Growth of western China

China Daily (Hong Kong) - - COMMENT -

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.

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