3 - Regional Economic Development in China: Agglomeration and Relocation

Summary

Regional economic development in China has been undergoing a strategic transition from disequilibrium to coordination since 1978, the year the nation adopted the reform and opening-up policy. In the light of major changes that have taken place in the intervening years, following the nation's guidelines for regional development, the metamorphosis of relevant strategies and policies can be roughly divided into three periods: 1979–90, during which the economy developed in favour of the eastern region; 1991–98, when strategies were initiated to coordinate the economic development of the central and western region; and the post-1999 period, when strategies have come into full swing to coordinate the regional economic developments. In the Eighth Five-Year Plan published in March 1991, the Chinese government adopted coordinated regional development as a top national strategy. Afterwards, the government adopted a strategy in September 1999 to accelerate the development of western region, initiated another strategy in October 2003 to rejuvenate old industrial bases in the northeast, and issued a call in January 2004 to hasten the economic take-off of the central region, indicating that the decision to achieve equilibrium in regional economic development had entered a period of all-round implementation. From the perspectives of industrial agglomeration and relocation, this chapter takes a look at the trend of changes in China's regional economic development since the reform and opening-up.

DIVISION OF ECONOMIC REGIONS AND THEIR ECONOMIC DEVELOPMENT

China is a large developing nation with a comparatively large economic disparity among its regions. In the Sixth Five-Year Plan (1981–85), which came underway shortly after the adoption of the reform and opening-up, the government followed the old tradition to divide the country into coastal and inland regions, reflecting the difference indevelopment. Based on this traditional dichotomy, and in light of different geographic location and regional economic development levels, the Seventh Five-Year Plan (1986–90) divided the nation into three economic regions — eastern, central and western regions — to provide the government with guideline to follow when determining economic development priorities and setting up a pecking order for resource allocation.