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Leaders from the Yangtze Delta, which boasts one of the most vibrant regional economies in China, have vowed to step up their co-operation in search for common prosperity.

After a Sunday meeting in Hangzhou, capital of Zhejiang Province, Party and government chiefs of Shanghai, Zhejiang and Jiangsu provinces voiced their determination to increase exchanges and co-operation in the fields of technology, industrial restructuring, labour division, reform and environmental protection.

"The top leaders are meeting on this occasion to give direction to the region's development ahead of the 11th Five-Year Plan (2006-10), which begins next year," said Chen Xiaoyun, deputy head of the Shanghai Municipal Government Co-operation and Exchange Office.

Chen said yesterday that the National Development and Reform Commission had taken the lead in pushing forward regional development.

Past meetings between Shanghai, Jiangsu and Zhejiang were usually held at operational levels, focusing on certain specific areas. Local leaders often considered their own interests first before seeking common development.

The meeting this time has gone beyond previous ones, enabling the leaders to discuss co-operation at a higher level, Chen said.

Shanghai, Jiangsu and Zhejiang provinces are all ranked among the top 10 players in terms of economic strength.

Their combined gross domestic product (GDP) exceeded 25 per cent of the nation's total last year and 16 cities in the three places absorbed about 54 per cent of the actual foreign direct investment (FDI) in China in the first six months of this year.

While the three places have been conducting extensive co-operation and exchange in almost every field, they are also facing head-on competition, which has slowed down regional economic integration.

Operating under three different municipal and provincial governments, they face a segregated market, vicious competition and local protectionism that combined have undermined the free flow of economic essentials and impeded economic co-operation.

A report from the Fujian Provincial Academy of Social Sciences shows that local leaders from Shanghai and three cities in Jiangsu Suzhou, Kunshan and Nanjing have competed for Taiwanese investment by undercutting land prices and offering tax breaks disallowed by certain State regulations.

Extremely similar industrial structures in the three places also mean less room for comparative advantage, as well as scattered investment and production.

The Yangtze Delta also faces the problem of redundant facilities such as harbours and airports, most of which were built in the last decade. Many airports in the region handle less than 100,000 passengers a year.

The environment has been another hard nut to crack for the region. About 3.2 billion tons of sewage, 10 percent of the nation's total, pours into tiny Taihu Lake alone each year. Enditem

(China Daily December 27, 2005)