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Keeping Up The Pace of Western Development

By James Jao

First published in the China Daily August 8, 2005

As China marks the fifth anniversary of its bold and daring drive to develop its western region, the same people who, five years ago, were sceptical about its prospects are once again raising doubts.

Particularly in the wake of the central government's announcement that it plans to promote the rise of central regions and the rejuvenation of its northeastern rustbelt, sceptics are asking whether the enthusiasm for developing the western region will end.

They question if China is wealthy enough to take on the task of developing all its areas and territories. They question whether the current administration can tackle problems which have prevailed for centuries. There is no doubt China is an enormous country with a vast landmass, a huge population, abundant, yet underdeveloped resources, and a yawning disparity of income and productivity between different regions.

By achieving the astounding levels of prosperity under the opening-up policy, the eastern region is an eye opener to almost every foreign visitor. But, beneath the prosperous surface there is the lurking danger that today's uneven development between the coastal areas and hinterland may create social instability in the future.

In 1999, the central government made a smart and essential move when it targeted some key development areas and introduced a raft of preferential policies, including tax breaks and income tax reductions for the western region.

Developing the west is not an easy task. The region contains two-thirds of China's territory and 80 per cent of its poverty. However, it is important to remember the old adage that "Rome was not built in a day." The spirit of developing the west must be maintained and further enhanced and China must keep up the momentum.

The current leadership must realize that China will only achieve its greatest success when all of China - its backyard, inland regions and the west - are as well developed as its prosperous coastal regions.

The government must continue to allocate money from its treasury coffers into key pockets in the west for the building of roads, to carry freight, the construction of more schools to educate its young people, to create more service sector jobs, and develop an eco-friendly environment.

While developing its economy, the government ought also to pay special attention to, and provide incentives for environmental protection.

Western China has some of the most fragile and beautiful natural scenery and heritage sites such as the Three Gorges and Jiuzhaigou, all of which, if sensitively exploited, can be a huge benefit to the tourism industry.

To accelerate governmental policies, the central government should also initiate a human resource policy to encourage the relocation of mid-level officials from the east to the west. By supporting the relocation of more open-minded, well-educated, competent and experienced mid-level officials to the western region, new ideas will be contributed and shared.

The rising cost of labour, energy and land are shifting the manufacturing base from coastal provinces to inland. And the government can entice such businesses to relocate their bases to these areas by offering tax benefits to offset initial risk taking.

Once such bases are moved west, entrepreneurs will come into their own to make their businesses work. History has shown that many successful businesses seek to reinvest some of their profits to create even bigger market shares and in so doing, further promote local economies.

Another method is to utilize public and private partnership to develop infrastructure projects. These private partners could be overseas entities.

Finally, it is necessary to reiterate that development of the western region is not, and never shall be, political rhetoric. It is a strategy not a slogan. And the current administration should carry out this policy in order to ensure the prosperity of its future generations.