Upgrading Western Development
China unveils new guideline on western development to enhance opening up, innovation in the region
Chinese policymakers on May 17 issued a guideline on advancing the new pattern of western development in the new era, which calls for winning the “three tough battles” against major risks, poverty and environmental pollution, improving innovation capability and building a modern industrial system in the country’s western region.
The development of the western region remains unbalanced and inadequate and lags far behind the eastern region, making it arduous to further reduce poverty. The western region is still a weak link in completing the building of a moderately prosperous society in all respects and achieving socialist modernization, the guideline says.
The guideline requires a notable improvement in ecological, business and innovation environment as well as opening up of the western region by 2020 and the completion of the building of a moderately prosperous society in all respects together with the rest of the country.
By 2035, the western region will basically achieve socialist modernization, with its public service quality, infrastructure connectivity and people’s living standards roughly the same as those in the eastern region, so that various regions can better complement and integrate with each other in terms of development, and ethnic minority and border areas become prosperous, safe and stable where man and nature can coexist in harmony.
Higher development quality
The State Council has approved four plans on the western development since January 2000. Compared with the previous documents, the latest one highlights the importance of improving the quality of development, Fu Yifu, a researcher with the Suning Institute of Finance, told Jiemian.com.
“Previous plans mainly focused on how to develop the region and improve the infrastructure. After years of development, the country is now initiating high-quality development and further improving the business environment, which is included in this guideline,” Fu said .
That is to say, the western development now focuses on improvement in economic structure and growth quality, indicating a shift of orientation of the decision makers toward the development of the region, Fu said.
“The guideline signals the country’s intent to expand the space for national development in the face of the novel coronavirus outbreak and strengthen the weak links,” Wang Jun, chief economist of Zhongyuan Bank, was quoted as saying by Shanghai Securities News.
The guideline connects the western development strategy with the Guangdong
Hong Kong-macao Greater Bay Area initiative and the program on the Beijing-tianjin-hebei coordinated development. Through strengthening infrastructure construction, developing a modern manufacturing industry and strategic emerging industries and enhancing financial support to the real economy, it will promote high-quality development in the western region so as to fill the gaps and achieve balanced regional development. The guideline also aims at enhancing the core competitiveness of the western region based on its unique advantages, Yin Yue, chief market analyst with the Yuekai Securities Institute, told Jiemian.com.
Rule-based opening up
The guideline states that under the framework of the Belt and Road Initiative, the western
region should intensify the opening up through measures such as setting up multi-level inland opening-up platforms, accelerating open development of border areas and developing a highly open economy.
Regarding participation in the Belt and Road Initiative, the guideline proposes turning Xinjiang Uygur Autonomous Region into a core area of the Silk Road Economic Belt, and supporting Chongqing Municipality and Sichuan Province in southwest China and Shaanxi Province in northwest China to become open development hubs. It also calls for improving the construction of Beibuwan Port in Guangxi Zhuang Autonomous Region in south China, setting up a cluster of ports with international competitiveness, and accelerating the development of a modern marine industry.
“China’s opening up is expanding from coastal areas to inland and border areas. Boosted by a new round of western development policies, the western region is changing from being a latecomer to a frontline of opening up,” Cui Fan, a professor with the School of International Trade and Economics at the University of International Business and Economics, told Shanghai Securities News.
Fu said previously the key point of opening up was the flow of goods and essential factors of production, but now, with the economy entering a higher stage of development, legislation and supervision need to be consistent with international trade and investment rules, to improve trade and investment facilitation.
“The country may encourage some cities in the western region to build ‘test fields’ with an institutional system that can be later replicated in other regions,” he said.
Data from the Ministry of Commerce shows that the western region has played a leading role in the country in attracting foreign investment. In 2018, China saw a growth of 0.9 percent in actually utilized investment, while the growth in the western region reached 18.5 percent. In the first 11 months of 2019, the capital inflow in the entire country grew by 6 percent, while that in the western region rose by 7.3 percent.
Enhancing connectivity
Since infrastructure is a driving force for regional economic development, the western region needs to improve its infrastructure to ensure stable growth and promote regional connectivity.
The guideline calls for reinforcing the planning and construction of infrastructure. According to it, construction of major projects such as the Sichuan-tibet Railway, ShanghaiChengdu High-speed Railway, ChongqingKunming High-speed Railway and XiningChengdu Railway should be accelerated, while the development of high-speed railways and regular railways should be coordinated.
The guideline also requires strengthening construction of comprehensive passenger transport hubs and freight hubs, improving the layout of national logistics hubs and raising the efficiency of logistics. Construction of airports and aviation hubs is to be enhanced, and general aviation is to be better developed.
In addition, the information network coverage in rural and remote areas will be increased, and a number of large-scale irrigation projects will be planned.
Fu said the infrastructure in the western region has been remarkably improved in recent years, but still lags behind that in the eastern region. Besides railways, highways and airports, the guideline also says the development of logistics and telecommunications will be accelerated, which will facilitate connectivity between the eastern, central and western regions and boost economic growth in the western region.
Yin believes investment in infrastructure will propel economic growth in two ways: It will increase local investment, and facilitate transformation of the local economic growth model.
“Through enhancing the construction of east-west and north-south transportation corridors, different economic regions will be more closely connected. It will be conducive to interactions between industries and facilitate economic and cultural exchanges, to transform the economic growth model,” he said.