Influence of Yangtze River Delta economic circle expands

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Last updated at: (Beijing Time) Wednesday, October 22, 2003

Influence of Yangtze River Delta economic circle expands

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Economists have set a three-hour drive from Shanghai as the range of the Yangtze River Delta economic radius, but the effects of the rapid economic development of the circle is extending far beyond that.

The former 15-city club is considering taking Taizhou City in Zhejiang Province into its orbit. Yancheng, Huai'an and Ma'anshan cities in Jiangsu and Anhui provinces also look likely candidates for membership.

Kaihua County of Zhejiang Province has a population of 320,000.Although it is over six hours of drive from Shanghai, the county has written the target of "integrating with the Yangtze River Delta economy" into its development blueprint.

Boasting superb air quality all year long and rich experience in producing green food, tea and aquatic products, Kaihua's plan is to become the production base of green food for the Yangtze River Delta.

Now the delta has been widely acknowledged as the world's sixthlargest metropolitan area. Total gross domestic product has reached the level of a standard international economic center.

The delta, embracing the municipality of Shanghai and 14 citiesin Zhejiang and Jiangsu provinces, contributes to 22.1 percent of the country's gross domestic product and 28.5 percent of total foreign trade, although it has only 2.2 percent of the country's land area and 10.4 percent of population.

The delta used to have close economic relations with surrounding areas which provided cheap labor and resources while the delta gave back finished products. Now the model is changing as these former labor and sources providers rush to join the production chain.

In Kaihua, more than 70,000 residents are working in big citieslike Shanghai and Hangzhou. In Anhui Province, more than 2.1 million people work in the two big cities.

"As one third of income for farmers comes from working away from home, this kind of relationship is important to the economically-backward surrounding areas. But the problem is that the consumption of these laborers also happens in the big cities, which contributes less to local economies," said Yu Leng, professor at Shanghai Jiaotong University.

To change the situation, surrounding areas have begun setting up their own industries with projects and technologies coming fromthe delta. So far this year, private companies based in the delta have invested 20 billion yuan in Anhui Province.

The best example is auto producer SAIC Chery. Three years ago, the Anhui Chery Corporation signed an agreement with the Shanghai Automobile Industrial Corporation (SAIC) to jointly produce economy cars. Now SAIC Chery is listed as one of China's eight biggest car producers.

"In the past, the comparatively developed delta cities had always provided 'blood transfusions' to the surrounding areas. Nowthey are working to help these areas improve their own blood-generating capacity," said Dr. Wang Lingyi, of Shanghai Institute of Social Sciences.

Shangrao City, of Jiangxi Province, has an ambitious plan up to2005 under which it will send 10 percent of its agricultural produce and 30 percent of its unemployed laborers to the delta cities. It also hopes 30 percent of funds and 60 percent of tourists will come from the delta.

"In the process of interaction, a bigger delta economic circle will emerge and become the major engine for the development of China's economy, even for the world economy," said Stephen Green, head of the Asia Programme of the Britain's Royal Institute of International Affairs.

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