Two things have caused people to have second thoughts about China's strategy to develop its vast western region. One is the decision by central government in 2003 to reduce the scale of annual State bonds for investment in the west and to rejuvenate the country's northeastern rust belt. The other is the 2004 decision to boost the development of central China.
Some are asking whether the western region has lost its high priority on the government's working agenda?
For Lin Yueqin, a researcher with the Chinese Academy of Social Sciences, the answer is simple.
Using the metaphor of the chicken and egg, he suggests the government's current plan is to create metaphoric egg-laying hens in the western region.
"Time is relatively ripe for some parts of the western region to produce profit after nearly five years of heavy investment in infrastructure," he said.
Over the past five years, a total of 850 billion yuan (US$100 billion), of which 400 billion yuan (US$49 billion) of central government funds, were earmarked for water conservation, communications, environmental protection, compulsory education and healthcare, the latest official figures indicate.
The region has witnessed impressive progress since the western development strategy was launched in 1999, especially in the fields of infrastructure and environmental protection.
As the country is transforming its centrally-planned economy to a market-orientated one, the government's main role has changed to the one which helps create a better investment environment, said Lin.
"It's time for the central government to give hens, rather than eggs, because eggs can only feed locals temporarily, but hens can let them be fed long term."
This does not mean the government will completely pull back from investment activities.
It should, he suggests, continue to play a lead role in facilitating environmental protection, basic science research, social security and education.
His second metaphor moved from the farmyard to the family, albeit a very large one in China's case.
"A father has several sons and every one longs for extra love and attention for further growth."
Indisputably, the western region is a government priority, but it needs to be included in the balanced development strategy of the whole country.
Over the past 26 years, beginning in 1978 when China launched its reform and opening-up moves, the nation has brought about an economic miracle, one which saw the per capita annual gross domestic product (GDP) exceed the landmark US$1,000 at the end of 2003.
But regional economic and social disparities remain between the country's booming coastal, central and western regions. The reason for this has much to do with the fact that coastal regions were the first beneficiaries of the country's 1978 opening-up strategy.
"The achievements, experiences and China's economic strength over the past two decades have made it possible now for the country to achieve a balanced development through an equilibrium strategy," said Lin.
Such a strategy has taken shape as a result of top level leadership plans to transform underdeveloped regions.
The "Western Development Strategy" of 1999, the 2003 decision to revitalize its old industrial bases concentrated in the Northeast and the 2004 plan to develop central China comprised that strategy.
Despite the policy shift, central government has vowed to place a high priority on western development.
Documents from the Office of the Leading Group for Western Region Development of the State Council suggest the government intends to make the western region both a magnet for investors and a back-up for the country's sustainable development.
It also makes clear development measures must accord with China's overall situation.
Rapid economic growth has been achieved in the past 26 years. However, the country has prioritized the pursuit of economic growth with little consideration given to environmental costs, and in some regions, especially in the west, the consequences have been serious degradation.
To prevent similar ecological deterioration in other areas, the government began to embrace the concept of "scientific development" -- the co-ordinated development of the economy, society and the environment.
To redress, or at least prevent further environmental degradation in the west, the office pledged to strengthen environment protection. To this end, 7.86 million hectares of farmland have been given back to woodland and trees planted on 11.33 million hectares of barren hillsides and land by the end of 2004.
But challenges such as how to resolve soil and ground water pollution in the area, the source of most of China's large rivers, still remain.
Further efforts, including restraining industrial development and cutting down on the use of natural resources are among the moves proposed. In the meantime, the government is committed to returning farmland to forests and pasture and to strengthening industrial pollution prevention and controls.
These environmental moves will be in conjunction with developing agriculture best suited to local conditions, building infrastructure, increasing farmers incomes and going all out to develop mining, energy, machine-building, traditional Chinese medicine processing, tourism and other industries.
Since China's western, central and eastern regions are economically and socially linked by river, rail, air, west-east gas pipelines and electricity transmission projects, experts suggest that they should remove provincial border barriers and seek to co-operate more extensively.
James Jao, a US expert with the State Council says separate development of eastern, central and western regions should be discouraged.
"The regions have disparities but they should be economically and socially linked," said Jao, also chief executive officer of the US-based architectural design company Jao Design.
Citing the example of the Three Gorges Reservoir area development, covering the Yangtze River's middle and upper reaches and its hundreds of tributaries, he said: "The region needs united measures in order to develop local economies, tourism and ecological protection."
Similar co-operation was achieved by Chongqing Municipality and Yichang in Hubei Province which played an important role in strengthening economic co-operation in the reservoir area.
Researcher Lin Yueqin agreed with Jao's point. He said there should be no gulfs between China's western, central and eastern parts, and co-operation should be emphasized among the regions.
"Only by keeping this in mind, can the western regions become part of China's tremendous market and emerge as a truly global market player," said Lin.
Nickel City a dollar miracle
A letter of thanks on November 25, 2003 from Beijing was an inspiration to every employee of the Jinchuan Group Ltd, one of China's leading nonferrous metal producers based in Northwest China's Gansu Province.
Sent by Beijing Shougang Metallurgical Research Institute, the letter praised the efforts made by the company in supplying a dozen "special materials" for China's first manned spaceflight, Shenzhou V, which had blasted into orbit a few weeks earlier, on October 15.
"The letter has undoubtedly inspired each of us in Jinchuan," said Ma Huzhong, an employee with 15-year experience in the company.
"We have been proud of being the biggest nickel producer in China for decades, but never expected to be connected with the glory of Shenzhou V."
Located in Jinchang , Gansu Province, the company is considered to be the city's economic driving force, contributing about 70 per cent of its gross domestic product every year, said Song Guangfu, an official with Jinchang city government.
As 90 per cent of China's nickel is produced here, Jinchang has earned the nickname "City of Nickel."
It is one of dozens of well-performing enterprises in China's vast western region, most of which are heavy industries, a success much owed to the abundant energy and natural resources there.
Another example is Jiayuguan, also a city in Gansu, pillared by its rich steel resources.
"The two cities have thrived as a result of the development of the industries," said Song.
In 1958 a 6,500-metre-long by 500- metre-wide seam of ore was found at the foot of Longshou Mountain .
Official data shows that its general ore reserves have surpassed 520 million tons, including 5.5 million tons of nickel and 3.43 million tons of copper, ranking it the third largest ore deposits in the world.
However, for a long time it was not fully explored and developed.
Ma Huzhong told China Daily that the first 22 tons of nickel was extracted in 1964, some five years after the company was founded in 1959.
After 35 years of development, the company's annual nickel production capacity reached the milestone figure of 40,000 tons in 1999.
Something of a "miracle" was achieved in the ensuing five years after China's "go west" policy was adopted.
For the 2000-04 period, Jinchuan's annual nickle production capability increased by 33,000 tons. In 2004, Jinchuan yielded 73,000 tons of nickel, ranking it fourth in the world, after Russia, Canada and Australia.
In addition, copper yield increased from 19,000 tons in 1999 to 130,000 in 2004, said Ma.
Jinchuan has gained much from its exploitation of the metal, with sales jumping from 3 billion yuan (US$370 million) in 1999 to 15 billion yuan (US$1.8 billion) in 2004, and tax payments and profits up from 330 million yuan (US$40 million) to 2.38 billion yuan (US$290 million) during the five years.
Jinchuan alone contributed one fifth of the province's industrial profit in 2004, yielding 1.2 billion yuan (US$145 million) of the total 6 billion yuan (US$730 million).
The recent rise in the unit price of nickel on the international market has brought even more rewards than expected.
But, rapid expansion of the company has proved a mixed blessing.
One of the major problems has been the high discharge of sulphur dioxide.
"Jinchuan is charged over tens of thousands yuan each year for discharging pollutants," an official surnamed Qi with the Gansu Provincial Administration for Environment Protection said.
"I saw some sky-blue particles flying in the air, and it was an irritant to my nose, when I first arrived in the city three years ago," said R.C Lao, a Canadian of Chinese origin working as an environmental expert in China.
Lao, resident project manager of the Canada-China project on cleaner production, is introducing a pollution-control technical programme to Jinchuan in a bid to cut emissions.
Under the programme, tens of thousands of tons of water resources can be saved, and the production capacity for nickel will be raised. "But how to deal with discharged pollutants tops our production agenda," said Liu Suguang, director of the air safety office of the Jinchuan Group.
Transformed business climate
In the past decade since he arrived from Britain to manage a joint venture in Xi'an, Qin Siliang as witnessed a transformation in the business and service sector.
Gone are the days when customs officials barely concealed their suspicious attitude, and wearisome banking practices were unfathomable to outsiders.
Qin spent his first two years living in a hotel. Costs were high, but it had other, not so obvious advantages, about which he was to find out when he moved into private accommodation.
"In the first two years working in Xi'an, we had to have to live in a hotel, because there were no residential houses for foreign investors and businessmen, and the policies did not allow foreigners to live in local residential communities," said Qin.
"Two years on in 1997, with the policies improved, we bought a residential house with some 90 square metres in the electronic park, then the best community the city had developed."
But Qin and his family discovered the service sector they were accustomed to in the West, was virtually non-existent.
From getting someone to repair blocked toilets to carrying and changing gas cylinders for heating, had to be done themselves.
But more important were the difficulties Qin encountered with banks. At one point things became so bad that his company stopped co-operating with a Chinese firm.
"Once we remitted US$500,000 to the account of one of our co-operative partners only to be told the sum could not be used without the permission of the general manager, who was an American," he told China Daily.
According to the regulations of the bank, customers must leave their seal specimen in the bank in order to make withdrawals. "But the problem was the foreign general manager had no seal, as the Chinese have, and his specimen signature -- the norm elsewhere -- was rejected as an alternative," said Qin.
To solve the impasse, the Chinese partner's accountant left his seal specimen with the bank. Unfortunately, he later withdrew part of the sum without the permission of the general manager. The resulting row ended that co-operation.
Also at that time only one bank in the city was allowed to conduct deals in foreign currency.
The boom in shareholding banks has, however, changed that and many more choices are available today, said Qin.
"Foreign customers are now able to leave their signatures instead of seal specimens in banks," he added.
Qin's company has to deal with many imported materials and exports a large proportion of its finished products. Consequently, he has almost daily dealing with customs.
In the past, customs provided little in the way of services. And invariably he got the distinct feeling they checked his company all the time convinced they were smuggling.
"But now it takes only two days to complete one cycle of our import and export, and the production materials we purchase from overseas arrive in Xi'an within a dozen hours. In the past, it often took three to four days before these materials were delivered to our door," said Qin.
'Go West' campaign demands long-term, consistent devotion
Sunday marked the fifth anniversary of the official launch of the "Go West" campaign, a programme aimed at stimulating the development in China's underdeveloped western regions.
The initiative, covering 12 interior provinces, autonomous regions and municipalities, was hailed then as a timely and strategically important move to curb the China's widening regional disparity.
Enormous achievements have been scored since the campaign started.
The gross domestic product in the regions covered by the initiative grew year-on-year by 8.5, 8.8, 10, 11.3 per cent from 2000 to 2003, respectively, and the figure in 2004 is expected to hit 12 per cent. All of them were far ahead of the growth rate of 7.3 per cent recorded in 1999.
People's living standards in the west have also witnessed noticeable improvements.
In 2003, the disposable income of city dwellers and farmers in western regions was 7,205 yuan (US$868) and 1,966 yuan (US$237), increasing by 1,774 yuan (US$214) and 307 yuan (US$37) from that in 1999.
Yet the yawning regional gap, which prompted the central government to work out the "Go West" campaign in the first place, instead of narrowing, is still widening.
In 2003, the national average per capita disposable income of city dwellers and farmers was 8,472 yuan (US$1,024) and 2,622 yuan (US$317), showing people in western regions are still much less better-off than their peers in other parts of the country.
But this should not underestimate the big role the campaign has played in bridging the gap.
The western region's economic advancement after the "Go West" policy was adopted indicates that the policy did work to their favour.
The western regions could have lagged even further behind their coastal counterparts without the policy and fiscal support offered by the central government in the past five years.
The stark reality on the ground only shows that bridging the gap between inland and coastal areas will be nothing but a long-term undertaking, a task that demands both our patience and steeled resolve.
When taking on long-term undertakings, patience always runs thinner as time goes by with no substantial progress being made.
As the patience runs out, so will our momentum.
We should keep it in mind that the cause of western development is a long-term endeavour that needs our consistent devotion.
Another concern is that the western development initiative, launched with great fanfare, will gradually fade into oblivion.
The central government has, in the past two years, decided to embark on similar regional development schemes in other parts of the country.
The annual central economic work conference, which ended on November 29, made accelerating central China's development, a scheme coded "Central China's Emerging," one of the six major economic tasks this year.
Back in 2003, the Northeast Revitalization Plan was initiated to reinvigorate the country's rust belt.
It is worried that the western development programme would be drowned out and lose favour when the government diverts some of its attention to other parts.
To remove those worries, it may be of help to put regional development plans on a co-ordinated track, making them not as improvised but regular and consistent strategies.
A western development facilitation law, which has been put on the legislation agenda on the National People's Congress, the country's top legislature, shows the government has noticed the need.
The huge regional disparity not only hinders national economic advancement but also threatens our very social stability, to which we always attach great importance.
As the country now emphasizes the importance of balanced development, the push to see the country's underdeveloped regions catch up with their coastal cousins is more urgent than before.
As such, the western regions should build on what they have achieved in the past five years and strive to make even greater strides in the years to come.
The past five years have only heralded the prelude to a strategically important endeavour that is just unfolding and one that may last for decades.
(China Daily January 17, 2005)
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