The Hindu : China's great leap westward

Online edition of India's National Newspaper
Saturday, Jun 07, 2003

Opinion

Opinion - Leader Page Articles

China's great leap westward

By Raviprasad Narayanan

In comparison with the eastern region, the western provinces are resource-rich, with abundant supply of labour, low investment costs and the potential of becoming a large market.

SINCE THE former Chinese President, Jiang Zemin, first proposed the idea in early 1999, the "western development strategy" has emerged in the policy discussions and economic decision-making of China as being at the "core" of the next generation of economic reforms that were begun in 1978. The importance of the strategy can be gauged from its recurrent theme being detailed in every annual Government work report since 1999. And also from the fact that it was the focus of policy deliberations at the national economic conference in 2000 and at the State Council's special conference on the development of the vast western region in January 2000.

China's western region encompasses the six provinces of Shaanxi, Gansu, Qinghai, Sichuan, Yunnan and Guizhou, the three autonomous regions of Ningxia, Xinjiang and Tibet, and the Chongqing Municipality which is directly under the administration of its Central Government. The region is spread over 5.4 million square km and takes up about 56 per cent of the country's total land area and is home to around a quarter of China's population. In comparison with the eastern region, the western provinces are resource-rich, with abundant supply of labour, low investment costs and the potential of becoming a large market. This potential market remains underdeveloped as the ongoing reform process has led to the rapid development of the eastern and southern provinces, thereby creating a regional imbalance, which the authorities in Beijing are determined to set right.

During the 17 years between 1979 and 1995, the average economic growth of China reached 9.8 per cent, which, when broken down region-wise, revealed the growth rate in the eastern provinces at 12.8 per cent, while that in the west was only 8.7 per cent, falling a percentage short of the national average. Also, while the eastern provinces have contributed around 65 per cent of the national Gross Domestic Product (GDP) in recent years, the western region has contributed only around 15 per cent. It has also been estimated that the per-capita GDP of the western region equals only 60 per cent of the national average. That the western region should develop after the success of the reforms and their implementation in the eastern coastal provinces was explained by the former Chinese Premier, Zhu Rongji, who quoted Deng Xiaoping as having advanced the strategic thinking of "two major concerns" in China's modernisation drive. One concern was to "expedite the opening of the eastern coastal areas" in the beginning, and when China were to "develop to a certain stage" where a moderate level of prosperity is ensured, more "efforts should be pooled to quicken the development of the central and western regions.'' Mr. Zemin had also stated that "large-scale development of the western region is a major strategy for China's overall development. Now the conditions are basically available and the time is ripe.''

Substantiating the debate is the growing realisation that the methods used in the development of the east certainly will not work in the west. This is because the eastern and western regions not only differ greatly in natural resources, historical backgrounds and other factors, but also in the starting point of economic development that largely depends on the existing domestic and international environment.

The State Development Planning Commission (SDPC) of China is of the view that the western region should take the strengthening of ecological construction and environment protection as a basic starting point for its large-scale development, bearing in mind the ecologically fragile environment and the need for sustainable development. Over the past three years since the introduction of the western development strategy, the Central Government in Beijing has given a powerful push to the region's development by increasing investment, stepping up transfer payments and introducing preferential fiscal and taxation policies.

Work on new key projects, among others, includes the Qinghai-Tibet railway, the diversion of natural gas and electricity from the western to the eastern regions, water control projects and trunk highways. The ambitious Three Gorges Dam and the Ertan Hydroelectric Station, currently China's largest hydropower generating unit, are large-scale infrastructure projects that are expected to provide a fillip to further economic development in the region. The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) is also formulating an industrial catalogue for foreign investment in the western region and planning the construction of state-level development zones too. The State Administration of Taxation will also provide foreign-funded enterprises with more favourable tax benefits in order to encourage investment in the western region.

In his last work report delivered at the first session of the 10th National People's Congress (NPC) on March 5, 2003, Mr. Rongji, while highlighting the development of the western region, emphasised the need for "economic activities with local characteristics," and to "accelerate the development of science, technology and education in the western region.'' Dong Funai, an economist, noted that the development of the western region is extremely important given the widening gaps between the eastern and western regions and added that "if China wants to realise modernisation, the Government has to speed up the development of the western region to narrow the chasm between the western and eastern regions.''

With a broad consensus on the need and approach required to implement the strategy of developing China's western region, the Central Committee of the Communist Party of China (CPC) elaborated on "six persistences'' that need to be adhered to on the development of the western region. These include persisting on pushing forward the "great western development'' according to plans and in phases; giving full play to the region's advantages and adjusting the economic structure; achieving long-term development goals; promoting the development of different regions and coordinating the acceleration of development in central and western regions with further development of eastern coastal areas; policy measures that launch the "great western development'' into the 10th Five Year Plan, and lastly, giving full play to the advantages arising from the support of all quarters. With China's economic reforms increasingly transforming its western region that lies adjacent to the geographical proximity of India, there arises an opportunity to increase Sino-Indian bilateral cooperation, with the Prime Minister, Atal Behari Vajpayee's coming visit to Beijing. While

China's western development strategy involves the maximum development of its domestic resources, creation of infrastructure and the establishment of reliable commercial links with neighbouring countries of Southeast Asia, the need for India is to reorient its approach by presenting a shared economic perspective that would primarily benefit northeast India, which borders southwest China. A powerful imperative calling for an enhanced level of economic engagement with China is the rapidly expanding bilateral trade which is estimated to be worth around $ 5 billion. The logic dictated by trade could be further stretched to include investments in the respective regions that stand to benefit from a further improvement in Sino-Indian ties. The likely emergence of an economic arc of cooperation in this region was earlier proposed by the Kunming Initiative, itself a product of track two diplomacy, following India's nuclear tests in 1998.

For sceptics, there is also the possibility that the "great western development" could be one of "those great political surges that come and go in a flash.'' From China's perspective, if the campaign were to fall short of the expectations generated, it would be a lost opportunity to rejuvenate a region that has clearly not benefited from the ongoing economic reforms.

(The writer is a doctoral scholar, Centre for East Asian Studies, JNU.)

Printer friendly page
Send this article to Friends by E-Mail

Opinion

Stories in this Section

Handshake in the desert

Off with dowry

An unsustainable model

China's great leap westward