxed its emissions rules for used cars. Public records show that Benxi's 2014 rules for registering used cars brought in from elsewhere still required China III emissions. By 2015, while most other Liaoning cities were raising the bar from China III to China IV, Benxi dropped the China III requirement altogether. Out-of-town used cars poured in, and a large market grew up overnight.

Mr. Tang calls himself the biggest used-car dealer in Benxi. He buys all over the country, as near as Beijing and as far as Shanghai, and turns over three or four cars a day. It is skilled work, he says: you have to read a car correctly and know what it is worth, and the inexperienced lose money easily. As for why there are so many dealers in Benxi, he reasons: "You make three or four thousand on one car. Isn't that a month's wages?"

Mr. Lü rides for Meituan. That afternoon his luck was out: for over half an hour not a single order came up on his phone, and he leaned against his motorbike with nothing to do. He put it down to the slow season — business is good only when it is hottest and when it is coldest. He has been riding for more than a year. He has his own job on a construction site, and goes out to deliver when his shift rotation leaves him free. As he puts it: "It's all wage work anyway. This is one more wage."

Earning a bit more is what many people in Benxi want. Because there is so little of it here, they look outward.

Qi Feng is a nurse at a hospital in Benxi. A classmate from nursing school worked as a nurse for a while, then went to Beijing to answer medical questions on the back end of a health-services platform. Qi Feng remembers that she was making five or six thousand yuan as soon as she arrived; now it is over 20,000, and she owns an apartment in Beijing and one in Benxi.

Lu Fang is Qi Feng's colleague. Her husband, who has gone to Chongqing for work, told her about a young man he met at a hostel who sells balloons at a tourist site there. "He sells more than 200 a day and makes 20 yuan on each one. Work out what that comes to."

"Twenty yuan a balloon," she repeated, envious and longing. "Really, the chances down there are big. Whatever you do, you make money."

Lu Fang is thinking about leaving. She wants to follow once her husband has a foothold in Chongqing — "It's lovely, it really suits living, there's no great pressure." Failing that, Guangzhou would do. "Benxi isn't good for children either. Parents don't care about all-round development, about a child's life or how they get on with people. To put it harshly, the kids come out like fools: they can study and nothing else. I don't want that for my child, and that's why I'm so set on going, on getting out of this place."

That may speak for many of the people who leave Benxi, but it is certainly not the only reason.

For young people like Liu Yuan, leaving has become a reflex. Wherever you go for university, you are likely to stay. "Basically, in your head, you're not coming back."

The older generation, Zhu Rui among them, think about renting a place in Sanya for their retirement. By his arithmetic, the couple's combined pensions of six or seven thousand yuan would cover life in Sanya. In Benxi there is heating to pay for in winter and other extras on top; all told, Sanya would not necessarily cost more.

From 2012, the Benxi Statistical Bulletin on National Economic and Social Development began publishing migration figures. That year 5,804 people moved in and 7,952 moved out. The losses grew year by year: by 2017, 4,113 moved in and 10,635 moved out, a net loss of 6,522. Registered-population numbers swing with births and deaths; migration shows Benxi's predicament more clearly.

Should you go on living in Benxi? Those who have stayed ask themselves that from time to time.

"Right now we want a child, and my husband and I together make six or seven thousand yuan. It already feels tight. If the pay is cut again, down to a thousand-something, there's no point," Qi Feng said. "If Benxi's economy gets any worse and the hospital does badly too, we may still have to leave."

To hold off further decline, the city government is trying to build new industries: tourism and pharmaceuticals. But by the official macro figures, neither can yet fill the hole left by steel.

Benxi had its moment. In 1992 the State Council designated it a "larger city," a title that carried limited local legislative power; the center hoped such cities would use local lawmaking to test economic reform. Eighteen cities held it, among them Tangshan, Dalian, Anshan, Qingdao, Wuxi and Suzhou.

Their fates diverged. Chongqing, raised to a directly administered municipality, grew impressively. Wuxi and Suzhou, on the Yangtze, drew township enterprises and foreign-invested plants that became new pillars. Benxi ran into trouble of its own.

The State Council has never formally listed Benxi as a resource-exhausted city, but it fits the description: excessive dependence on coal and steel, a single-industry structure with no replacement yet in sight; coal and iron reserves running down and returns falling with them; too little economic output and a weak local treasury. The people the state assigned to this heavy-industry base before reform and opening-up have grown old, and the young will not stay. Having lost BX Steel, the pillar it stood on, Benxi has entered old age itself.

Benxi is only one example. Fuxin, Liaoning, 240 kilometers away, hit crisis at the start of this century when its coal ran out; 129,000 workers were laid off, close to 30% of the workforce. Farther south, Panjin, Liaoning, which once boomed on the Liaohe oil field, spent 12 straight years last among Liaoning's 14 cities in GDP growth.

So far the State Council has recognized 69 resource-exhausted cities — which plainly does not cover every city in this kind of trouble.

(At the interviewees' request, all names in this article are pseudonyms.)

Cover image from: Public Domain Pictures; wikicommons; Good Free Photos; Unsplash

Unless otherwise noted, photos in this article were taken by the reporter in Benxi.