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Crisis presents opportunity

(China Daily)
Updated: 2009-05-07 07:40

The western regions in China have a great opportunity to grow during the current financial crisis as they rely more on domestic demand rather than foreign trade, and stand to benefit remarkably from the government's stimulus package, says an article in Southern Metropolitan News. Excerpts:

According to the index published by the National Bureau of Statistics, the financial crisis, which has a great impact on the eastern region of China, hasn't hampered the initiatives in the western parts.

The GDP growth in the first quarter of this year in Guangdong, Zhejiang and Shanghai are merely 5.8 percent, 3.4 percent, and 3 percent respectively -- all of which are lower than the national average of 6.1 percent. In the 12 western provinces and municipalities, however, the GDP growth rates are higher than the average, except in Gansu province and the Ningxia Hui autonomous region.

In addition, in western regions, investment in the first quarter is up 46.1 percent over the same period last year, much higher than the 19.8 percent in the eastern part. Meanwhile, in the first quarter the average industrial growth of the west rose by 11.8 percent, clearly higher than the national average of 5.1%.

According to Liu Yong, an analyst with the State Council Development and Research Center, the financial crisis provides an opportunity to narrow the gap between east and west of China. The financial crisis has a less severe impact on western regions, for they are developing mainly on the basis of domestic demand, while the eastern areas suffer more due to the decline in foreign trade. The western economy's development puts emphasis on the domestic market, which conforms to the government's policy of expanding domestic demand to overcome the crisis.

Of the $586 billion stimulus package, a great part has been invested in the development of transportation in the western regions. Such initiatives have added to the positive factors in the economy of the region. The low cost and broad market of the western regions provide fertile ground for the industrial transition now underway.

(China Daily 05/07/2009 page8)