The regional development gap within China is still narrowing and is expected to narrow further, an economist with Singapore’s Asia Competitiveness Institute said on Aug 22.
The regional development gap widened significantly between 1978, when China started opening up, and 2008 when it was already several years after the central government rolled out an ambitious strategy to develop its vast inland west, Tan Kong Yam, co-director of the Asia Competitive Institute, said at a seminar organized by the institute.
The institute is a unit of the Lee Kuan Yew School of Public Policy, National University of Singapore.
China unveiled the national strategy to accelerate economic growth in its inland west in 1999. The gap between the coastal east and the inland west has been narrowing since 2008, Tan said.
Based on researches by the institute, China’s coastal east still leads its west and northeast in terms of economic competitiveness, though the west and northeast are a bit different in terms of their strengths.
China’s west, helped by the national strategy, has turned attractive to investors in recent years as land and labor cost in the east rose over the decades. Tan said that enterprises in the west enjoyed favorable policies like tax incentives.
Nevertheless, Tan said that the regional gap is still wider than it was before China’s opening up and reforms.
“China’s recent strategy of facilitating a New Silk Road to seek mutual economic benefit together with its neighbors in the west is likely to help the provinces in the inland west, too,” Tan said, citing the example of personal computer manufacturing facilities moving inland toward the west as railway connections allow them to send their products to Europe.
Scholars at the seminar on Aug 22 also discussed other topics such as China’s reforms and foreign affairs. Jia Qingguo, dean of the School of International Studies, Peking University, said that he is cautiously optimistic about the prospect of the relations between China and the United States as confrontation is in the interest of none of them.
“Countries in the Southeast Asia should also try to facilitate good relations between China and the United States, as it is not in their interest, either, to be forced to choose sides between the two countries,” he said.
Jia said that China and the United States should also try not to let third countries influence the bilateral relations.
“They should also be sensitive enough to help each other reduce the domestic pressures on their diplomatic relations,” Jia added.