Central region losing ground economically
Six provinces underperform other zones, says think-tank
China's central region has the most sluggish economy in the country, not only lagging far behind prosperous coastal areas but also losing ground to western provinces, according to a report released yesterday by a top national think-tank.
The provinces of Henan , Shanxi , Hubei , Hunan , Jiangxi and Anhui had a relatively closed economy and its competitive position in the national development strategy was fast deteriorating, the report by the Chinese Academy of Social Sciences said.
'The central region exhibits a low degree of economic openness, not even measuring up to 20 per cent of the national average level,' it said.
There is often a strong link between economic openness, which measures the degree of interaction with the outside world, and growth. This usually takes into account the ratio of imports and exports to gross domestic product, foreign direct investment and foreign reserve levels.
The report, the first of its kind to assess the economic development of China's hinterlands, provides further proof of the country's glaring regional imbalance.
It followed Monday's release of a research paper by the academy which showed the income gap between poorer, remote areas and more affluent coastal ones could reach as high as 18 times.
Highlighting the scale of the task before the central and regional governments, the report said the six provinces were home to nearly a third of China's population but produced only a quarter of its GDP.
An initiative to promote the central region, known as 'the rise of central China' and in the same spirit as the projects to develop western regions and rejuvenate the northeast rust belt, was launched two years ago.
The average GDP of the central provinces, according to the report, increased by 15.5 per cent last year, compared with 22.7 per cent in the north coastal Bohai Rim area, and 35.3 per cent in the Pearl River Delta.
Except for 2004, when they scored a better growth rate than most of the other regional economic zones, the six central provinces had 'grossly underperformed' the Bohai Rim, Yangtze Delta, Pearl Delta and western regions during the past five years.
Rural areas made the difference between the central and coastal areas. Henan has more counties and villages than any other province in the country, but only two of them broke into the top 100 in the country, while the southeastern province of Zhejiang has 30.
Farmers in the six central provinces have seen their incomes rise only by an average of 2.73 per cent in recent years, about two-thirds of the national average increase.
