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Development

Decades Needed to Develop China's Backward West

[Reuters. January 5, 2001.]

CHONGQING, Jan 5, 2001 -- (Reuters) To Chongqing's "stick army" - itinerant laborers who sell their muscle carrying loads on bamboo poles-China's drive to develop its backward west holds the promise of limitless profits.

"The western development campaign will help us," said one 26-year-old man, who left his rural home to carry just about anything from television sets to construction materials up and down the famous ladder-like streets of a city that slopes almost vertically towards the Yangtze River.

"If more people come to invest, then business will be better and we can carry more," he said.

But that day could be a long time coming.

China set a policy in 2000 for developing central and western regions, home to 90 percent of Chinese people who live in poverty. By making these people richer, so the theory goes, China's economy will grow on a new wave of consumer spending.

Beijing also wants to narrow the growing wealth gap between the rich coastal areas and the neglected interior.

And by improving the lives of Tibetans, Muslims and other ethnic minorities who populate the west, it hopes to quell challenges to Chinese rule.

But the program could take generations to show results, and some areas of western China, cursed by poor land and lack of resources, will never prosper. "It's certainly a task that will take decades," said Yukon Huang, country director for the World Bank in Beijing.

"There's also a limit to what this particular effort can do," he said. "In any very large country, there will be regions which are relatively speaking less developed, where incomes are lower."


CHONGQING AMONG THE WINNERS

Chongqing, which the World Bank describes as the world's largest single metropolitan area with a population of about 43 million, including some six million city residents, is one of the winners in the development drive.

Left behind in the prosperity brought by market reforms over the last 20 years, Chongqing separated from Sichuan province in 1997 to become a municipality like Beijing and Shanghai.

With the drive to develop the west, the central government has made up for years of neglect by pledging billions of dollars for massive infrastructure projects which aim to make Chongqing the transport hub of western China.

Perched above the Yangtze, Chongqing has depended traditionally on the river as a link to the commercial hub of Shanghai more than 1,500 km (900 miles) away. Chongqing snagged two of 10 big projects for western development in 2000: a $2.2 billion, 640 km (400 mile) railway line to the central city of Huaihua and a $411 million, 17 km (11 mile) light railway linking it to its southwest suburbs.

Analysts said the 10 major projects, six of them infrastructure, were a only tiny step forward for solving the transport and development woes of western China.

"The 10 projects they've announced are really Mickey Mouse," said an economist at a foreign bank. "The scope of the problem is much larger."

Like other western provinces, Chongqing is also planning a major airport expansion, improvements to its highway system and a trial forestation project. "This type of infrastructure will make life more convenient," said Ma Shulin, vice chairman of Chongqing's Development Planning Commission. "Outside investment will increase and incomes will rise."

Construction of the railway line will take five years but officials said it would open a gateway to the south, enabling farmers to move fruit, cattle and sheep to prosperous Guangdong province in two or three days. That trip is currently a hazardous five-day truck journey.


SOCIAL INFRASTRUCTURE NEGLECTED

Analysts agree western China needs the infrastructure, but say the government must diversify sources of funding beyond state investment and ensure money is not wasted on useless projects.

"Funding through the budget or banking system has been generous, but this cannot continue forever. They realize they have to bring in private money," said Huang of the World Bank.

"The government is understandably concerned about the quality of investment. If you rush forward, you will find that roads are built before their time." Some also worry the drive to build has neglected spending on health, education and environmental protection, which is needed to improve people's lives and lure more investors.

"In order to complement the investment in physical infrastructure is what we call social infrastructure," said Bruce Murray, the Asian Development Bank representative in China.

"You have to develop western China as a place where people want to invest and want to work."

Foreign investors have been slow to respond to the government's call to go west, proceeding cautiously to ensure projects are commercially viable. "We follow our customers and we follow the market. When they go, we'll go," said Christian Murck, senior country officer for Chase Manhattan Bank in Beijing.

Back on the streets of Chongqing, foot-soldiers of the 100,000 strong stick army keep a sharp eye out for work to earn their average daily keep of 10-20 yuan ($1.20-$2.40).

"Chongqing is the 'dragon's head' for western development," said one, referring to the leading role of the city. "But in terms of work environment and economic benefits, we have not seen much change so far."


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