Coordinated regional development responds to the times
A worker builds furniture at a factory in Luannan County, Tangshan City, Hebei Province, on Feb. 24, 2022. Luannan County takes advantage of the Beijing-Tianjin-Hebei integration strategy and develops a comprehensive furniture manufacturing chain, greatly boosting local economic growth. Photo: CFP
Over the past 40 years of reform and opening up, China’s regional economy has gradually shifted from “imbalanced” development to “coordinated” development. In particular, since the 18th National Congress of the Communist Party of China (CPC), China has implemented an overall strategy of regional development, continuously releasing the potential of regional and marginal areas, surpassing the vast majority of countries at the same development level in economic performance, while narrowing the development gap with the United States and other Western developed countries.
The dynamic evolution of our regional economy from “imbalanced” to “coordinated” development is based on the actual conditions of natural resource endowments in different regions across China, and their comparative advantages. With the aid of modern transportation, infrastructure, and communications networks, such regional arrangements reflect the spatial layout and strategic measures to achieve high-quality sustainable economic development. “Optimizing regional economic layouts and promoting regional coordinated development” are of great theoretical and practical significance for China to start a new journey of building a modern socialist country in all respects and forming a new pattern of coordinated regional economic development.
Meeting the times
From the end of the 1970s to the end of the 20th century, China’s regional economic growth prioritized its eastern coastal areas. On the one hand, this strategy resulted from China’s lack of experience and lessons to draw from in its transition from a planned economy to a market economy—and from an agrarian society to a modern industrial and commercial society. On the other hand, it was necessary to concentrate all of the scarce factor resources to rapidly cultivate a few economic growth centers. Expanding from there to the vast coastline areas and beyond, drives the common development of inland areas. In theory, we can call the “one point driving a region” growth model “imbalanced” regional economic development, because it allows a few places to attain wealth first, and then they drive the development of other regions. This was the basic feature of China’s regional development for the first 20 years of reform and opening up.
In the early stage of reform and opening up, the economic growth centers included four special economic zones, 14 coastal cities, and later, the development of the Pudong New Area in Shanghai and Hainan Island. However, due to the underdeveloped transportation infrastructure, these economic growth centers only supported the development of some nearby cities and rural areas, and their expansion effect on inland areas was rather limited.
Therefore, the gap between the per capita GDP levels of eastern, central, and western regions in China continued to widen, as did urban and rural per capita disposable income levels. For many years, the evident differences in average annual growth rates led to the formation of a “three-step waterfall” from east to west, which constitutes three different economic development groups with an insurmountable gap between them. Therefore, to narrow the national per capita output and income gap, it is urgent to achieve regional, urban and rural coordinated development.
In the 21st century, China’s accession to the World Trade Organization has further improved its level of opening-up. The proportion of foreign trade dependence—the total foreign trade in GDP—has rapidly increased from less than one-third in 2001 to 64% in 2006. In recent years, China’s foreign exchange reserves remain steady at over $3 trillion, providing a strong capital base for China’s foreign investment and making it one of the world’s largest foreign capital inflow and outflow destinations.
All these laid a solid material and technical foundation for China to adopt a “dual circulation” development pattern in which the domestic economic cycle plays a leading role while domestic and overseas markets reinforce each other.
However, the global economic crisis in 2008, the European debt crisis in 2010, and the comprehensive global crisis caused by the COVID-19 pandemic have brought new challenges to the external development and internal vitalization of China’s coastal areas. In response to this reality, traditional industries have begun to shift to inland areas and Southeast Asia. Economic growth centers with higher levels of economic development have begun to improve the quality and resilience of economic development through industrial transformation and upgrading, technological innovation, and deepening reform. Inland areas, well known for their vast land and array of natural resources, are taking advantage of the national strategy of “Western development, vitalization of northeast China, and the rise of central China” to catch up with eastern coastal areas. The situation in central and western China has improved considerably in the last two decades, and rural poverty decreased on a striking scale. In recent years, economic growth rates in the west of China have even been higher than in coastal areas.
At the same time, China has made rapid progress in transportation infrastructure, the internet, big data, and artificial intelligence, giving full play to its economic advantages of scale and scope as the world’s most populous country with vast territory. High-speed railways, expressways, aviation, water transport, “internet plus” and other three-dimensional transportation and communication networks have formed efficient nationwide coverage, greatly compressing the temporal costs for factors of production, information, goods, and services, and releasing the huge development potential of underdeveloped inland areas.
In 2020, seven inland cities had a GDP of more than 1 trillion yuan, among which Chongqing, Chengdu, and Wuhan rank 5th, 7th, and 8th respectively among the trillion-yuan cities in China. In terms of total social consumption, Chongqing and Chengdu ranked 3rd and 5th respectively, both surpassing Shenzhen in national statistics. In fact, these inland megacities have been growing faster than many coastal cities for over a decade. From 2001 to 2020, among the nine national central cities, the average annual nominal GDP growth rate of the five inland cities was as high as 12.5%, 4.1 percentage points higher than the 8.4% rate of the four coastal central cities, greatly narrowing development gaps.
High-quality growth
In the new stage of development, China’s socioeconomic growth faces more complex and severe challenges. First, domestic factor of production prices continue to rise, the population dividend is diminishing, and an aging population plus mounting pressure in environmental governance, all urgently demand a transformation of the mode of production. Under the new development philosophy, we should shift to prioritize quality instead of speed, and replace “imbalanced” development with “coordinated” development.
Next, in the last decade, due to the impact of the global economic and financial crisis and other emergencies, the export-oriented development pattern of China’s market and resources is seeing unprecedented pressure. China’s dependence on foreign trade has dropped from 64% in 2006 to about 31% in recent years.
Going forward, scientific and technological innovation should be used as the driving force to promote coordinated and green development between regions, urban and rural areas, and between man and nature, enhance the resilience of China’s economic and social development, and better share the results of development across the nation.
To start with, the development gap between cities in China is still relatively large. With prefecture-level cities as the unit of measurement, the per capita GDP of the richest cities is more than 10 times that of the poorest cities. The capital cities of many provinces are becoming increasingly important. For many years, they received resources more often than distributing them, making imbalanced and inadequate economic development within the province ever prominent.
In the meantime, nationwide, the per capita disposable income gap between urban and rural areas is still large, and there are significant differences in the quality of social services between urban and rural areas, especially medical, educational, and senior care services, which seriously hinder people’s free movement and the smooth transfer from low-income to middle- and high-income groups.
Only by improving the quality of economic development in developed areas, increasing the speed of development in underserved areas, promoting rural vitalization and urban-rural integration, and coordinating the relationship between production and ecology, can China effectively promote coordinated regional development and release long-term growth potential.
Second, the whole country should be divided into dozens of city clusters, with one or more mega cities as the economic growth centers, so that their innovation ability aggregates when technological factors are gathered, to build national and regional “innovation hubs.”
At the national level, we will strengthen the development and expansion capacity of the four national economic growth poles, namely the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Chengdu-Chongqing economic circle, and improve ecological protection in the Yellow River and Yangtze River basins. By building a national comprehensive three-dimensional transportation and communication network, China is poised to let these growth poles drive coordinated development and common prosperity.
Third, in addition to the four major economic growth poles, China has more than 20 regional urban clusters, including those along the middle reaches of the Yangtze River, in northeast China, and around the Bohai Sea. These urban agglomerations all have one or more core cities that need to be prioritized, especially in the field of applied technology. With more investment and highly-efficient applied technology, urban clusters can advance traditional industries’ technical level and management efficiency, narrow the development gap with national central cities and growth poles, and drive the development of small and medium-sized surrounding cities and rural towns.
In the end, we want to build a spatial structure that features “national economic growth poles, regional economic growth centers, and belts with villages, towns, and small to medium-sized cities,” to mobilize all the land, people across the country, and other factors of production to boost economic growth.
Finally, we should make full use of digital technologies to enhance the scientific and technological content of coordinated regional development. The internet, big data, artificial intelligence, and low-carbon technologies are not only new drivers of coordinated and high-quality regional development, but also the future of our national economy.
The digital economy has the outstanding economic characteristics of scale and scope, which is appropriate for China’s national conditions—a large population and a vast territory. Low-carbon technology and the development of new energy are inevitable choices for the harmonious coexistence of man and nature and the unification of productive, economic, social, and ecological benefits.
That said, coordinated regional development is an important means to give leverage to the digital economy and low carbon technologies, and lay a solid foundation for spatial economic geographical development, so as to achieve the great rejuvenation of the Chinese nation.
Yao Shujie is from the School of Economics at Liaoning University.
Edited by YANG XUE