Alert over narrowing wealth gap

A GROUP of influential experts has warned Beijing against squeezing the Special Economic Zones (SEZs) for the purpose of narrowing the gap between the rich coastal area and the impoverished west.

For the second time in a month, the nation's liberal economists and cadres have converged on Hainan Island, to give support to radical market reforms.

The semi-official China News Service (CNS) reported yesterday that 80 academics and officials met in Haikou for an international conference on the development of the SEZs.

Sources said economists who had worked for former party chiefs Hu Yaobang and Zhao Ziyang defended the zones' entitlement to preferential policies.

Last year a coalition of central planners in Beijing and regional chiefs from central and western areas had argued that special tax and other policies for the coast should be abrogated.

They claimed that as a result of such policies, the zones had 'exploited' the heartland regions, and the disparity between the coast and the heartland had widened.


Such views were disputed by senior economist Yu Guangyuan, who advised both Mr Hu and Mr Zhao.

'We must overcome a misconception, that is, raising the issue of east-west disparity to an inappropriately high plane,' CNS quoted Mr Yu as saying. 'The SEZs have helped, not suppressed, the development of heartland regions.' CNS quoted other participants as saying only with the further development of the zones could the regional gap be narrowed.

They added that the SEZs should make more experiments in 'internationalising' the Chinese economy and in promoting a market system. Other academics suggested political reforms, including 'the construction of democracy and the legal system', be expedited in the zones.

Economists in Beijing said yesterday the leadership was undecided about the future direction of the zones. They said because of the aggressive lobbying by cadres from the central and western areas, one faction favoured 'shifting' the policies enjoyed by the zones westwards.


Conservative ideologues and bureaucrats have also argued that the zones had tried to use money - contributions to poorer regions - to maintain their 'special privileges'.

Liberal leaders of the party, such as National People's Congress Vice-Chairman Tian Jiyun, however, have tried to bolster their faction by giving support to the coastal provinces.


Another major meeting on SEZ policy is scheduled for Xiamen, Fujian province, in June.

Fujian officials have complained that Xiamen has not been given policies promised it by patriarch Deng Xiaoping.

Last month, a group of liberal economists met in Haikou to criticise apparent efforts by Beijing to re-centralise agrarian policy.