As Some Countries have been banging the drum of anti-globalisation amid the pandemic, certain politicians may take the opportunity to disrupt Global Industrial & Supply Chains.
To beef up the development of its western regions under such circumstances, China could further expand its domestic market and ensure economic security through the internal restructuring of industrial chains.
China recently issued a guideline on advancing the development of its western regions to promote coordinated regional development. Against the backdrop of the increasingly complex global economy, that could generate momentum to boost both the domestic & global economies.
Export Enterprises in China’s eastern regions have been suffering from the fallout of the pandemic, while western provinces and regions, by contrast, have shown strong resilience and reported GDP growth higher than the national level in the first quarter.
Western China’s GDP had grown to 18.4 trillion yuan ($2.6 trillion) in 2018 from 1.67 trillion yuan when the West Development Strategy was initiated in 1999. China’s western regions include Southwest China’s Tibet Autonomous Region, and the Guizhou, Yunnan and Sichuan Provinces, all of which have been achieving fast growth with major infrastructure shaping up.
The imbalance between eastern and western regions of China has been eased, and western regions are now entering a phase of upgrading growth from high-speed to high-quality.
The western development campaign, in the short term, can offer a favourable foothold for China’s current tasks of stabilising the country’s employment and market, among others.
In the long term, it also offers a new growth point for China’s economy amid the complex global economic environment following the outbreak of COVID-19. The development of China’s western regions can weigh more heavily on establishing and taking over parts of industrial and supply chains from eastern regions.
With advantages in China’s sound industrial chains and complete industrial sectors, the transfer from east to west could be based on the comprehensive cultivation of the industrial chains rather than the relocation of any individual firm.
Moreover, it is vital that western regions improve their business environments and expand their opening-up. The Promotion of the Belt & Road Initiative has offered a great opportunity for opening-up, as well as for China-Europe freight trains and improved cooperative relations between China and the Association of Southeast Asian Nations (ASEAN).
The newly enhanced western development strategy will not only boost domestic demand, but will also bring in increased foreign investment.
Western regions should speed up their construction of public infrastructure and basic services to catch up with the east of the country, which would bring huge social and economic momentum.
It should be stressed that natural ecological protection will still be an important task during the development, as China’s western regions cover a large area with rich geographical structures which are valuable assets for China and have been well protected during previous development.
The Western Regions could develop into a new economic growth pole, a new backbone of China’s domestic market expansion, and will also help promote the national and global economies.