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Region maintains momentum despite economic crisis

By Zhao Xie (China Daily)
Updated: 2009-05-19 07:43

A developed irrigation network using water diverted from the Yellow River has helped make Ningxia a 'new land of plenty'.

While the Chinese economic growth has slowed during the global economic downturn, the Ningxia Hui autonomous region is maintaining strong momentum, Wang Zhengwei, chairman of the Ningxia regional government, told China Daily in a recent interview.

He predicted the region's GDP in 2009 will grow by more than 10 percent year-on-year, about 2 percentage points higher than the expectation for the entire nation.

Wang said his confidence is in part based on achievements last year. "The year 2008 marked the 50th anniversary of the establishment of the autonomous region. We are glad to see the anniversary was celebrated with a number of breakthroughs," Wang said.

One was the region's GDP surpassing the 100 billion yuan mark for the first time to hit 107 billion yuan, a growth of 12 percent from the previous year.

"It was also the 10th consecutive year that our region had a higher growth rate than the national average," Wang added.

Other breakthroughs in 2008 included total length of expressways in the region reaching 1,000 km and installed power generating capacity surpassing 10 million kW.

Wang said "the most exciting news is that the average income of rural and urban residents in 2008 increased at the highest rates in almost 30 years".

"Without the global economic slowdown, we could have higher than 12 percent growth," Wang said, admitting that the impact of the crisis was felt in Ningxia since September 2008.

Local statistics show that in January the region's GDP only grew 5.6 percent from the same period of last year.

Stimulus plans

In response, the local government has begun to implement a series of plans to stimulate market demand.

One initiative is increased investment in infrastructure construction. Wang said fixed-asset investment this year is expected to reach 107.2 billion yuan, up 25 percent from last year.

A large proportion of the budget will go to infrastructure construction, including 48 key projects.

The largest among them is the Ningdong Energy and Chemicals Base, a State-level development zone under construction.

Another important measure to stimulate growth is a financial policy to encourage local lenders to broaden their credit lines, while the government offering guarantees and subsidies to support enterprises with growth potential that need to borrow from banks.

The government also plans to cut taxes and other fees to reduce business costs and extend the region's social security system to cover more residents.

"The establishment of a comprehensive social security umbrella - like pensions for the retired, free education, medical care insurance, unemployment insurance and provision of economically affordable residences - will eventually free residents from worries about the future and they will be more willing to spend money and create demand that will spur growth," Wang explained.

Industrial restructuring

He actually sees the global economic downturn as a blessing that offers the opportunity to restructure local industries.

"We noted the industries with huge energy and resource consumption were the first victims during the economic crisis," Wang said. "This is the right time for us to promote a resource-saving and environmentally friendly economy."

Rich coal reserves and low electricity prices in Ningxia gave rise to many heavily resource-consuming industries, which are also the major sources of pollution.

Since last year, the autonomous region has shut down more than 400 small papermaking and metallurgy enterprises that could not meet environmental standards.

In addition, all coal-fired power plants in Ningxia are now required to install desulfurizing equipment. In 2008, Ningxia ranked the second in China in the rate of emission reduction.

The environmental protection initiative will also benefit the region's agricultural industry. With improved water and air quality, the output and quality of crops are expected to improve significantly.

With its agriculture benefiting from a developed irrigation network using water diverted from the Yellow River, Ningxia is now called a "new land of plenty".

Yet Wang said the government recognizes there is still a need to save water in agricultural production.

"Because of the dry environment in Ningxia, the Yellow River is the major water source for agricultural production. We should improve the efficiency of irrigation, saving more water for the lower reaches because the river belongs to the whole nation," Wang said.