No shortcuts to development

Governments in western region should improve people's livelihoods without threatening overall ecological safety

The Western Development Strategy adopted in 2000 has accelerated economic growth in the western region. Over the past decade, the GDP of the western region has increased from 1.6 trillion yuan ($263.5 billion) to 11.4 trillion yuan; its proportion in China's overall GDP had increased from 16.8 percent to 19.8 percent. The implementation of the Western Development Strategy has narrowed the development gap among different regions in China, and strengthened the coordination of regional development. The Western region's industrialization level has increased, and its economic endogenous growth capacity has been strengthened. The urbanization process has been accelerated, and it has risen from 29 percent in 2000 to 43 percent in 2011. Infrastructure construction and public service supply capacity have also increased significantly.

But in the process, many contradictions and problems have also been exposed. For example, development in the western region mainly focuses on extensive economic growth, the industrial structure level is rather low, the development between urban and rural areas is unbalanced, the driving forces for future development, such as infrastructure construction and a financial support mechanism are insufficient, and the fragile ecological environment may restrict development.

People in the western region are eager to address these issues. But some areas' development planning is a rush for quick results and some areas' strategy excessively relies on the exploitation of resources. Such inclinations not only undermine essential development in the region, they also threaten China's overall ecological safety. Therefore, development in the western region needs to be scientifically promoted.

Any depressed and backward area can hardly rise in a short time. The western region has a huge population and large areas, with various ethnic and cultural groups. The development situation is more complicated here than in other regions, which means development of the region is a long-term cause and has five key requirements.

First, we should establish sound views on future development. Some local authorities partially view development of the area as the exploiting of natural resources, especially mineral resources. However, the goal of the Western Development Strategy is to continuously increase living standards and the quality of life of residents, and gradually reduce the development gap between the western region and other regions.

Second, we should take the new-style road of industrialization. The western region's ecology is fragile. If the western provinces follow the eastern region's industrial development path, it will cause huge ecological and environmental problems. The western region's new-style road of industrialization should balance the relationships between high and new technology industries and traditional industries as well as capital and technology intensive industries and labor intensive industries. We should increase investment in research and development and achieve economic growth by improving the quality of labor and management. We should build advantageous industrial chains and produce competitive and high added-value products.

Third, construction of central cities in the western region should be strengthened to enhance their radiation effect, so they can be the driving force for economic growth. With the goal of high efficiency and sustainability, we should highly develop a modern "Silk Road" economic district and city belt that centers on big cities in the northwest, such as Urumqi, Lanzhou, Yinchuan, Xi'an and Xining, as well as the upper Yangtze River economic belt that centers on southwestern cities such as Chongqing, Chengdu, Guiyang and Kunming.

Fourth, we should complete and promote the western region's market environment. In the past, the Western Development Strategy had two main characteristics: local governments dominated project selection and industrial investment, and large-scale State-owned enterprises played a key role. Although this has resulted in rapid development, there are two main disadvantages of this development pattern. Under the current financial system and evaluation system, government-led development always ignores market demands and leads to a similar industrial structure in different areas, this goes against the optimum distribution of resources. Meanwhile, large-scale State-owned enterprises pay more attention to vertical distribution of work within their own systems, which can hardly play a leading role in local economic development.

In the future, the Western Development Strategy should make efforts to form and improve a market mechanism that guarantees the effective distribution of resources and establishes a unified, open, competitive and orderly modern market system. Government departments should reduce their direct intervention in microeconomic operations. The authorities should establish a platform for fair competition among all kinds of economies, cultivate capital, technology and talent for production, form an open and orderly capital market, and create an innovating investment and financing system. Local governments should improve their social security coverage to provide a safe economic environment for local residents as well as external investors.

Fifth, the central government should continue providing manpower, materials and financial support to the western region for infrastructure construction, environmental protection, human resource development and improving the local public service capacity. It should also change local officials' political performance evaluation system and help local authorities deal well with the relationship between the government and market. Officials in the western region should thoroughly change their development concept, and make local governments' behavior consistent with improving people's well-being and promoting healthy, sustainable development.

The author is director of the Development Strategy and Regional Economy Research Department of the Development Research Center of the State Council. This is an excerpt of his interview with China Economics Times.

(China Daily 12/26/2013 page8)