Hostname: page-component-cd9895bd7-jkksz Total loading time: 0 Render date: 2024-12-23T07:52:40.390Z Has data issue: false hasContentIssue false

Development, the Second Time Around: The Political Logic of Developing Western China

Published online by Cambridge University Press:  24 March 2016

Extract

The Great Development of the West is no more than grand conferences held in the west (Xibu Dakaifa zhishi xibu dakaihui).

State Council officials in charge of developing the west

On the surface, the Great Development of the West (GDW, Xibu Dakaifa) campaign seems like a classic maneuver by a developmental state to bolster the growth of an underdeveloped region. Even in 2002, GDP per capita in western China, which includes the provinces of Xinjiang, Tibet, Ningxia, Gansu, Shaanxi, Sichuan, Chongqing, Qinghai, Yunnan, and Guizhou, remained at U.S.$666, or just more than half of the national average (see Table 1). The poorest province in China, Guizhou, had a GDP per capita of only U.S.$375, roughly equivalent to Haiti's GDP per capita in 1999. The effort to develop western China, according to the official rhetoric, was aimed at shifting western China's developmental trajectory closer to that of the rest of China, thus decreasing regional inequality and bolstering overall growth.

Type
Articles
Copyright
Copyright © East Asia Institute 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Notes

I would like to thank Byung-Kook Kim, Stephan Haggard, Lu Xiaobo, Andrew Macintyre, Yoshihide Soeya, Ito Peng, Joseph Wong, and Eric Thun for valuable comments and suggestions on the draft. Of course, all mistakes are my own.Google Scholar

1. Hua, Zhong and Li, Yixue, “Jiada woguo xibu diqu liyong waizi de lidu” [Increase the extent to which western regions use foreign capital], Hongguan Jingji guanli (Macroeconomic Management), no. 1 (2004).Google Scholar

2. The GDW campaign extends to Guangxi and Neimenggu as well, which are geographically not in western China. It also benefits minority regions scattered in Hunan, Hubei, and Jilin. See Develop the West Office of the State Council, Guanyu xibu dakaifa ruogan zhengce cushi de shishi yijian [Opinion concerning the implementation of certain policies related to the Great Development of the West] (Develop the West Office of the State Council, 2001 [cited March 12, 2004]); available at www.chinawest.gov.cn/chinese/asp/start.asp?id=w.Google Scholar

3. World Bank, The World Development Indicators, 2000 [CD-ROM] (World Bank, 2001 [cited October 15, 2002]).Google Scholar

4. Jiang Zemin was the secretary-general of the Communist Party at the time, while Zhu Rongji was premier of China. They held the highest positions in the party and the state respectively.Google Scholar

5. Zhu, Rongji, “Tongyi sixiang, mingque renwu, bushi shiji shishi xibu diqu dakaifa zhanlue” [Unite our thinking, clarify our mission, and do not lose the opportunity to implement the strategy of developing the west]. In Central Committee, ed., Shiwu Da Yilai Zhongyao Wenxian Xuanbian-Zhong [A selection of important documents since the Fifteenth Party Congress, vol. 2], Document Research Center of the Chinese Communist Party (Beijing: People's Publisher, 2001).Google Scholar

6. Hu, Angang, Wang, Shaoguang, and Kang, Xiaoguang, Zhongguo Diqu Chaju Baogao [Regional disparities in China] (Shenyang: Liaoning People's Publisher, 1995); Yang, Dali L., Beyond Beijing: Liberalization and the Regions in China (New York: Routledge, 1997).Google Scholar

7. Zhu, , “Tongyi Sixiang.” Google Scholar

8. Yang, , Beyond Beijing. Google Scholar

9. Cheung, Tai Ming, “Guarding China's Domestic Front Line: The People's Armed Police and China's Stability,” The China Quarterly , no. 146 (1996).Google Scholar

10. Becquelin, Nicholas, “Xinjiang in the Nineties,” The China Journal , no. 44 (2000).CrossRefGoogle Scholar

11. Editors, , “Xibu Dakaifa yao ganjin gan qilai” [We must hurry to launch the Great Development of the West campaign], Price and Market , no. 11 (1999).Google Scholar

12. Zhang, Guoning, “Zhouxiang Xibu Dakaifa de haojiao” [Play loudly the slogan of Developing the West], Baokan Zhiyou [Companion to Newspapers and Magazines] 99, no. 6 (1999).Google Scholar

13. Xinhua News Agency, “Zhu Rongji Urges Faster Development in Western PRC,” Beijing Xinhua , October 31, 1999.Google Scholar

14. Zhu, , “Tongyi Sixiang.” Google Scholar

15. Wong, Christine, Heady, Christopher, and Woo, Wing Thye, Fiscal Management and Economic Reform in the People's Republic of China (Hong Kong: Oxford University Press, 1995).Google Scholar

16. Yang, , Beyond Beijing , p. 66.Google Scholar

17. At that time, Jiang was sure that Hu Jintao would succeed him, since he was handpicked by Deng Xiaoping. Wen Jiabao was the most likely successor to Zhu Rongji at the time, although he was by no means the only candidate.Google Scholar

18. Evans, Peter B., Embedded Autonomy: States and Industrial Transformation (Princeton, N.J.: Princeton University Press, 1995); Johnson, Chalmers, Miti and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975 (Stanford, Calif.: Stanford University Press, 1982); Wade, Robert, Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization (Princeton, N.J.: Princeton University Press, 1990).CrossRefGoogle Scholar

19. Informal veto points can come during the proposal stage of a policy.Google Scholar

20. Naughton, Barry, Growing Out of the Plan: Chinese Economic Reform, 1978–1993 (New York: Cambridge University Press, 1996); Shirk, Susan, The Political Logic of Economic Reform in China (Berkeley: University of California Press, 1993).Google Scholar

21. Wade, , Governing the Market. Google Scholar

22. Cheng, Tun-jen, “Guarding the Commanding Heights: The State as Banker in Taiwan.” In Haggard, Stephan, Lee, Chung H., and Maxfield, Sylvia, eds., The Politics of Finance in Developing Countries (Ithaca: Cornell University Press, 1993); Choi, Byung-sun, “Financial Policy and Big Business in Korea: The Perils of Financial Regulation.” In Haggard, Stephan, Lee, Chung H., and Maxfield, Sylvia, eds., The Politics of Finance in Developing Countries (Ithaca: Cornell University Press, 1993); Lardy, Nicolas, China's Unfinished Economic Reform (Washington, D.C.: Brookings Institution, 1998); Zysman, John, Governments, Markets, and Growth: Financial Systems and the Politics of Industrial Change (Ithaca: Cornell University Press, 1983).Google Scholar

23. Lardy, , China's Unfinished Economic Reform. Google Scholar

24. Wade, , Governing the Market. Google Scholar

25. A prime example of this is the private sector's desire to have privately owned banks operating in eastern China. Despite setting up reputable private banks in several instances, the central government has repeatedly cracked down on them. See Tsai, Kellee S., Back-Alley Banking: Private Entrepreneurs in China (Ithaca: Cornell University Press, 2002).Google Scholar

26. Mao launched a massive industrialization program in inland China in the mid-1960s to maintain industrial production in case the United States or the Soviet Union invaded the coastal provinces. The project, called the Third Front campaign, involved massive state subsidies and waste and produced myriad SOEs that continue to rely on central subsidies today.Google Scholar

27. Zhu, , “Tongyi Sixiang.” Google Scholar

28. The politicized nature of China's top bureaucrats is not the product of a Leninist party per se. After all, Taiwan also had a Leninist party structure. It is rather the product of a prolonged revolutionary struggle where generalists specialized in economic affairs toward the end of the civil war. Thus, from the outset, some Chinese bureaucrats had as much political prestige as their counterparts in charge of the party. See Huang, Jing, Factionalism in Chinese Communist Politics (New York: Cambridge University Press, 2000), p. 139.Google Scholar

29. Evans, , Embedded Autonomy , p. 52.Google Scholar

30. Cheng, , “Guarding the Commanding Heights.” Google Scholar

31. For a discussion on the information asymmetry between bureaucrats and politicians, see Calvert, Randall L., McCubbins, Mathew D., and Weingast, Barry, “A Theory of Political Control and Agency Discretion,” American Journal of Political Science 33, no. 3 (1989); Weingast, Barry and Banks, Jeffrey, “The Political Control of Bureaucracies under Asymmetric Information,” American Journal of Political Science 36, no. 2 (1992).CrossRefGoogle Scholar

32. Nathan, Andrew and Tsai, Kellee, “Factionalism: A New Institutionist Restatement,” China Journal , no. 34 (1995); Pye, Lucian, “Factions and the Politics of Guanxi: Paradoxes in Chinese Administrative and Political Behavior,” The China Journal 34 (1995).Google Scholar

33. Dittmer, Lowell, “Chinese Informal Politics,” China Journal 34 (1995); Nathan, Andrew, “A Factionalism Model for CCP Politics,” The China Quarterly 53 (1973); Nathan and Tsai, “Factionalism.” Google Scholar

34. Huang, , Factionalism in Chinese Communist Politics , p. 5.Google Scholar

35. Interview in the United States, May 2, 2002. The exact location is not disclosed to protect the interviewee's identity.Google Scholar

36. Interviews in Beijing: October 10, 2000, May 14, 2001, June 23, 2001; in the United States, May 2, 2002.Google Scholar

37. Although both Hu Yaobang and Zhao Ziyang were removed for tolerating “bourgeois liberal” tendencies in the party, they were also blamed for pursuing reckless economic policies during their tenures. Zhao particularly was blamed for the high inflation that took place in 1988. See Baum, Richard, “The Road to Tiananmen: Chinese Politics in the 1980s.” In MacFarquhar, Roderick, ed., The Politics of China: The Eras of Mao and Deng (New York: Cambridge University Press, 1997).Google Scholar

38. Shih, Victor, “Dealing with Non-Performing Loans: Political Constraints and Financial Policies in China,” The China Quarterly (forthcoming).Google Scholar

39. Zhu, Rongji, “Renzhen shiqie shiwu da jingshen; jiji luoshi guanyu jingji tizhi gaige de ge xiang buchu” [Conscientiously realize the spirit of the Fifteenth Party Congress; actively implement the various arrangements concerning economic structure reform]. In Xin shiqi jingji tizhi gaige zhongyao wenxian xuanbian [A selection of important documents for economic structural reform in the new period], ed. Document Research Center of the Chinese Communist Party Central Committee [Zhonggong Zhongyang Wenxian Yanjiushi] (Beijing: Central Document Publisher, 1998).Google Scholar

40. Interview in Beijing, November 24, 2000.Google Scholar

41. Zhu, , “Tongyi Sixiang.” Google Scholar

42. State Council, Guanyu shishi xibu da kaifa ruogan zhengce cushi de tongzhi [Notice concerning implementing certain major policies for the Great Development of the West] (Develop the West Office of the State Council, 2000 [cited March 12, 2004]); available at www.chinawest.gov.cn/chinese/asp/start.asp?id=w.Google Scholar

43. Zhan, Xiangyang, Lun zhongguo buliang zhaiquan zhaiwu de huajie [On the dissolution of bad debt and bad debt obligations in China] (Beijing: China Financial, 2000).Google Scholar

44. “A Summary of Policies Implemented by Relevant Ministries and Commissions in the State Councils toward the Great Development of the West [Guowuyuan youguan buwei dui Xibu Dakaifa dezhengcecushi huibian],” Financial Research Report [Jinrong Yanjiu Baogao] no. 5 (2000).Google Scholar

45. State Council, Guanyu Shishi. Google Scholar

46. Bureau of Economic Prediction of the State Information Center, “Xibu Dakaifa ying zhuazhu zhongdian fahui youshi” [Development of the West should grasp the point to let shine the advantages], Caijing Kuaixun [Headlines of Finance and Economics] 2000, no. 17 (2000).Google Scholar

47. Park, Albert, et al., “Distributional Consequences of Reforming Local Public Finance in China,” China Quarterly 147, no. 9 (1996).CrossRefGoogle Scholar

48. Develop the West Office of the State Council, Guanyu Xibu Dakaifa tuogan zhengce cushi de shishi yijian [Opinion concerning the implementation of certain policies related to the Great Development of the West].Google Scholar

49. The State Development Bank financed 30 percent of the construction projects for the GDW campaign, and the main method through which it raised funds was bond issuance. See Bureau of Economic Prediction of the State Information Center, “Xibu Dakaifa”; Editorial Committee, “Jinrong jiang dali zhichi xibu kaifang lidu” [The financial industry will whole-heartedly support the force for the Development of the West], Jingji Da Cankao [The Great Reference of Economics], no. 7 (2000); Kai, Yan, “Kaifa Hang Wei Xibu Dakaifa zhuli” [State Development Bank helps the Great Development of the West]. In Development Research Center of the State Council, ed., Regional Economic Situation (Beijing: Development Research Center of the State Council, 2003).Google Scholar

50. Bureau of Economic Prediction of the State Information Center, “Jinrong jiang cong liufangmian Zhichi Xibu” [Finance will support Development of the West in six ways], Caijing Kuaixun [Headlines of Finance and Economics], no. 17 (2000).Google Scholar

51. Ibid.Google Scholar

52. “Dali zhichi guozhai xiangmu jiangshe sichuan jinrong jigou jiji fafang peitao daikuan” [In order to support construction projects financed by bonds, financial institutions in Sichuan actively lend out supplementary funds], Jinrong Shibao [Financial Times], July 22, 2003.Google Scholar

53. Research Team of the CASS Western Development Research Center, “Xibu kaifa zongti guihua zhongqi pinggu” [A mid-term evaluation of the overall plan to develop the west], Jingji Yanjiu Cankao [The Reference for Economic Research], no. 78 (2003).Google Scholar

54. Division of Statistics of People's Bank of China, China Financial Statistics: 1997–1999 [Zhongguo Jinrong Tongji: 1997–1999] (Beijing: China Financial, 2000).Google Scholar

55. Han, Qiang, “Yinqi gaige de fei junhengxing yu yinhang buliang zichan de xingcheng” [The asymmetry in banking and enterprise reform and the formation of bank non-performing assets], Jinrong Cankao [Financial Reference], no. 6 (2000).Google Scholar

56. Interviews in Beijing, October 27, 2000, November 10, 2000, November 27, 2000, and January 3, 2001.Google Scholar

57. Kai, , “Kaifa Hang.” Google Scholar

58. Develop the West Office of the State Council, Guanyu Xibu. Google Scholar

59. Bai, Enpei, “Zongjie jingyan tuanjie fenjin, yingjie Xibu Dakaifa” [Summarize experience, unite and go forth, welcome the Great Development of the West], Qinghai Shehui Kexue [Qinghai Social Sciences], no. 5 (1999).Google Scholar

60. Wang, Zhengwei, “Fahui ningxia youshi yingjie Xibu Dakaifa” [Bring forth Ningxia's advantages and welcome the Great Development of the West],” Shichang Jingji Yanjiu [Studies of the Market Economy], no. 4 (1999).Google Scholar

61. China International Economic Consultants Company, “Shaanxi sheng zhashi yingjie Xibu Dakaifa” [Shaanxi Province heartily welcomes the Great Development of the West]. In China International Economic Consultants, ed., CIEC Policy and Law (Beijing: CIEC, 2000).Google Scholar

62. Research Team of the CASS Western Development Research Center, “Xibu Kaifa.” Google Scholar

63. Ibid.Google Scholar

64. Ibid.Google Scholar

65. Ibid.Google Scholar

66. Kahn, Joseph, “China Gambles on Big Projects for Its Stability,” New York Times , January 13, 2003.Google Scholar

67. Fan, Gang, “‘Bengkui Lun’ Yu Zhongguo Jingji” (The “collapse hypothesis” and the Chinese economy), Chengshi Jingji Daokan [Journal of Urban Econmics], no. 9 (2003).Google Scholar

68. Ministry of Science and Technology, Guanyu jiaqiang Xibu Dakaifa keji gongzuo de ruogan yijian [Certain opinions concerning strengthening science and technology work for the Great Development of the West] (2000 [cited April 21, 2004]); available at www.chinawest.gov.cn/chinese/asp/start.asp?id=c.Google Scholar

69. Ibid.Google Scholar

70. Research Team of the CASS Western Development Research Center, “Xibu Kaifa.” Google Scholar

71. State Council, Guanyu Shishi. Google Scholar

72. Nie, Yinan and Bian, Feng, “Wang zhibao: Xibu Dakaifa de zhongdian shi fazhan minying jingji” [The important point of the Great Development of the West is the development of private sector],” Zhonghua Gongshang Shibao [China Industry and Commerce Times], September 2, 2003.Google Scholar

73. Han, , “The Asymmetry in Banking.” Google Scholar

74. Miao, Xiaohuan, “Minying jingji canyu Xibu Dakaifa dayou zuowei” [Private economy plays a great role in the Great Development of the West], People's Daily , June 29, 2000.Google Scholar

75. Li, Yi, Tong, Shuwei, and Hua, Zhong, “Xibu Dakaifa de zhengce zhichi yu zijin touru wenti zhengyi” [Commentaries on the problems of policy support and investment for the Great Development of the West]. In Development Research Center of the State Council, ed., DRC Regional Economic Analysis (Beijing: Development Research Center of the State Council, 2004).Google Scholar

76. Research Team of the CASS Western Development Research Center, “Xibu Kaifa.” Google Scholar

77. Hua, and Li, , “Jiada Woguo.” Google Scholar

78. State Economic and Trade Commission, State Planning Commission, and Ministry of Foreign Trade and Economic Cooperation, Zhongxibu diqu waishang touzi youshi chanye mulu [A catalog of preferential industries for foreign investment in the central and western region] (Asia Information Resources Limited, 2001 [cited March 13, 2004]).Google Scholar

79. Research Team of the CASS Western Development Research Center, “Xibu Kaifa.” Google Scholar

80. This is the empirical finding of Sachs et al. See Sachs, Jeffrey, et al., “The Relative Contributions of Location and Preferential Policies in China's Regional Development: Being in the Right Palce and Having the Right Incentives,” China Economic Review 13 (2002).Google Scholar