DATE=3/9/2000
TYPE=BACKGROUND REPORT
TITLE=CHINA-HINTERLAND
NUMBER=5-45601
BYLINE=ROGER WILKISON
DATELINE=BEIJING
CONTENT=
VOICED AT:
INTRO: Twenty years after China's late leader Deng
Xiaoping launched economic reforms that have greatly
improved living standards in the country's coastal
areas, his successors say it is time to spread the
prosperity to China's vast and impoverished western
region. VOA correspondent Roger Wilkison reports the
Chinese government says developing the west is
important for national economic growth, poverty
eradication and social stability, but it has so far
been vague about how it plans to attract the billions
of dollars needed to make the project succeed.
TEXT: The plan to boost growth in the hinterland is
one of the main issues before the annual session of
the National People's Congress -- China's legislature.
Many of the nearly three thousand legislators come
from landlocked provinces that have not benefited from
China's dynamic growth over the past twenty years.
The income gap between the hinterland and the coast is
growing, and this is breeding resentment in poorer
areas.
Luciano Bay, who heads the Italy-China Chamber of
Commerce in Beijing, says investment -- both foreign
and domestic -- has been concentrated for too long in
the prosperous coastal areas and big cities.
//BAY ACTUALITY//
It is essential that investments be redirected to the
western provinces. First of all to sustain the growth
of the economy, but most importantly to reduce the gap
between the individual income of people living in
Shanghai or Beijing and people living in Chengdu or in
a small town in Gansu province.
//END ACTUALITY//
In 1998, per capita gross domestic product for
Shanghai -- China's richest area -- was 34-hundred
dollars, whereas in arid Gansu province it was just
four hundred dollars.
Though Mr. Bay and other foreign business leaders say
they have so far not been pressured by the government
to invest in the hinterland, China's top economic
planner -- Zeng Peiyan -- says the government plans to
rely on what he calls market forces to speed up
development there. Mr. Zeng -- speaking through an
interpreter -- says western China has several
advantages over the East.
//INTERPRETER ACTUALITY//
The advantage of the west is that the population is
huge and the land is cheap and the resources are
abundant. The eastern part of China, especially the
coastal areas, are very crowded, and the land price
there is more and more expensive. And also the labor
cost is getting higher and higher. And the markets
there are getting saturated.
//END ACTUALITY//
Foreign investors have largely shunned China's
landlocked western and central provinces. And despite
Mr. Zeng's upbeat touting of the region as a good
place to do business, Jeanne-Marie Gescher -- the head
of the British Chamber of Commerce in China -- says
she still has doubts about the feasibility of
investing there.
//GESCHER ACTUALITY//
We are supportive of expanding into the hinterland.
The difficulty is that, from a commercial perspective,
the fundamentals have got to be there. And I'm not
sure that a commercial case has been made up for
investment in the hinterland as a whole.
//END ACTUALITY//
Ms. Gescher says some local governments in the
hinterland are offering tax preferences for foreign
investors. But she says the central government has not
yet explained whether investments in the west will get
a reasonable return.
Ernst Behrens, the head of the German Chamber of
Commerce in China says the prime requirement for
investors is infrastructure, which is virtually non-
existent in the 10 interior provinces targeted by the
government plan.
//BEHRENS ACTUALITY//
The government has to install a proper infrastructure
because business is following infrastructure. So we
need to have transportation. We need to have energy.
We need to have communication in those areas. And
this may spur investment in these regions. If the
market is difficult to access because of non-existing
infrastructure, it will be very difficult.
//END ACTUALITY//
The government says it will invest up to 400 billion
dollars in building or improving airports, highways
and railroads in the hinterland. It also pledges to
reverse the environmental destruction in the region
and says priority will be given to water conservation
projects. And it says it will build pipelines to
transport the west's abundant natural gas to the
energy-guzzling coast.
Still, potential investors express wariness about what
one calls a "build it and they will come" approach to
infrastructure development. Even Mr. Zeng -- the top
government planner -- admits it will take a long time
before the hinterland can catch up with the rest of
China.
//INTERPRETER ACTUALITY//
The development of the west is a very tough job, and
also it is a long-term job. It cannot be completed
just within one five-year plan or several five-year
plan periods. It will be completed through the great
efforts of several generations.
//END ACTUALITY//
The targeted region encompasses more than half of
China's landmass and one quarter of its one-point-
three billion people. Improving the living standards
of the poorest of China's poor and turning them into
consumers is one of the biggest challenges the
government faces in this century. (signed)
NEB/RW/GC/FC
09-Mar-2000 03:50 AM EDT (09-Mar-2000 0850 UTC)
NNNN
Source: Voice of America
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