In July 2013, at the port of Qinzhou, southwest China, Premier Li Keqiang presented the government’s plan to deal with a possible external economic crisis.
As export shipments to the US and Europe began to stagnate at the time, China sought to use ports like Qinzhou, in Guangxi province, to tap into many nearby emerging markets.
Seven years later, China once again turned its development direction to the country’s vast, energy-rich western region, to help stabilize the economy in an increasingly unpredictable world context.
Chinese President Xi Jinping during his visit to Xi’an city, Shaanxi province, on April 22.
Beijing announced the plan during last month’s parliamentary session, calling for the development of central and western provinces to prepare for the scenario of the country’s isolation and economic growth, which appears
Gong Gang, a professor of economics at Yunnan University of Finance and Economics, said that China cannot continue to be a `marginal country of a system revolving around the US`, after Washington viewed Beijing as a rival.
`Instead, China needs to strengthen relations with countries in the Belt and Road Initiative, developing countries, and create a system that orbits around itself,` Professor Gong said, adding that Beijing
China created an economic miracle by participating in many international markets and financial systems dominated by the US four decades ago.
China proposed its first Western Development Strategy in 1999 and poured a large budget into reducing inequality between economic regions across the country, which brought very limited effectiveness.
The new `Go West` plan includes a series of transportation infrastructure initiatives for western regions, such as the Sichuan – Tibet railway project, or the high-speed railway along the Yangtze River, along with multiple airports
The Chinese government will also develop new energy projects, such as underground oil and gas storage facilities, and encourage industrial projects to shift operations westward instead of relocating abroad.
20 provinces and regions, accounting for 3/4 of the country’s area but only 1/4 of its population, will be included in Beijing’s new plan.
The new plan also incorporates the Belt and Road Initiative launched by President Xi Jinping, which aims to expand China’s influence on the international stage, through a network of infrastructure projects and links
`We will include western regions in the Belt and Road Initiative, as well as many other key regional projects to create a unified national market, and build an export-oriented economy
Government sources involved in the development of the `Look West` plan said it is seen as a direct solution to many international uncertainties facing China.
Last summer, Beijing established many city clusters to create new growth areas, including Beijing – Tianjin – Hebei, the Yangtze River Delta with Shanghai city, the Pearl River Delta with Shenyang.
Wang Yiming, former deputy director of the Development Research Center of the State Council, said China is facing extremely different domestic and international situations.
`The triangle of relations, in which East Asia is the production center, Europe and the US are consumption markets and financial centers, and the Middle East and Latin America are the energy bases, has undergone dramatic changes
He added that these changes are `demonstrated through the trade conflict with the US and China’s strategic response policy`.
`How China can connect with emerging markets, developing countries, and economic zones under the Belt and Road Initiative is an issue that needs further study,` Wang said.
China’s efforts to diversify economic relations through its western development plan have shown encouraging signs, as these regions are less affected by Covid-19.
The transportation system was developed in Chongqing city, southwest China, in March 2019.
However, many remain skeptical about how the government will unlock the growth potential of the vast inland provinces, while also opening up connections with developing countries and European markets.
`This will depend mainly on the government’s resources,` said Raymond Yeung, chief economist at ANZ bank.
The 1999 plan did not help the west become economic drivers as expected by many Chinese policymakers.
After 7 years of development, Qinzhou port’s operating capacity is still very limited compared to busy ports in the east.
`I don’t see any worthwhile return on investing here,` said Fraser Howie, an expert on China’s economy.