Moderate Growth in West

As Rome was not built in a day, so goes China's ambitious western development initiative.

Economic growth figures of western areas during the first half of 2000 indicated that the "go west" strategy will take more time to produce a marked effect, although a fundamental basis for growth is being shaped.

Government statistics revealed that 10 western provinces and autonomous regions and Chongqing Municipality experienced rapid economic growth at or above the national average - 8.2 per cent. Only two were behind the mean - Yunnan's gross domestic product (GDP) grew at only 6.5 per cent, and Xinjiang's at 7.8 per cent.

But such achievements are inferior if compared with East China's economic performance, which is endowed with larger economies of scales. For the first six months this year, most of China's coastal areas were on a fast track. Growth in Shanghai was reported to be 10.3 per cent; with Tianjin at 10.8 per cent; Jiangsu, 10.3 per cent; and Shandong, 10.3 per cent.

Though still lagging behind the eastern powerhouses, the growth rates of western regions are truly more rapid than in previous years. Moreover, western provinces even surpassed some regions in Central China and some old industrial bases such as Liaoning, which witnessed a GDP growth rate of 4.5 per cent in the January-June period.

Increased investment is believed a major contributing factor to economic growth in western regions.

During the first four months, 53.3 billion yuan (US$6.42 billion) was invested in the west, 10.9 per cent more on a year-on-year basis, or 1.6 percentage points higher than the country's average, according to National Bureau of Statistics data.

In Shaanxi, fixed assets investment amounted to more than 140 billion yuan (US$16.87 billion) during the past one and a half years, exceeding the total of the 1991-95 period.

Qinghai's fixed assets investment soared by 26 per cent last year and 27 per cent during the first half of this year. Consequently, the high plateau province saw its year-on-year GDP growth for the first six months of the year hit a record of 8.3 per cent.

The State is launching 10 mammoth projects valued in the billions of yuan in the west this year, including the Xi'an-Nanjing railway, the Sebei-Xining-Lanzhou gas pipeline, and a giant potash fertilizer plant in Qinghai.

Construction of the Sebei-Xi'ning-Lanzhou pipeline began on April 1 and has brought about considerable economic benefits for local people. A People's Daily report said local residents have launched at least 80 service facilities to cater to the construction workers.

They reportedly earned more than 600,000 yuan (US$72,289) from leasing housing space to construction workers. More than 2,300 local farmers and herdmen are also participating in building the pipeline.

Experts believed that economic growth in the west also comes partly from progress in the reform of State firms.

In Guizhou, State capital has been gradually withdrawn from competitive business sectors such as textiles, medicine and machinery. In Ningxia, there will be no more State firms in sugar-making and textile sectors.

But it is obvious that loss-making State enterprises and a too-large ratio of State assets in local industries are still slowing the west's rate of growth.

For example, Gansu's State assets accounts for 70 per cent of its economy, compared with only 11 per cent in eastern China's Zhejiang.

Yunnan is another typical case. Its former booming State tobacco producers are bound by administrative restrictions and a sluggish market. This has led to relatively low economic growth.

Source said this indicates the west needs to encourage individual forces to take part in investment activities to cultivate a healthy non-governmental economy.

Zhao Changwen, an economist with the Sichuan University, said the central government should pay attention to creating a fair and sound climate to enrich the people in the west.

An increasing number of small-sized high-technology firms, labour-intensive enterprises, and education and training programmes will provide job opportunities for local people and eventually promote overall economic growth, Zhao said.



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