Growth of western China
THE PROVINCIAL AREAS IN WESTERN CHINA have outperformed their eastern counterparts in terms of economic growth in recent years, but they must solve the same problems that have beset eastern areas if they are to become real growth engines for the world’s second-largest economy.
During his trip to Gansu province on Monday, Premier Li Keqiang reaffirmed the western part of the country will serve as crucial leverage for the growth of the national economy and creating jobs.
Indeed, the economically backward western areas have great potential for growth, and their latecomer advantage means they can learn from the successful experiences of the eastern areas. This, together with preferential policies from the State, means development of the western region will accelerate rapidly.
The region as a whole has registered fast annual growth rates in recent years. Its urbanization rate has also been at a faster clip than that of eastern areas. As investment has become saturated and production costs have risen in some places on the east coast, the western areas have received the transfer of production capabilities from the eastern provinces, thus unleashing new growth potential for the national economy.
Recent moves to boost the national economy have included increased investment in infrastructure and facilities in the west. The government’s investment in railway construction, for example, will be tilted toward the western areas so that more convenient transportation can benefit the process of production transfer and development.
But while the western economy has the potential for fast growth, this brings with it the risk that the region will end up suffering from the same problems that plague the eastern region. For example, the National Development and Reform Commission said that Yunnan province and the Xinjiang Uygur autonomous region are now in a “very harsh” situation when it comes to energy-saving and pollution reduction, while Guizhou, Qinghai and Ningxia face a “harsh” situation.
In catching up with the prosperous eastern coast, the western areas should avoid repeating their growth pattern, which was heavily dependent on injection of capital and other resources and has proven detrimental to the environment. The long-term health and sustainability of the economy should not be sacrificed for short-term gains in economic output.