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    China Business
     Jul 23, 2010
China renews 'Go West' effort
By Mitch Moxley

BEIJING - China is stepping up its 10-year-long effort to develop its vast western regions, home to energy and mineral resources crucial to its future growth. So far, the campaign's results have been mixed.

Earlier in July, China's Communist Party announced a plan to invest more than US$100 billion 23 infrastructure projects "to promote the fast and healthy development of the western areas," according to China Daily, a state-owned newspaper.

The announcement is part of larger campaign to address inequalities between China's western hinterlands and coastal east.

In 1978, Chinese leader Deng Xiaoping opened China to the world and ushered in an era of prosperity in the heavily populated coast. But the country's vast western regions, which make up 71% of 

 
China's area but just 28% of its population, were largely left behind, even though diverted rivers and hydropower projects helped fuel the east's boom.

In 2000, the government launched its "Go West" plan to develop and modernize the west, from the Tibetan plateau to the deserts of Xinjiang, and beyond. In January that year, the State Council announced that then-premier Zhu Rongji would lead a Leadership Group for Western China Development.

Ten years on, development has been slow and tensions between local ethnic groups and majority Han Chinese remain. But the west is key to China's future development.

"The main components of the strategy include developing infrastructure, attracting foreign investment, increasing environmental protection, education promotion, and the retention of high-skilled labor from flowing to richer provinces," state broadcaster China Central Television (CCTV) said in a report.

China's National Development and Reform Commission said the money would be used to build railroads, coalmines, airports and power grids. The money will go to projects in the Xinjiang, Tibet and Inner Mongolia autonomous regions, and in Yunnan and Sichuan provinces. Beijing announced tax breaks for coal, oil and natural gas projects.

Announcing the new funds, the Communist Party touted its success in narrowing the gap between the coastal east and the remote west.

"Economic growth, in sharp contrast to previous records, has reached 11.9% , year on year (in western regions)," Du Ying, vice minister of the National Development and Reform Commission, said at a press conference reported by CCTV. "In the past 10 years, the main macro-economic indicators have more than doubled, and we've seen breakthroughs in infrastructure development."

Du said railway and highway capacity are 1.6 and 2.8 times higher than 10 years ago, and installed power capacity is 5.5 times higher than 2000. Fixed asset investment over the past 10 years has hit 3.6 trillion yuan (US$531 billion), or five and a half times greater than the previous five decades combined.

The government announcement came a year after ethnic violence in Xinjiang autonomous region - pitting Uyghur, a Turkish-speaking Sunni Muslim group, against Han Chinese - claimed the lives of at least 200 and injured 1,600 more. It was the worst ethnic violence in China in decades.

The west's mineral and energy deposits make its development a key part of plans for China's growth. From 2000 to 2009, the government spent some $325 billion on projects in the western regions, China Daily reported.

Still, the west lags behind China's more prosperous regions. And the massive hydropower and infrastructure projects there have caused problems that include desertification, soil erosion and water scarcity.

Western China's GDP per capita has increased in recent years from $600 to $1,933, but the gap with the rest of China remains wide. The west's GDP was only 17.8% of China's total in 2008 and its average GDP per capita was only 41.09% that of the east, says a 2010 report by the Center for Studies of China Western Economic Development at North-west University in Xi'an, Shaanxi province.

In a July conference here, President Hu Jintao said western China would become the cornerstone of the country's energy programmes. Hu said that in the next 10 years, living standards there will be "greatly improved" and the environment would be "better protected".

This is part of a two-pronged campaign to develop the west and soothe ethnic tensions, Ma Dazheng, deputy director of the Border History and Geography Research Center at the Chinese Academy of Social Sciences told IPS.

But China's pledge to develop the west has done little to quell ethnic tensions, with critics arguing that the government was trying to dilute ethnic majorities in Xinjiang and Tibet through investment and immigration.

In March 2008, violent protests broke out in Tibetan regions to mark the failed 1959 uprising in Tibet against Beijing's rule. The July 2009 clashes between Uyghurs and Han were followed by an outbreak of violence in September in Urumqi, the capital of Xinjiang.

Chen Xiushan, director of the Institute of Regional and Urban Economics at Renmin University of China, said that Beijing's campaign to develop the west has had some success, but that development has been unbalanced. "Some areas have developed soundly, such as Chengdu city in Sichuan province, and Chongqing [municipality]," Chen said. "But conditions in some areas have even deteriorated despite the years of investment."

Chen Yao, a professor of regional economics at the Chinese Academy of Social Sciences, said western development, including mass migration from east to west, can help alleviate overpopulation in the east.

"If [migrant workers] continue to move to big cities, like Beijing and Shanghai, it will be a disaster for China," Chen said. "The huge resource and environmental pressure faced by China can also be attributed to unbalanced population distribution. The rapid development of the west may alleviate this problem."

(Inter Press Service)

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