Engines of growth move into top gear

Updated: 2012-08-24 08:25

By Shi Yongming (China Daily)

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But Second-tier cities must come up with better, faster sustainable development models to stay ahead

In 2011, China's gross domestic product grew 9.2 percent, with the western and central regions showing stronger growth than the eastern region.

It indicates that the western and central regions have started to play an important role in China's stable economic growth.

There are many underlying reasons why the western and central parts of China have grown so rapidly in recent years.

With its rich resources and industrial structure, economic development in western and central China has largely been driven by the domestic market that has been relatively unaffected by the global headwinds. This is in sharp contrast to the fortunes of the eastern region, which is dependent largely on exports.

What is more, as many western and central provinces and regions have entered the middle development stage of industrialization, the long-term accumulation effects have been brought into full play. Continuous investment by governments and companies has helped expand the industrial scale in these regions rapidly.

As major cities and city clusters have played an increasingly important role in regional development, governments in the central region have also taken various measures to stimulate these regions' further development, such as introducing foreign investment, industrial transformation, accelerating infrastructure construction, developing new industries and strengthening city functions.

All these efforts have enhanced the influence of major cities and city clusters in western and central China, and also led to the emergence of some major cross-regional cities.

At present, there are lots of second-tier cities in the western and central China that are developing at a high growth rate, even faster than first-tier cities. They have become "the second engine" of regional economic development of China.

For example, in Changsha, capital of Hunan province, the total volume and growth rate of its GDP ranked seventh in provincial capital cities of China last year.

Another example is Guiyang, capital of Guizhou province. Although its GDP is not huge, its growth rate ranked first in all provincial capital cities last year.

With its vast regions and large population, China is considered as one of the fastest-growing countries. It is hard to imagine that such a large economy relies only on the support from a few first-tier cities to drive economic development nationwide, and there must be an integrated city system to stimulate the nation's further growth.

Some first-tier cities in eastern China are facing an arduous task in industrial transformation. As production and living costs rise, more and more investors and residents are turning to second-tier cities, thereby creating more opportunities for these cities to develop further.

As for the major cities in western and central China, they are also confronted with this challenge: their current economic growth largely relies on energy and resources, which are limited.

The real differences between first-tier cities and second-tier cities lie in the development stage of comprehensive strength, competitiveness, sustainability and the ability to attract investment.

Therefore, whether second-tier cities can grow fast enough to become the new engine of the nation's economic development relies on whether they can truly establish a better and faster sustainable development model.

Major cities in western and central China should accelerate the transformation of their development models, making the improvement in both production quantity and quality as the priority, optimizing the environment of innovation and business development, and establishing city clusters closely connected with first-tier cities.

As China's second-tier cities enjoy growing strategic importance, these cities with increasing comprehensive strength can become the new engines of China's economic growth.

The author is the director of the Regional Economic Research Institute at Hunan Academy of Social Sciences.

(China Daily 08/24/2012 page7)