Of Reinventing

Jiayuguan diversifies its economy to increase its resilience By Wang Hairong

To the sound of a whistle, a row of peacocks march onto a narrow bridge behind a woman carrying a basket of food for them. As she walks, the woman sprinkles a bit of food from time to time while the peacocks peck and trail behind her, cackling loudly. The woman happens to be a staff member at the China Peacock Court, a large peacock farm in Jiayuguan, a city in northwest China’s Gansu Province.

Suddenly, the woman issues an order, and the peacocks take off one by one, flapping their wings strenuously to fly across the lake and land on the rails on the bank. “It is rare to see peacocks fly, but we have managed to train them to perform for visitors,” Yang Hui, General Manager of the peacock farm, told Beijing Review.

Launched in 2012, the farm is now home to approximately 30,000 peacocks and peahens—most of which are blue, with a small number green and white—and embodies Jiayuguan’s effort to adjust its economic structure and enrich its tourism resources. Occupying an area of 60 hectares, the farm is the largest breeding and feeding ground for blue peacocks in Asia, Yang said.

An iron and steel city

Although named after the Jiayuguan Pass, the westernmost end of the Great Wall built in the Ming Dynasty (1368-1644), Jiayuguan City really credits its birth to the Jiuquan Iron and Steel Group, also known as Jiugang.

In 1955, geologists discovered a large iron ore deposit in the vicinity of the Jiayuguan Pass, leading to the founding of Jiugang three years later. As more and more people from other parts of the country flocked to work for the plant, the area was officially established as a city in 1965.

In the ensuing decades, Jiugang grew into the largest iron and steel production base in northwest China. “If Jiugang sneezes, the city will catch cold,” Li Ning, an official with the city’s Development and Reform Commission, once told the media.

Jiayuguan was characterized by a small primary industry, a large secondary industry and a weak tertiary industry. Located in the heart of the Gobi Desert, the city’s agriculture is negligible. The manufacturing of iron and steel once contributed to 80 percent of the city’s GDP, Li said.

But the iron and steel city faces two grave development bottlenecks. In recent years, China has suffered from an overcapacity of iron and steel production. As a result, in December 2015, the Central Economic Work Conference decided to promote supply-side structure reform and make cutting overcapacity, especially in steel and coal industries, a top priority.

In response to the Central Government’s decision, Jiugang has cut its iron and steel production capacity by approximately 5 million tons since 2015, said Yang Hongwei, a former employee of Jiugang and currently an executive at Zixuan Wine, an outgrowth of Jiugang. Yang said that Jiugang shut down two plants, one in north China’s Shanxi Province and the other in Lanzhou, the capital of Gansu.

In addition to a glut in production, Jiugang faces a more fatal threat, Yang said. It has been estimated that the iron ore deposits that Jiugang lives on will be depleted in three decades, which compels the company and the city to explore alternative income resources, he added.

In recent years, Jiayuguan’s Municipal Government has decided to adjust the city’s economic structure by fostering emerging industries such as photovoltaic power generation and new construction material production as well as food industries such as wine making, diary production and animal husbandry. It also vigorously encourages the development of the tertiary industry. Promoting the integrated development of cultural and tourism sectors has been the city’s most important measure to boost its tertiary industry.

The measure has yielded results as data from the municipal government shows that the proportion of the primary, second-