The Great Change in the Regional Economy of China under the New Normal

Xiaowu Song, Shiguo Wu, Xin Xu

• Publisher: Palgrave Macmillan
• Year: 2019
• ISBN:
  9789813294752
• Topic: Business
• Subtopic: International Business
• Index: Business

This book provides a comparative analysis of the regional development strategies of east, west, northeast and central China and the development of important economic regions including the Yangtze River Delta, the Pearl River Delta, Beijing-Tianjin-Hebei Region, the middle reaches of the Yangtze River, Chengdu-Chongqing and central-southern areas of Liaoning Province. The book reveals some key issues faced in China's regional development and analyzes their causes while delving into new trends of regional development since the 18th CPC National Congress.
The book concludes by proposing new ideas for regional development under the new normal and analyzing experiences of other major powers in carrying out coordinated regional development. This book will be of interest to urbanists, journalists, and China scholars.

© The Author(s) 2019

X. Song et al.The Great Change in the Regional Economy of China under the New NormalThe Great Transformation of ChinaChina's Economic Transformation, Innovation and Development https://doi.org/10.1007/978-981-32-9475-2_1

Begin Abstract

1. An Overview of China’s Regional Development and Overall Pattern

Xiaowu Song¹ , Shiguo Wu¹ and Xin Xu¹

(1)

State Council of the People’s Republic of China, Beijing, China

Xiaowu Song (Corresponding author)

Email: [email protected]

Shiguo Wu

Email: [email protected]

Xin Xu

Email: [email protected]

End Abstract

China is a large country with a vast territory. Regional policies constitute an important part of the country’s macro-regulation policies. The regional development strategies after the founding of New China can be divided into three stages. After the founding of the PRC and before the reform and opening up, the state generally implemented a regional development strategy tilted toward the inland. From the reform and opening up to the end of the twentieth century, China’s regional development strategy was featured by prioritized development of coastal areas. In the following decade, the central government issued a series of major decisions to promote coordinated development among regions: Western Development Strategy implemented in 1999, the revitalization strategy of old industrial bases in the northeast region in 2003, and the strategy of promoting the rise of the central region in 2006. In 2010, China proposed to promote the initiative of main functional areas and enhance support for special areas such as poverty-stricken areas, ethnic minority areas, old revolutionary bases, and resource-depleted areas at the same time. It also encourages the eastern areas to take the lead in development. The implementation of these major policies has contributed to an initial pattern of coordinated regional development.

1 The Evolution of China’s Regional Development Strategies Since the Founding of New China

1.1 Development Stage Before the Reform and Opening Up

After the founding of the PRC and before the reform and opening up, China generally implemented a regional development strategy tilted to the inland areas. This period can be subdivided into two parts, namely the First and Second Five-Year Plan period and “the three-line construction” period. It should be noted that due to the planned economy at that time, the central government was mainly in charge of the redistribution of financial resources between regions, with limited power of management and control over fiscal resources in local governments. During this period, the national regional strategy was mainly realized via central infrastructure investment plans.

During the “First Five-Year Plan” period, the state initiated economic construction with “156” key projects aided by the Soviet Union as the core, and more than 900 large and medium-sized projects above the designated size as a focus, involving 17 provinces, autonomous regions and municipalities in the inland regions (see Table 1). The First Five-Year Plan for the Development of the National Economy of the People’s Republic of China clearly points out that “Properly distribute industrial productivity in all regions of the country, so that industries are close to raw materials, fuel-producing areas and consumption areas, and suitable for consolidating national defense to gradually improve the economic level of backward areas”. Under the guidance of this idea, from 1953 to 1959, a total of 921 large and medium-sized construction projects with a quota above (with an investment of more than 10 million yuan) were arranged, including the “156” key projects aided by the Soviet Union (150 actual constructions). Among these projects there were 20 metallurgical industrial enterprises, 7 chemical industrial enterprises, 24 mechanical industrial enterprises, 52 energy industrial enterprises, 3 light industrial enterprises and pharmaceutical processing enterprises, 44 military industrial enterprises, with four-fifth located in the central, western and northeastern regions, and 68% of 921 projects in the inland.¹ Among the total investment in infrastructure construction nationwide, the coastal and inland regions accounted for 36.9 and 46.8%, respectively.² During the “Second Five-Year Plan” period, the focus of state investment remained in the inland areas of the central and western regions. After two Five-Year Plans, the economic landscape of the central and western inland parts has been remarkably changed, with major changes in the national productivity distribution as well.

Table 1

Provinces involved with “156” key construction projects during the “First Five-Year Plan” period

Province/Region/Municipality	Municipal layout of “156” key construction projects
Heilongjiang Province	Harbin City, Hegang City, Jixi City, Shuangyashan City, Qiqihar City, Jiamusi City
Jilin Province	Changchun City, Jilin City, Liaoyuan City
Liaoning Province	Shenyang City, Dalian City, Anshan City, Fushun City, Benxi City, Fuxin City, Huludao City
Shaanxi Province	Xi’an City, Baoji City, Tongchuan City
Gansu Province	Lanzhou City, Baiyin City
Hebei Province	Shijiazhuang City, Chengde City
Yunnan Province	Gejiu City
Inner Mongolia Autonomous Region	Baotou City
Sichuan Province	Chengdu City
Beijing Municipality	Beijing Municipality
Henan Province	Zhengzhou City, Luoyang City, Jiaozuo City, Pingdingshan City
Hubei Province	Wuhan City
Hunan Province	Zhuzhou City, Xiangtan City
Shanxi Province	Taiyuan City, Datong City, Houma City
Anhui Province	Huainan City
Chongqing Municipality	Chongqing Municipality
Xinjiang Uygur Autonomous Region	Urumqi City
Jiangxi Province	Nanchang City, Ganzhou City

Source Dong Zhikai, Wu Jiang: The Cornerstone of New China’s Industries: Research on “156” Construction Projects, Guangdong Economic Publishing House, 2004

[Column 1-1]

“156” major projects during the “First Five-Year Plan”

Notes: Among the “156” key projects issued in the first Five-Year Plan of 1955, the Gannan Power Station was changed to Chengdu Power Station and Department of Aviation, while the Shaanxi 422 Factory was divided into two projects. Therefore, indeed there were 154 projects, among which No. 2 automobile manufacturing plant and No. 2 tractor factory failed due to unsettled sites, and Shanxi Pan’an No. 1 shaft, Shanxi Datong Baituyao shaft were not built due to geological problems. Actually, only 150 projects have been officially constructed.

1. Coal (25 projects): Fuxin Thermal Power Station, Hegang Dongshan No. 1 shaft, Hegang Xing’antai No. 10 shaft, Liaoyuan Central shaft, Fuxin Safety Shaft,

Fuxin Xinqiu No. 1 Shaft,

Fuxin Haizhou Opencast Mine,

Xing’antai Coal Washing Plant,

Chengzihe Coal Washing Plant,

Chengzihe No. 9 Vertical Shaft,

Shanxi Lu’an Coal Washing Plant,

Jiaozuo Zhongma Village Vertical Shaft,

Xing’antai No. 2 Vertical Shaft,

Datong E’maokou Vertical Shaft,

Huainan Xiejiaji Central Coal Washing Plant,

Xinghua Wangou Vertical Shaft,

Fengfeng Central Coal Washing Plant,

Fushun West Opencast Mine,

Fushun Longfeng Mine,

Fushun Laohutai Mine,

Fushun Shengli Mine,

Shuangyashan Coal Washing Plant,

Tongchuan Wangshiao Shaft,

Fengfeng Tongshun No. 3 Shaft,

Pingdingshan No. 2 Shaft,

Fushun East Opencast Mine.

2. Oil (2 projects): Lanzhou Refinery, Fushun No. 2 Oil Plant.

3. Power (25 projects):

Fuxin Thermal Power Station,

Fushun Power Station,

Chongqing Power Station,

Fengman Hydropower Station,

Dalian Thermal Power Station,

Taiyuan No. 1 Thermal Power Station,

Xi’an Thermal Power Station,

Zhengzhou No. 2 Thermal Power Station,

Fulaerji Thermal Power Station,

Urumqi Thermal Power Station,

Jilin Thermal Power Station,

Taiyuan No. 2 Thermal Power Station,

Shijiazhuang Thermal Power Station,

Huxian Thermal Power Station,

Lanzhou Thermal Power Station,

Qingshan Thermal Power Station,

Gejiu Power Station,

Baotou Sidao Shahe Thermal Power Station,

Baotou Ningjiahao Thermal Power Station,

Jiamusi paper mill Thermal Power Station,

Zhuzhou Thermal Power Station,

Chengdu Thermal Power Station,

Luoyang Thermal Power Station,

Sanmenxia Water Control Project,

Beijing Thermal Power Station.

4. Iron and steel (7 projects):

Anshan Iron and Steel Company,

Benxi Steel Company,

Fulaerite Steel Works,

Jilin Ferroalloy Company,

Wuhan Iron and Steel Company,

Baotou Iron and Steel Company,

Rehe Vanadium Iron Ore.

5. Nonferrous metals (13 projects):

Fushun Aluminum Factory,

Harbin Aluminum Factory,

Jilin Cable Factory,

Zhuzhou Cemented Carbide Factory,

Yangjiazhangzi Molybdenum Mine,

Yunnan Tin Industry Corporation,

Jiangxi Dajishan Tungsten Mine,

Jiangxi Xihuashan Tungsten Mine,

Jiangxi Guimeishan Tungsten Mine,

Baiyin Nonferrous Metals Corporation,

Luoyang Nonferrous Metals Processing Factory,

Dongchuan Mining Bureau,

Huize Lead-Zinc Mine.

6. Chemical industry (7 projects):

Jilin Dyestuff Factory,

Jilin Ammonia Fertilizer Plant,

Jilin Calcium Carbide Plant,

Taiyuan Chemical Plant,

Lanzhou Synthetic Rubber Factory,

Taiyuan Nitrogen Fertilizer Plant,

Lanzhou Nitrogen Fertilizer Plant.

7. Machinery (24 projects):

Harbin Boiler Factory,

Changchun No. 1 Automobile Factory,

Shenyang No. 1 Machine Tool Plant,

Harbin Measuring and Cutting Tool Factory,

Shenyang Pneumatic Tools Factory,

Shenyang Cable Factory,

Harbin Instrument Factory,

Harbin Steam Turbine Works,

Shenyang No. 2 Machine Tool Plant,

Wuhan Heavy Machine Tool Plant,

Luoyang Tractor Factory,

Luoyang Ball Bearing Factory,

Lanzhou Petroleum Machinery Factory,

Xi’an High Voltage Electric Porcelain Factory,

Xi’an Switching Rectifier Factory,

Xi’an Insulation Material Factory,

Xi’an Power Capacitor Factory,

Luoyang Mining Machinery Factory,

Harbin Electric Machinery Factory steam turbine generator workshop,

Fulaer Heavy Machinery Plant,

Harbin Carbon Brush Factory,

Harbin Ball Bearing Factory,

Xiangtan Marine Motor Factory,

Lanzhou Refinery Chemical Machinery Factory.

8. Light industry (1 project): Jiamusi Paper Mill.

9. Pharmacy (2 projects):

North China Pharmaceutical Factory,

Taiyuan Pharmaceutical Factory.

10. Military (44 projects) (omitted).

Source Dong Zhikai, Wu Jiang: The Cornerstone of New China’s Industries: Research on “156” Construction Projects, Guangdong Economic Publishing House, 2004, pp. 336–345.

The “three-line construction” started in September 1964 and large-scale construction basically ended in 1980, with a focus on Yunnan, Guizhou and Sichuan Provinces in the southwestern region, Shaanxi, Gansu, Ningxia and Qinghai in the northwestern region, as well as the “three western areas” (western Hunan, Hubei and Henan Province). The “three-line region” defined by the state at that time included provinces of Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia, and parts of Henan, Hubei, Hunan, Shanxi, Guangxi, Guangdong, namely all or part of 13 provinces or autonomous regions in total (see Table 2). During the Third Five-Year Plan period, inland infrastructure investment accounted for 64.7% of the country’s total, of which “three-line region” accounted for 52.7%.³ From 1964 to 1980, the “three-line construction” accumulated investment of 205.2 billion yuan, with more than 70% of industrial investment. Over 1100 large and medium-sized industrial and mining enterprises, scientific research institutes and colleges and universities have been built, with a gathering of more than 500,000 well-trained scientific and technological talents and hundreds of thousands of most advanced technical equipment at that time. This is the period in which the state offers the strongest development assistance to the central and western regions, enabling rapid economic development in those regions. An industrial system based on transportation, electronics, chemicals, steel and other industries with a focus on national defense industry has been basically established.⁴

Table 2

Major cities involved in the “three-line” key construction projects

Province/Region/Municipality	Industrial cities distributed with key construction projects
Sichuan Province	Chengdu City, Panzhihua City, Deyang City, Zigong City, Leshan City, Mianyang City, Luzhou City, Guangyuan City
Guizhou Province	Guiyang City, Liupanshui City, Zunyi City, Anshun City
Yunnan Province	Kunming City, Qujing City
Shaanxi Province	Xi’an City, Baoji City, Hanzhong City, Tongchuan City
Gansu Province	Jinchang City, Lanzhou City, Tianshui City
Qinghai Province	Xining City
Ningxia Hui Autonomous Region	Yinchuan City
Henan Province	Luoyang City, Pingdingshan City, Nanyang City
Hubei Province	Xiangyang City, Yichang City, Shiyan City
Shanxi Province	Taiyuan City, Houma City
Chongqing Municipality	Chongqing Municipality

Source Gathered according to national economic plans in the third, fourth and fifth Five-Year Plan periods

[Column 1-2]

Key projects during the “three-line construction” period

Transportation construction: Newly built railways such as Sichuan–Guizhou Railway, Guiyang–Kunming Railway, Chengdu–Kunming Railway, Hunan–Guizhou Railway, Xiangfan–Chongqing Railway, Yangpingguan–Ankang Railway, Jiaozuo–Liuzhou Railway, Zhiliu Railway, Taiyuan–Jiaozuo Railway, and Qinghai–Tibet Railway (Xige Section) etc.

Coal industry construction: Large coal bases of Liupanshui in Guizhou, Weibei in Shaanxi and Shitanjing in Ningxia were built. Large and medium-sized mining areas such as Pingdingshan, Jiaozuo, Hebi, Yima and Xinmi were built in the western Henan area.

Petroleum industry construction: Henan Oilfield, Changqing Oilfield, Jianghan Oilfield, South Sichuan Natural Gas Field and Beizhongba Natural Gas Field in West Sichuan were built. Eight oil and natural gas production bases such as Zhongyuan, Nanyang, Jianghan, Sichuan, Qinghai, Yumen, Changqing and Yanchang were formed.

Construction of iron and steel industry: Newly established projects include Panzhihua Iron and Steel Company, Guizhou Shuicheng Steel Plant, Sichuan Jiangyou Great Wall Steel Plant, Xining Steel Plant, Xining Special Steel Plant, Xi’an Metal Products Factory, etc. Continued construction, renovation and expansion of Wuhan Iron and Steel Company, Daye Iron and Steel Company, Taiyuan Iron and Steel Company, Xiangtan Iron and Steel Company, Chengdu Seamless Steel Tube Plant, Chongqing Special Steel Plant, Guiyang Iron and Steel Plant, Shaanxi Iron and Steel Plant.

Nonferrous metal industry construction: In the aluminum industry, new alumina plants include Guizhou Aluminum Plant and Zhengzhou Aluminum Plant. Guizhou, Lanzhou, Qingtongxia and Liancheng aluminum smelters were newly built. Aluminum processing works in the northwest and southwest (Chongqing) were established. In the copper industry, new copper smelters such as Baiyin, Daye and Yunnan, as well as two copper processing plants in the northwest and Luoyang have been built. In the lead and zinc industry, Baiyin and Zhuzhou smelters have been set up.

Automobile manufacturing industry: Three key enterprises including No. 2 Automobile Manufacturing Plant, Shaanxi Automobile Manufacturing Plant and Sichuan Automobile Manufacturing Plant.

Machinery manufacturing industry: In terms of heavy machinery manufacturing industry, key project of Deyang No. 2 Heavy Machinery Factory was implemented. In terms of electric appliance manufacturing, Deyang Dongfang Power Plant Complete Equipment Company was prioritized. And Guiyang Abr...

Table of contents

• Cover
• Front Matter
• 1. An Overview of China’s Regional Development and Overall Pattern
• 2. Major Achievements and Problems of Promoting Regional Development
• 3. New Trends of Regional Development Since the 18th CPC National Congress
• 4. New Ideas for Regional Development Under the New Normal of Economic Development
• 5. Experiences of the Major Powers in Promoting Coordinated Regional Development
• Back Matter