Restrict government power in regional integration

Governments should serve regional integration by cutting their powers instead of using the opportunity to expand their powers, says an article in the 21st Century Business Herald. Excerpts:

The central government has proposed building the Yangtze River economic belt, which would use the waterway as an important engine for the sustainable development of the Chinese economy.

Previous integrated development plans that promoted large-scale infrastructure construction did not fill the gap among different regions. Local protectionism and local governments’ direct interference with the market, to some extent, enlarge the differences among the regions that were to be integrated through the central government’s initiatives.

The central government should draw lessons from these failures. If there is no coordination from the central authority, this round of integration may become a new game among local governments to strive for investment and preferential policies.

Premier Li Keqiang stressed breaking administrative obstacles and building a unified and open market system featuring healthy competition.

The Chinese government should cut red tape and let the market play a decisive role in allocating resources. The central government needs to be vigilant of the tendency for local governments to expand their powers in the process of integration, otherwise regional integrated development will further split the national market.