"Develop the West" Reflects Imbalance in China's Economy

On November 30th a 2-day meeting was held in Guiyang, capital of Guizhou Province, to mark the 10th anniversary of the “Develop the West” policy and discuss improvements in the policy. Zhang Ping, chairman of the National Development and Reform Commission, Lin Shusen, the governor of Guizhou, and Du Ying, vice-chair of NDRC were the featured participants.

The policy is basically a massive investment project that pours money into China’s 12 western provinces to build infrastructure, industrial parks, and factories. This has an impact on the world agri-food system. China’s dominance of the world apple juice market, tomato paste exports, a big chunk of China’s cotton production, and rising trade with central and southeast Asia are linked to this program.

The meeting cited “great achievements” of the program. The growth rate of the western region exceeded the national rate in the third quarter of this year. The western region is in a “new stage of development,” and the program “faces many conflicts and issues.”

The western development strategy reflects the general imbalance in the Chinese economy--the strategy of maximizing GDP growth by building lots of stuff without regard to whether it's needed. The meeting warned that the western region still relies too much on investment for GDP growth, not enough on creating endogenous growth. Industries focus on mass-production of low-end products and many industries have excess capacity. Farmers face difficulty in raising their incomes.

The NDRC’s report urges the western region to follow the central government’s economic work conference directive to improve the quality and efficiency of GDP growth, re-orient the direction of economic development and industrial restructuring, promote reform and innovation. Other goals are to stabilize civil affairs and society. [In other words, arrest, jail or shoot all protestors, religious leaders, human rights lawyers, and troublesome journalists.]

The meeting stressed that support for the “develop the west” policy will continue. Focus will be “two continues” national strategy: continued infrastructure construction and continued ecological balance and environmental protection. Another strategy is “three investments”: investments in improving peoples’ livelihood, self-development capacity, and institutional innovation.