Beijing urges provinces to unite to boost economic growth

The central Government is calling for better co-operation among provinces and joint efforts to boost domestic consumption.

The State Council had instructed economic departments to map out measures to boost inter-province co-operation, a government source said.

'The authorities want to have more resources to manipulate - land, minerals and other resources - as even backward areas join the craze for development,' the source said.

Sources from the State Statistics Bureau said preliminary co-operation among provinces in recent years had started to bear fruit in sustaining China's economic momentum. 'Despite the slowdown in the world economy, China still achieved 7.9 per cent growth in gross domestic product [GDP] in the first half of the year, partly due to such co-operation,' a bureau source said.

The GDP growth was confirmed in a recent report by the Asian Development Bank.

'Over the past two years, China has surprised the world with a seven to eight per cent growth rate in GDP despite its negative increment in net export. This was mainly the result of the macro policy of expanding domestic demand and the emerging economic co-operation between provinces,' the bank report said.

Economists say large-scale provincial interaction, better use of scarce resources and an increased flow of products among provinces at a 'brotherly price' has helped China to resist the worldwide recession.

At the peak of regionalism, Chinese leaders were alarmed to see cities and provinces looking down their noses at one another and implementing policies to protect their resources from their neighbours.

One of the strangest regional competitions was the construction of mega-projects such as airports and opera houses to show off provinces' economic power.

This resulted in repetition of projects and wasted resources. Eastern and southern provinces initially were reluctant to help when the State Council called on the eastern provinces to participate in the development of the economically backward western regions two years ago.

For some cadres, the development of local economies, which brings tangible benefits such as wealth to close relatives and business associates, is more important than heeding Beijing's call to promote national unity.