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Growth push for six provinces to focus on manufacturing, green development China's decision to provide more impetus to the growth of its central
region will help the nation sustain high-quality development, narrow
the regional divide and facilitate the economy's transformation in a
greener and low-carbon direction, according to analysts. A meeting of the Political Bureau of the Communist Party of China
Central Committee, the Party's core leadership, reviewed on March 30 a
policy document on promoting the high-quality development of the
country's central region in the new era. The meeting, presided over by Xi Jinping, general secretary of the
CPC Central Committee, urged the region to develop a modern industry
system underpinned by an advanced manufacturing sector, strive for green
development, work toward high-quality opening-up, and enable more
coordinated growth between urban and rural areas. It was the latest move from the nation's top leadership to empower
the growth of the region, which comprises Anhui, Henan, Jiangxi, Shanxi,
Hunan and Hubei provinces. Chen Weidong, head of the research institute of Bank of China, said
the meeting further clarified the direction of the central region in
future economic growth, with the region being an important pillar to
sustain the nation's medium-high growth rate. The central region's share of overall national GDP has risen from 18.8 percent in 2005 to 22.2 percent in 2019, he noted. The COVID-19 pandemic, which hit the central region hard last year,
and Hubei province in particular, took its toll on the region's growth
last year. According to the National Bureau of Statistics, the central region's
economy expanded 1.3 percent year-on-year, which was below the national
average of 2.2 percent. "With the pandemic effectively put under control, the trend for the
region's economic upgrading, transformation and quick growth will not be
altered. It will continue to be an important regional powerhouse for
China's economic growth," Chen said. China first outlined a road map to spur the growth of the central
region in a policy document jointly issued in 2006 by the CPC Central
Committee and the State Council. The National Development and Reform Commission issued a five-year
blueprint to promote the rise of the central region in 2016, which made
clear the strategic orientation of the region as a center for advanced
manufacturing, a key area for the new type of urbanization, the core
area for the development of modern agriculture, the demonstration zone
for ecological civilization and an important support area for all-around
opening up. At a symposium he presided over during an inspection tour of Jiangxi
province in May 2019, Xi outlined measures from eight aspects, including
promoting the high-quality development of the manufacturing sector,
improving independent innovation capacity in key areas and enhancing the
business climate. The measures stressed by Xi at the meeting were focal points in the nation's 14th Five-Year Plan (2021-25). Narrowing gap Chen, from the Bank of China research institute, highlighted the
significance of carrying forward the region's growth in narrowing the
gap among different areas, building a national unified market and
fostering a new development paradigm, saying that the region is
competitive in terms of both population and its strength in science and
technology. The region's population, which accounts for 26.6 percent of the
national total, means it will be an important part of the overall
domestic market. "Thus the quicker rise of the central region will
facilitate the development of a strong domestic market," he said. He added that the rise of the central region will be evident from
aspects such as the upgrading of industries, green development and
high-level opening-up. The quicker rise of the central region will help build a new growth
engine, promote coordinated regional development and offer strong
impetus to high-quality economic growth and the "dual circulation
"development paradigm, in which the domestic market is the mainstay and
the domestic and foreign markets reinforce each other, he added. Other analysts have hailed the significance of decisions adopted at
the meeting on March 30, which included steps to accelerate the
development of modern infrastructure and logistics systems in the
central region and to follow a new path of green and low-carbon
development and step up the concentrated use of energy resources. Tommy Wu, lead economist at Oxford Economics, a think tank in the
United Kingdom, said the development of modern infrastructure and
logistic systems in the central region would boost productivity in the
region and could help attract and facilitate the expansion of various
industrial and service sectors. "As production costs increase in the coastal regions, more
enterprises will be willing to move part of their operations inland to
take advantage of lower production costs," he said. "But these regions need to equip themselves first, with the right
infrastructure to capitalize on this future trend. Modernizing
infrastructure and logistic systems is the right formula." "For China to advance from a middle-income country toward a high-income country, no regions should be left behind," he added. The growing attractiveness of the central region to businesses has also directly benefited some logistics service providers. Tang Na, general manager of Sinotrans Logistics Central China Ltd, a
courier service provider based in Hefei, Anhui province, said the
region's increasingly robust manufacturing sector has been bringing more
opportunities for logistics companies. The company's business has been expanding consistently, with more
high-end products including cars and intelligent home appliances
reaching overseas markets with the company's service, he said. Wang Han, chief economist at the brokerage Industrial Securities,
said the potential for the upgrading of industry chains, the development
of green industries and the use of the latest technologies is immense
in the central region compared with eastern areas, due to its relatively
low level of industrialization. However, a pressing challenge for policymakers is to overturn the
trend of increasing outflow of talent from the region to coastal areas,
as the competition for talent will be the key to development of a
cutting-edge manufacturing sector, he said. New opportunities Chen, from the Bank of China institute, said the Belt and Road
Initiative has created new room and opportunities for the central region
to expand opening-up, which has offered new impetus to the growth of
the region. So far, the State Council has given the green light to four of the
six provincial areas in the central region to establish pilot free trade
zones as part of broader steps to expand the region's opening-up. Chery Holding Group, an automaker based in Wuhu, Anhui, has been one
of the largest beneficiaries of the enhanced opening-up policy. The company has been exploring two-way trade, a model through which
it exports vehicles overseas before getting other commodities－instead of
currency－with equivalent value imported to China, since 2019. Wang Zhibin, who is in charge of Chery's cross-border e-commerce
business, said the group recorded two-way trade volume of about 900
million yuan ($137 million) last year, and the policies of the pilot FTZ
could enable the company to build up its two-way trade platform to
serve more of the province's exporters and importers and help local
manufacturers to expand further. China's commitment to peak its carbon emissions by 2030 and attain
carbon neutrality by 2060 is also set to usher in systemic and
far-reaching reform, with the central region set to play a key role,
some analysts said. Wu, the economist, said that the progress of using green energy will
probably be slower in the central region than in coastal regions because
coal energy is cheaper, given the proximity to resources. "But I can see that there are still opportunities for the use of
cleaner, more efficient coal technology as China gains traction in
launching a national carbon market," he said.
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