Problems and Difficulties of Development of the Western Zone in China

Zhang Kai


      Half a century after the Peoples Republic of China was set up, the CPC announced its attempt to develop the Western zone. This includes 11 provinces and the Chongqing Municipality. Most of the areas are inhabited by national minorities. The zone is characterized by underdeveloped infrastructure, inconvenience of transport, and slow economic development. Its weight in the national economy was only 14.5% in 1995, yet its population was around 360 million, amounting to about 30% of the total population of the country; its land area was almost 60% of the countrys area.

      The increase in income was very slow for the rural population, especially those in the mountain areas. The official statistics have it that in the last two years, there has been some improvement, and the average per capita annual real income of the urban population in some provinces in the West amounted to RMB 4,500 yuan and even 6,000 yuan. How inflated the figures are, one cannot know. The rural situation is certainly worse. According to a report by a journalist of the Hong Kong TVB, which was broadcast on June 11, the interviewee, Jiang Jian, a volunteer to Yunnan from Shanghai, said that the annual income of the mountain population in Mojian County, Yunnan, was one or two hundred yuan. Apple Daily reported on June 29 that the per capita annual income of peasants in Guizhou Province was a mere 1,400 yuan.

      Premier Zhu Rongjis explanation to the National Peoples Congress in March 2000 about the move to develop the West was: This is significant for the expansion of the domestic market, sustained growth of the national economy, and coordinated development of the regional economies, for the ultimate realization of common wealth, unity of the nationalities, maintenance of social stability, and consolidation of the defense of the border areas.

      The picture that was drawn was grand, but the context in which the project was conceived and the difficulties underlying the project were complicated. Economically, the impact of the Asian financial crisis on China was quite serious, and in addition, the anarchy of the market economy has also caused huge stocks of unsold goods. One solution is to look for domestic markets. However, the general poverty of the population in the West does not actually provide the market for these goods. It would require a lot of investments by the state on infrastructure and employment opportunities before the West can be a significant market for domestic goods.

      Politically, the tensions and conflicts between the Han and the national minorities is one key issue in the question of development of the West. When a Hong Kong delegation of businessmen was to visit the West to probe investment possibilities, a statement of serious warning was issued by the East Turkistan Information Centre which is an organization fighting for Xinjiang independence. There was also a serious confrontation between Han and Uygur students of the Chang-an University in Xian. Foreign investments into Xinjiang were seen by the East Turkistan Information Centre as incurring massive migration of the Han people into Xinjiang, causing Han-ification of Xinjiang against the minorities there.

      Socially speaking, the instabilities of Chinese society are aggravating. Zeng Qinghong, Director of the CPC Organizational Department, wrote a report entitled Investigation Report of China 2000-2001: Study of the peoples internal contradictions under a new situation. It pointed out that the indignation of the general populace about social and economic inequalities, corruption of officials and indifference of cadres has seriously aggravated. There is an increase in economic, ethnic and religious confrontations. Massive protests are spreading everywhere, and participants sometimes numbered over 10,000. The rural-urban, East-West and rich-poor gaps have widened to a point of warning. Our accession to the WTO may bring more risks and pressures, and it is expected that more mass actions may erupt and seriously affect social stability, or even affect the peaceful implementation of Reform and Open Door policy.[1]

      What people are most discontent with, according to the Survey report on the mentality of Chinese urban population published by the Chinese Academy of Social Sciences, is employment, corruption, serious divide between the rich and the poor, and deterioration of social morality. 88.9% of the interviewees were most discontent with the question of urban employment.[2]

      As for government investments in the West, despite the rhetoric about increasing investments, the weight of investment between the Eastern, Central and Western zones has been unfavourable to the West. The Eastern zone constitutes 10% of the countrys area, but received, in 1999, fixed assets investments of 1,294 billion yuan as compared to 477.3 billion yuan and 344.6 billion yuan for the central and western zones respectively. In 2000, the figures were, respectively, 1401.5 bn, 543.2 bn, and 394.3 bn.[3] In 2001, the government announced that investment into the Western zone will be around 300 bn yuan.[4]

      Without a radical increase in government investment, the hope of investments for developing the West goes to private foreign investments. Favourable conditions have been offered. The state has announced three tariff concessions for investments going to the Western zone. Various provinces make their own concessionary offers. Shaanxi Province promised that when outsiders buy up state-owned enterprises, they need not commit to the old debts; procedures will be simplified to facilitate investments; the government will take care of the relocation of surplus labourers. A Hong Kong businessman, coming back from the visit, commented that the promises made by the government were too good to be credible.

      Xinjiang also offered concessionary measures, including allowing foreign investments to own development rights, market sharing rights and others. As for land use rights, there were also concessions on rent or sale price.[5] Four days after report of the above measures was published, Wen Hui Bao again published a statement by Hu Zhizhi, Director of the Land Use Bureau under the China National Land Resources Department, which reiterated that land is state owned property and that land transactions at prices lower than those stipulated in state regulations are not allowed, and such acts may be regarded as criminal acts.[6]

      China has an annual foreign capital inflow at USD 42.7 billion. Up to the end of April this year, 371,000 foreign enterprises have been allowed to operate in China. The total investment fund of contracts signed with foreign investors amounted to USD 696.9 billion, and the actual amount in usage was USD 359.5 billion. It is expected that after Chinas accession to WTO, annual inflow of foreign funds will exceed USD 50 billion. As for Hong Kongs investments in mainland China, up to end of April this year, it was USD 174.2 billion, which was 48% of Chinas total foreign investment. After the announcement of Chinas development of the Western zone, some Hong Kong newspapers and businessmen have been using the term conquest of the West. This indicates the mentality of capitalist conquest. One serious concern that has been expressed is the ruthless exploitation of natural resources and the dire consequences for the environment. One example is that the Xinjiang Construction Corps has stated its decision to develop the dyeing industry,[7] and in Xinjiang where water resources are very much in shortage and much reliance is on underground water, the consequences for the environment is unimaginable.

      Scramble for profits and exploitation of the natural resources are some of  the driving forces behind the development of the West.

28 June 2001

[1] Quoted from Apple Daily June 6, 2001, and Oriental Daily June 4, 2001.

[2] Quoted from Ming Pao, May 3, 2001, on 2001 Social Blue Paper published by the Chinese Academy of Social Sciences.

[3] The 2000 figures were from the 2000 bulletin of the State Statistics Bureau; the 1999 figures were calculated from the increase percentage indicated in the above bulletin.

[4] The figures were revealed by Li Zibin, Deputy Director of the State Council Western Zone Development Bureau, and reported by Wen Hui Bao, May 12.

[5] Wen Hui Bao May 29.

[6] Wen Hui Bao June 2.

[7] Ming Pao, May 30.