By Wu Zhenyu, Long Haibo,the Department of Macroeconomic Research, the DRC

Research Report No 143, 2013

Abstract:

The economy in China's northwest region continues to run at a high level, with the growth rate gradually slowing down from January to May, 2013, indicating that the structural adjustment has produced initial results.

At the moment, the economy is faced with four major problems: insufficient internal power for independent growth, increasing local fiscal revenue and expenditure pressure, a single industrial structure, and deviation between industrial electricity consumption and industrial growth.

Considering the economic operation in the second half of the year and long-term economic operation, the downward pressure on economic growth remains. The western region faces challenges in economic development, transformation and upgrade.

China should carry out regulatory policies to specific targeted regions, and combine overcapacity adjustments with regional industrial layout optimization. Meanwhile, it should expand domestic demand and implement regional development strategies to realize stable growth, economic restructuring, domestic demand expansion and quality of life improvement.