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Infrastructure expansion in rural areas key to growth

Hu Yongqi
Updated: May 4,2016 9:39 AM     China Daily

The central government’s decision to improve the transportation network in impoverished rural areas is expected to boost local economies and raise living standards by broadening sales channels for agricultural goods and creating job opportunities.

The State Council, China’s cabinet, is pooling investments nationwide to build 1 million km of highways in these areas and start 100 projects by 2020 to build and expand expressways, railways and airports to connect the far-flung regions, especially in ethnic and border areas, according to a statement from the cabinet’s executive meeting presided over by Premier Li Keqiang on April 20.

The statement said roads leading to villages will be rebuilt with concrete or asphalt in the next five years, and all villages will have access to regular buses so travel will be more convenient for tourists. Additionally, all county seats will be connected with high-quality highways, and railway and expressway networks will incorporate all government seats of cities or prefectures across the country.

To achieve the goals, more favorable fiscal and taxation policies will be enacted by the central and local governments. The roads will need to be well managed and maintained after upgrading, the statement said.

The meeting was convened to work out specific measures to realize targets Premier Li announced in his Government Work Report in March, which said investments will be made to build railways and highways in the central and western regions this year.

Experts said rural areas will be the next target for the country’s infrastructure investment, which is expected to expand the market for agricultural goods and tourism, boost domestic demand and create more jobs.

Impoverished rural areas will definitely benefit from the plan, said Li Guoxiang, a researcher at the Rural Development Institute at the Chinese Academy of Social Sciences.

Across the country, many places still have the slogan “Build roads before making wealth” painted on walls, which indicates the importance of transportation networks in rural areas.

According to Li Guoxiang’s research, a large number of villages still rely on dirt roads to reach the outside world and have difficulties when rainy season landslides occur. “Thousands of towns and villages have rich resources in tourism and agricultural products, but no one wants to go there if the road is badly built,” he said.

The weak transportation system has stunted the development of rural areas, said Dang Guoying, another researcher in rural development at the think tank.

Upgraded highways will help farmers sell their produce and bridge the economic gap between cities and villages in the long run, Dang said.

Amid reduced economic growth, the plan will boost domestic demand as more consumption is forecast for concrete, iron and steel, and other construction materials, Li Guoxiang said.

China has forsaken massive stimulus and started focusing on targeted infrastructure investments. “Under the guidelines of the new type of urbanization by the central government, rural areas will see more investments in transportation, Internet facilities, and other amenities,” researcher Li said.

The plan also matches the trend of the country’s manufacturing sector, which is moving toward the less developed central and western parts of China. Both researchers said factories in the east saw a decline in the new migrant workers recruited from the central and western regions last year, the first time in the past 30 years.

Improved transportation in rural areas will play an essential role in the country’s economic restructuring and balance among regions, Li Guoxiang said.