Five-Year Evaluation of West China Development

The amount of money that China poured into developing its western provinces from 2000 to early this year has reached 460 billion yuan (about 55.2 trillion won) in direct funds from the central government and 500 billion yuan (about 60 trillion won) in indirect assistance including shared taxes and project subsidies.

Beijing has undertaken the “West Development Policy” to reduce the income gap between the eastern and western part of the nation by developing the western provinces. Regions subject to the project are Sichuan, Guizou, Yunnan, Gansu, Shanxi Provinces, Uyghur autonomous area in Xinjiang, and Zhuang autonomous area in Guangxi, which comprise 70.5 percent of the entire Chinese territory.

The first five years of the 50-year massive project is coming to an end. Wrapping up the first stage of laying Social Overhead Capital (SOC), has the country attained its goal of reducing the gap between the rich and the poor?

Spectacular Infrastructures-

With more than 100 trillion won in investment, SOCs are improving notably. Highways in the western region increased to 7,069km as of 2003, 2.8 times that of 1999 (2,529km) before the development project was launched. Roads also increased by 23 percent to 5,318 km during the same period.

The number of Internet users in 2003 reached 7.08 million, 26 times that of 1999. The number of mobile phone users also rose more than six times during the same period.

The improved SOC has contributed to the economic situation. The western regions’ Gross Domestic Production (GDP) in 2003 jumped to 1.5 times of the figure of 1999 to $276.4 billion. The total volume of international trade also doubled in the same period.

Lack of Substance-

However, it is reported that the government failed to achieve the main goal of “easing the gap between the rich and the poor” between east and west.

An opinion poll conducted by China Economic Times on March 10 revealed that more than 60 percent of respondents said, “The gap between the east and west has widened after the launching of West Development Policy.”

This is a result of the west growing fast with the recent improvement of infrastructure and the east, which was already equipped with enough industrial infrastructure, developed faster.

The newspaper pointed out that the gap of economic growth between the east and west was widened to 8.39 percent in 2000 from 2.54 percent in 1999. GDP per capita of the west grew 33 percent (from $498 to $663) from 1998 to 2002, while that of east rose 41 percent (from $1,212 to $1,704).

Hyung-June Park lovesong@donga.com