Grand revival plan brings tired groans from sceptics

PUBLISHED : Thursday, 09 March, 2000, 12:00am
UPDATED : Thursday, 09 March, 2000, 12:00am

The party's grand 'revive the west' programme has been greeted with suppressed groans by many experts all too familiar with the record of pouring money into white elephants.

'We should not repeat what we did in the past with the Third Line. We should adhere to the principles of the market economy,' economist Xiao Zhoujie urged in a delegates' discussion group.

This is the party's third or fourth grand plan to develop the interior. In the 1950s, millions of prisoners and demobilised troops were settled in penal colonies in Xinjiang, Qinghai and Tibet to build roads, railways, mines and farms in the newly conquered territories.

The biggest drive was the Third Line launched in the 1960s which nearly bankrupted the economy. About 20 million people and factories were moved from the coast to build hundreds of giant military and industrial projects in hitherto inaccessible mountain valleys.

Chairman Mao was preparing the party to survive a nuclear Armageddon.

The west is crushed by the weight of supporting too many existing unprofitable and ill-conceived factories, steel plants and hydro-electric schemes.

Many of them were defence-related projects and now that the PLA has been ordered to divest itself of its commercial ties, all the unprofitable ones will have to be subsidised by local governments.

'The task is very difficult because there are so many heavy industries and state-owned enterprises in the west. What we must do is to adjust the enterprises in a reasonable way,' economist Wu Jinglian pleaded in the discussion group.

'Too many local government officials are devoted to the idea of a planned economy. The important thing is that they should change their way of thinking, otherwise this will negatively influence the party's strategic development policies,' fretted another delegate, Zhou Tienong.

Most statistical evidence points to the need for fewer unnecessary government projects, more private enterprise and less state interference in areas other than education.

The country's first national agricultural census published in 1998 found there were five times as many peasants engaged in private ventures in eastern than in western China and four times as many individual household enterprises. Thirty-three per cent were engaged in non-agricultural production in coastal areas, compared with 15 per cent in the east.

The latest education survey also shows how far the western regions lag behind the rest of the country.

Spending on education per student in the west is 60 per cent that in the coastal regions and in recent years spending has actually declined, according to the State Education Commission.

The central Government is not proposing to spend any more money on either problems but to plough more money into giant development projects which many fear will only result in enriching a minority of officials.

'What people in western provinces want is to send more people to Beijing, to be close to ministries and put their hands on more money and resources,' economist Mr Wu warned. 'This is not a good thing.' Beijing economics professor Shang Dewen warned: 'All those projects need huge amounts of money, foreign loans and investment. The Government will certainly spend a lot of money and corruption will be a big problem.' Western China is already full of such projects, which have sucked in huge amounts of foreign loans for no apparent benefit to the people living there.

The biggest case is the Three Gorges Dam, where the Government raised the money to import equipment but not to resettle nearly two million people. And in the meantime tens of millions of yuan disappeared into the pockets of local officials.

The biggest foreign invested dam project, the Ertan Dam in Western Sichuan, is losing money because there is no call for its electricity. Many other provinces are lumbered with equally disappointing mega-dam projects.

After the World Bank removed China from the list of poorest countries last year, Chinese officials have been racking their brains to think up new ways to attract the kind of billion-dollar low-interest projects which the World Bank loves.

On the cards are big anti-poverty projects involving the relocation of a millions of people, like the controversial project involving Tibetans in Qinghai which was suspended last year.