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What puts China's mid-west on fast track?
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08:10, August 12, 2009

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China releases July economic data

With the world's economy declining under the financial crisis, China's economy achieved 7.1 percent growth during the first half, becoming a bright spot in the global economy. In China, GDP growth rate of the central and western regions was significantly higher than the national level and that of the eastern region.

In the first half of 2009, central provinces Anhui, Hunan, and Hubei saw growth of more than 10 percent. Among the six provinces with GDP growth rate higher than 12%, are one autonomous region and four provinces that are in the central and western region, namely Inner Mongolia, Sichuan, Guangxi, and Chongqing. It's worth noting that Inner Mongolia with 16.2 percent growth rate became the fastest growing region in the country.

Why so fast?

The rapid economic growth in the central and western regions is due to the central government‘s support and promotion of the coordinated development of the region. At the same time, development of this region greatly expands space for China's economic development.

Due to geographical, historical and other reasons, there is still a wide gap in the level of economic and social development between China's eastern coastal and central and western regions. This imbalance in regional economic development leads to large-scale transfer of population and resources, as well as inefficient use of labor and resources. Today, however, with the region's rapid economic development, we see the hope of reversing this situation.

At present, the most part of the central and western regions are in the early and medium stages of industrialization. Its economy is domestic market oriented, thus suffered relatively smaller impact of international financial crisis. This round of investment in infrastructure construction greatly promotes this region's economy. In addition, many parts of the region have become an important force in the transformation of manufacturing industry of the eastern provinces and provide a new impetus for the development of the central and western regions.

In the central region, people vigorously start new business, and this is becoming an important driving force for economic growth. Take Anhui Province for example, in the first half of 2009, the number of industrial enterprises with sales over five million yuan in Anhui Province has reached 11,795, an increase of 2525 and 1282 over the same period last year and the beginning of this year respectively. Anhui's economic development is a microcosm of the six provinces in the central regions during the first half of 2009.

Director of the Institute of Regional and Urban Economics at Renmin University, Chen Xiushan believes that the reasons for such rapid growth are: first, China's support for the central and western regions is beginning to show results; Secondly, the central and western regions are still in the early and medium stage of industrialization, development of key industries such as the heavy chemical industry and equipment manufacturing, and also infrastructure construction, has brought a strong driving force for industrial development of the central and western regions . At the same time, central government's favorable agricultural policy helps the rapid development of agriculture there. Of course, such success is due to the regions making good use of its own characteristics and advantages while seizing development opportunities in the crisis. Briefly, it is the industrialization that speeds up growth in the region.

Also benefit the eastern region?

Chen Xiushan thinks the rapid development of the central and western regions not only promotes balanced regional economic development, which is exactly what we hope to achieve, but also enhances China's confidence to deal with the current international financial crisis.

In the long run, such a balanced regional economic development will bring about very active results. First, this will reduce the long-distance movement of China's energy, resources, and make better use of them. Second, this will gradually reduce the large-scale flows of population, and avoid a series of social problems brought about by it. Third, the rapid development of the central and western regions causes a higher demand of the eastern region, forcing the eastern region to accelerate the pace of transformation and upgrading, thus helping promote China's overall economic transformation and upgrading.

Will the growth be sustainable?

Chen Xiushan also points out that "we need to pay close attention to two aspects: first, is the rapid development of the central and western regions sustainable? The second is will the development of the central and western regions still rely mainly on the input of energy, resources and other elements? Is it going to be a green economy and circular economy? "

In this regard, Hou Yongzhi, researcher at Department of Development Strategy & Regional Economy, Development Research Center of the State Council expressed similar views. Hou said "the growth of the central and western regions can not be extensive industrial growth, or simply copy and accept out of date products, but to take projects with technical values and those which can enhance the local industry upgrading. In the first half of 2009, the central region promotes independent innovation and industrial upgrading, vigorously readjust the industrial structure, and develop high value-added industry. This ensures the continued growth of this region."

By People's Daily Online



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