Western pro­gram new engine for growth

Pref­er­en­tial poli­cies in the pipe­line to boost in­fra­struc­ture con­struc­tion

China Daily (Hong Kong) - - FRONT PAGE - By DING QINGFEN and XUE CHAO­HUA in Lanzhou and CHEN JIA in Bei­jing

China is bet­ting on its western de­vel­op­ment pro­gram to lead a new round of eco­nomic growth as the govern­ment is mulling “dif­fer­en­ti­ated” poli­cies for the re­gion that will fea­ture huge spend­ing on in­fra­struc­ture, Pre­mier Li Ke­qiang said on Mon­day.

“We will roll out more pref­er­en­tial poli­cies tai­lored for the western re­gion con­cern­ing in­fra­struc­ture projects, to ac­cel­er­ate the con­struc­tion and up­grad­ing of rail and road net­works,” he said.

He made the re­mark dur­ing a meet­ing with heads of the western prov­inces in Lanzhou, cap­i­tal of Gansu prov­ince.

His com­ments co­in­cide with a pol­icy an­nounced by the State Coun­cil on Mon­day to pri­or­i­tize rail­way con­struc­tion in the coun­try’s cen­tral and western ar­eas as well as eco­nom­i­cally un­der­de­vel­oped re­gions.

Li was on a three-day in­spec­tion tour in Gansu, which started on Satur­day.

China will try to main­tain sus­tain­able eco­nomic growth and im­prove peo­ple’s liveli­hoods in the next decade, and the cen­tral and western ar­eas pro­vide ad­e­quate room for fur­ther growth, Li said, adding that healthy eco­nomic de­vel­op­ment in the western re­gion holds the key to the coun­try’s over­all eco­nomic health.

“Dif­fer­en­ti­ated poli­cies” should be drafted for the western re­gion, he said.

China’s eco­nomic ex­pan­sion has de­cel­er­ated in re­cent years, with GDP ris­ing 7.5 per­cent in the sec­ond quar­ter, down from 7.7 per­cent in the first.

De­spite the eco­nomic slow­down, China has pledged to keep growth within a “rea­son­able range” with­out a stim­u­lus.

The govern­ment has also vowed to push for­ward with re­forms, as the na­tion faces prob­lems in­clud­ing un­bal­anced growth in eastern and western ar­eas, a wealth gap be­tween ru­ral and ur­ban ar­eas, in­dus­trial over­ca­pac­ity and pol­lu­tion.

Li said the cen­tral govern­ment is con­sid­er­ing mea­sures to bring growth po­ten­tial in the west into full play.

Li cited mea­sures to guide the trans­fer of la­bor-in­ten­sive and en­vi­ron­men­tally friendly in­dus­tries from the coastal re­gion to the west, as well as sup­port­ive poli­cies to de­velop new en­er­gies that in­clude wind, so­lar and hy­dro power.

Due to ris­ing la­bor costs and a sat­u­rated mar­ket, the coastal ar­eas are los­ing growth mo­men­tum. And ex­perts be­lieve the western re­gion, which boasts a huge mar­ket and big pool of la­bor, is bound to be­come the coun­try’s new growth engine.

Wang Jun, a se­nior econ­o­mist at China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes, a top govern­ment think tank, said western de­vel­op­ment is key to China’s eco­nomic re­struc­tur­ing and the trans­for­ma­tion of its growth pat­tern.

The re­gion’s eco­nomic per­for­mance would help the coun­try achieve this year’s growth tar­get of 7.5 per­cent, he added.

Some western cities have grown faster than their rich coun­ter­parts in the east.

In the first half of this year, three western cities — Guiyang in Guizhou prov­ince, Xin­ing in Qing­hai prov­ince and Kun­ming in Yun­nan prov­ince — topped the national list in terms of yearon-year growth.

The na­tion launched its western de­vel­op­ment pro­gram in 2000 to help the west catch up with the east in eco­nomic growth. The pro­gram cov­ers more than half of the coun­try’s land and al­most one-third of its pop­u­la­tion. Many western prov­inces and re­gions have ben­e­fited from the pro­gram in the past decade.

Gansu’s econ­omy has ex­panded an aver­age 11.2 per­cent dur­ing the past 13 years, with fixed-as­set in­vest­ment gain­ing 24.3 per­cent each year.

But the western prov­inces hope the cen­tral govern­ment will is­sue more pref­er­en­tial poli­cies and spend more to im­prove in­fra­struc­ture there.

Wei Hong, gover­nor of Sichuan prov­ince, said the cen­tral govern­ment should pri­or­i­tize in­vest­ment ex­pan­sion in the west by ex­tend­ing spe­cific sup­port to key projects.

Wang Jun said the pre­mier has sent a clear sig­nal to boost western de­vel­op­ment, and “more spe­cific mea­sures are ex­pected in the com­ing months” that will cover rail­way con­struc­tion, ur­ban ren­o­va­tion and im­prove­ment in the med­i­cal sys­tem.

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