Western Development Program Research Articles

Does the Small-Scale Trade in Border Areas Contribute to Poverty Reduction?

With the vigorous development of strategies such as the "Belt and Road" Initiative, the Border Areas and Minorities Development Program, and the Western Development Program, China's border trade has flourished. Under the strong leadership of the Communist Party of China and the People's Government, China's poverty alleviation efforts have achieved remarkable results that have attracted worldwide attention, successfully eradicating the absolute poverty that has plagued the Chinese nation for many years. In this context, to investigate the impact of border trade on multidimensional poverty in border areas, this paper constructs a multidimensional poverty index from five dimensions: economy, healthcare, employment, education, and living conditions. A fixed-effects model is employed to empirically examine the impact of border trade on multidimensional poverty in border areas and its underlying mechanisms. The research findings are as follows: (1) Border trade significantly reduces the level of multidimensional poverty in border areas. This conclusion remains valid after conducting a series of robustness tests and using lagged variables as instrumental variables to address endogeneity issues. (2) Mechanism analysis reveals that border trade primarily improves multidimensional poverty through employment promotion effects, infrastructure effects, and fiscal expenditure effects. (3) Heterogeneity analysis shows that the poverty reduction effect of border trade is more pronounced in areas with lower population densities, lower urbanization rates, and in the southwestern and northwestern regions. This paper provides a new perspective for building common prosperity in the new era and offers academic support and policy guidance for further promoting border trade and strengthening friendly regional exchanges.

Tax competition among local governments: Evidence from the spillovers of location-based tax incentives in China

This paper exploits the tax incentives in China's Great Western Development (GWD) Program to identify tax competition among local governments. The reform reduces the statutory corporate income tax rate in GWD regions. Using this exogenous tax reduction as a quasi-natural experiment and adopting a difference-in-differences approach, we find that the reform in GWD regions leads to a 1.6328 percentage point decline in the effective corporate income tax rate and a 0.658 percentage point decline in the macro tax burden in non-GWD counties adjacent to the policy boundary. The results suggest that there are strategic interactions as well as a race to the bottom among counties in their tax setting. The results are stable across a series of robustness tests such as excluding other mechanisms of tax rate interaction and excluding the impact of other incentive policies in the GWD Program. Combined with the tax reduction effect in border GWD counties, we find that the tax interaction coefficient for the effective corporate income tax rate and macro tax burden between GWD and non-GWD counties along the border are 0.8718 and 0.3553, respectively. This reflects the intense tax competition among local governments in China. In addition, we demonstrate that tax competition mainly exists between geographically adjacent counties, as no such spillover effects are observed in non-GWD counties far from the policy boundary.

Analysis of Urban Expansion and Human–Land Coordination of Oasis Town Groups in the Core Area of Silk Road Economic Belt, China

Under economic globalization, synergy among cities has been actively promoted. Establishing inter–city networks and joint regional development could catalyze economic growth. The mode and pace of urban growth could be gauged by construction land expansion and human–land coordination. This study adopted the dynamic change, the center of gravity, and coordination analyses to comprehensively portray spatial patterns and changes amongst 13 oasis town groups in Xinjiang, China, from 2000 to 2018. The results identified that 2010 was the turning point of acceleration in construction land expansion, demonstrating notable spatial differentiations among town groups. Northern Xinjiang experienced faster urban growth than southern Xinjiang. The Urumqi–Changji–Shihezi (UCS) town group on the northern slope of the Tianshan Mountains constituted the crucial urban core with the fastest construction land expansion. Although the towns in southern Xinjiang were small and beset by inherent limitations in the early period, some town groups acquired new impetus and vitality and became the fastest–developing areas in Xinjiang in recent years. The growth was driven by China’s western development program, economic assistance, and Silk Road Economic Belt. Eastern Xinjiang had convenient transportation, but its small urban entities needed population supplementation to invigorate urban expansion. In the far north, the Altay and Tacheng–Emin (TE) town groups were situated too far from development cores. They lacked the collateral benefits of nearby strong–growth loci, resulting in sluggish growth. A north–south dual–hub strategy was proposed to spearhead the dissemination of urban growth by fostering core–periphery linkages pump–primed by improved road connections.

Place-based policies, administrative hierarchy, and city growth: Evidence from China

Place-based policies often lead to unintended heterogeneous effects due to ignored constraints. Political hierarchy is one of these constraints whose effects on policy performance have rarely been examined. By employing data of prefecture-level cities in western China from 1995 to 2007, we assess the impacts of China's Great Western Development program on the growth divergence between cities with high and low administrative hierarchies. The empirical results show that the annual per capita GDP growth of high-level cities was 1.26 percent higher than that of ordinary prefecture-level cities after implementing the policy in 2000. Due to their high political status, the high-level cities experienced an increase in population, investment, and transfer payments after the policy, which were mostly siphoned from surrounding low-level cities. This caused a decline in the total factor productivity and increased resource misallocation. These findings suggest that place-based policies should consider imbalance effects under political hierarchy.

Fiscal transfers and economic convergence: Evidence from China

AbstractThis study investigates how fiscal transfers affect economic convergence across Chinese provinces. Using the data of 26 provinces over 1995–2016, we find that fiscal transfers promote an ‘immiserising convergence’ resulting from a decline in growth in rich provinces. Specifically, general fiscal transfers play an insignificant role, and special fiscal transfers facilitate the economic growth of poor provinces but impede that of rich provinces. Furthermore, the mechanism tests show that the positive effect of fiscal transfers on productive expenditures declines with higher initial real GDP per capita and becomes negative in rich provinces. To further identify causality, we conduct a difference‐in‐differences estimate by exploiting the Great Western Development Programme as a quasi‐natural experiment and employ an instrumental variable approach with ethnic diversity in 1990 as the instrument. In sum, our findings suggest that the positive growth effect of fiscal transfers in poor provinces is at the cost of sluggish growth in rich provinces.

The unintended psychological and behavioral drawbacks of big push strategies: Increased psychological entitlement, selfish behavior, and decreased prosocial behavior

Governments and policy makers often adopt big push strategies to help under-developing regions achieve economic growth and shake off poverty. Although numerous studies have documented big push strategies’ positive impacts on indicators of economic development (e.g., poverty rate, unemployment rate, etc.), the current research presents evidence of serious psychological and behavioral drawbacks of such policies. Specifically, we examine China's Great Western Development (GWD) Program as a recent prominent example of a big push strategy, in which approximately 370 million people receive preferential benefits while more than 1 billion people do not. Using a regression discontinuity design based on distance from the boundary of the GWD Program (+/- 100 km), we find that individuals residing in non-GWD regions report higher levels of psychological entitlement compared to their counterparts residing in GWD regions. Furthermore, individuals’ psychological entitlement was positively associated with their selfish behavior and negatively associated with their prosocial behavior. Our results offer initial evidence of the unintended psychological and behavioral consequences of big push strategies.

UIGHURS IN XINJIANG: ECONOMIC DISCRIMINATION AND POLITICAL REPRESSION

This paper deals with the political economy of systematic discrimination of Uighurs in Xinjiang, the Turkish minority in the province by the Chinese Communist Party. The various economic projects like the Western Development Program(WDP) and Belt and Road Initiative (BRI) further exacerbated the alienation of the ethnic minority. Through such programs, the Chinese government encouraged the Han population to Migrate into Xinjiang, and 'hanication'of the province culminated in widening the inequality and relative deprivation of the Uighurs. The tensions after the new development projects increased the secessionist and national tendencies among them. During the covid-19 outbreak, the government intensied the repressive measures, and the question of Uighurs in economic terms remains unresolved

Place-based policies, state-led industrialisation, and regional development: Evidence from China's Great Western Development Programme

This study evaluates the effects of a prominent place-based policy in China—the Great Western Development Programme. In 2000, China's central government targeted inland provinces in Western China for considerable investment and preferential treatment to accelerate their industrialisation. Using a spatially discontinuous design, we find that the programme has succeeded in accelerating industrialisation, raising the annual GDP growth rate by 1.6 percentage points in the targeted regions. However, no such effects are observed on nonfarm employment or wages. Moreover, the GDP growth effects primarily result from massive physical investment rather than the growth of total factor productivity.

Social Mobility of Uighur Population in Mainland China: A Comparative Perspective

The Uighurs are linguistically and culturally distinct from the Han Chinese majority, and they have a strong sense of identity, often associated with a violent resistance against China’s central government and with conflictual relationships with the Han living in Xinjiang. Despite Xinjiang’s development over the past decades, especially after the implementation of the Great Western Development Program by the Chinese central government, the region still lags behind the country’s economically developed eastern regions due to various historical, environmental and social reasons. This program did not contribute much to regional equality, economic efficiency or improving inter-ethnic relations. The side effects of national development strategy including massive Han in-migration and environmental degradation exacerbated ethnic tensions and strengthened nationalist tendencies among the Uighurs. Yet, to investigate recent changes in social mobility of Uighur population is of great importance. Based on the publicly released 2000 and 2010 censuses data, this paper assesses the changes in Uighur population with respect to education, occupational status and internal migration in a comparative perspective through calculating population concentration indexes and location quotients.

Spatiotemporal Changes of China's Carbon Emissions

AbstractSpatiotemporal changes in China's carbon emissions during the 11th and 12th Five‐Year Plan periods are quantified for the first time through a reconstructed nationwide high‐resolution gridded data set. The hot spots of carbon emissions in China have expanded by 28.5% (toward the west) in the north and shrunk by 18.7% in the south; meanwhile, the emission densities in North and South China have increased by 15.7% and 49.9%, respectively. This suggests a clear transition to a more intensive economic growth model in South China as a result of the energy conservation and emission reduction policies, while the expanded carbon hot spots in North China are mainly dominated by the Grand Western Development Program. The results also show that China's carbon emissions exhibit a typical spatially intensive, high‐emission pattern, which has undergone a slight relaxation (up to 3%) from 2007 to 2012 due to a typical urbanization process.

Ethnic Integration and Development in China

This paper pursues an inquiry into the relationship between ethnicity and development in the largest authoritarian country in the contemporary world, the People’s Republic of China. It engages the theoretical literature on ethnic diversity and development in general, but also pays special attention to political economy logics unique to authoritarian systems. Focusing on the western part of China over a decade since the launch of China’s Western Development Program (xibu da kaifa) in 2000, this paper utilizes the data from two censuses (2000 and 2010) together with nighttime streetlight imagery data to analyze the overall relationship between ethnicity and development provision. It also analyzes changes in such a relationship during this period. The paper finds that ethnic minority concentration negatively correlates with economic development in both the years 2000 and 2010 across the western provinces. It also finds that counties in non-autonomous provinces, which are historically more integrated with the rest of China than autonomous provinces, have a positive and systematic correlation between changes in ethnic minority concentration and changes in development during the 10-year period. The counties in autonomous provinces, on the other hand, show the opposite trend. Using three case studies of Tibet, Inner Mongolia, and Xinjiang, the paper concludes that although there is in general a tendency for ethnic minority concentrated areas to be less developed, ultimately which groups prosper more or less depends upon specific economic development and which political control logics the Chinese state implements.

A Decade Trend of Total Factor Productivity of Key State-Owned Forestry Enterprises in China

State-owned forestry enterprises are important elements of the forestry economy in China. The operational efficiency of such enterprises depends on technological progress and other input factors. Total factor productivity (TFP) is an important means to evaluate the efficiency of technical elements. The growth of production efficiency can be classified into efficiency variation and technical variation. The TFP of 135 key state-owned forestry enterprises in the northeast, southwest, and northwest regions of China in 2001–2011 was measured through Malmquist–data envelopment analysis. The technological progress of the state-owned forestry enterprises positively affected TFP variation, but technical efficiency only slightly increased and scale efficiency even negatively affected TFP variation. The average growth rate of TFP in the northwest region is higher than those in the northeast and southwest regions. The Western Development Program of China increasingly contributes to the economic development of western areas. The increasing investment of the government in science and technology accelerates the development of forestry economy in China.

중국 소수민족 이중언어교육정책의 지향에 대한 연구: 서부대개발 이후 신장위구르자치구의 상황 변화에 대한분석을 중심으로

중국 소수민족 이중언어교육정책의 지향에 대한 연구: 서부대개발 이후 신장위구르자치구의 상황 변화에 대한분석을 중심으로

China’s transfer payment mechanism: A case study

In this paper, a two-region endogenous growth model is adapted to analyse Western China’s development, and regional divergence and convergence processes. Dynamic optimization is utilized to calculate the growth rate of the Chinese economy on the optimal growth path, and backward integration is utilized to simulate the evolvement of some key indicators, including relative GDP per capita of Western China to Eastern China, regional capital growth rate and regional GDP growth rate. The calibrations of this model after 1992 are conducted. The calibration results provide evidence about the speed of Western China’s relative development, and also shed some light on the future regional convergence process under the Western Development Programme launched in 2000.

Institutional entrepreneurs on opportunity formation and exploitation in strategic new industry

Purpose – The purpose of this paper is to examine the role of institutional entrepreneurship in opportunity formation and opportunity exploitation in developing emerging strategic new industries. Design/methodology/approach – The paper reviews the focal literature focussing on institutional entrepreneurs’ role in opportunity formation with special attention to opportunities for institutional entrepreneurs in emerging economy. A multi-method approach consisting of historical case studies and event sequencing is applied to track the historical development of the solar energy industry in two case contexts and to investigate the role of institutional entrepreneurs in this process. Findings – Investigation of two cases illustrates that different types of institutional entrepreneur, as represented by individual entrepreneurs and local government, in the context of massive institutional change – such as the Grand Western Development Program and the Thousand Talents Program in China – have varied effects on triggering and inducing institutional change and innovation to explore and exploit opportunities in emerging new industries. Practical implications – The significance of local context for the nature and scope of institutional entrepreneurship in emerging economy is worthy of further research. The top-down process of institutional innovation dominated by local government might cause myopic outcome and distortion of market opportunities. Indigenous individual entrepreneurs with well-accumulated political capital and strong perceived responsibility could be the main actors to introduce incremental institutional change by combining bottom-up and top-down processes and promoting sustained new industry development through creating and seizing institutional opportunities and market opportunities. Originality/value – This paper illustrates the close relationship between institutional environment and opportunity formation in emerging economies, contributes to the understanding of contextualizing institutional entrepreneurs in different regional contexts and discloses the problems involved in local government acting as an institutional entrepreneur.

Escaping the resource curse in China.

Many societies face an income gap between rich regions with access to advanced technology and regions that are rich in natural resources but poorer in technology. This "resource curse" can lead to a Kuznets trap, in which economic inequalities between the rich and the poor increase during the process of socioeconomic development. This can also lead to depletion of natural resources, environmental degradation, social instability, and declining socioeconomic development. These problems will jeopardize China's achievements if the current path continues to be pursued without intervention by the government to solve the problems. To mitigate the socioeconomic development gap between western and eastern China, the government implemented its Western Development Program in 2000. However, recent data suggest that this program has instead worsened the resource curse. Because each region has its own unique strengths and weaknesses, China must escape the resource curse by accounting for this difference; in western China, this can be done by improving education, promoting high-tech industry, adjusting its economic strategy to balance regional development, and seeking more sustainable approaches to socioeconomic development.

Local responses to macro development policies and their effects on rural system in China’s mountainous regions: the case of Shuanghe Village in Sichuan Province

Abstract China has promulgated a series of policies including the Western Development Program, the Grain for Green Project, agricultural support policies and building a new countryside strategy to eliminate east-west differences and urban-rural disparities since the late 1990s. This paper gives a holistic examination on local responses to the four typical macro socio-economic development policies and their effects on rural system based on a case study of a mountainous village in southern Sichuan Province. The results showed that the policies have not moved the case study village from its historically marginal status. To some extent, its socio-economic situation might have been worsened by accelerated out-migration of the youth, loss of agricultural land due to afforestation and industrial plants, increased fire hazard due to afforestation and reforestation, increased environmental pollution due to industrial enterprises attracted to the village and a steep decline in agricultural production due to loss of and inefficient use of cultivated land. Factors causing local villages’ dilemmas include the nonuniformity of actors’ objectives, finiteness of villagers’ abilities, and the imperfect incentive and restraint mechanism for local government’s activities under existing policy framework composed of uncoordinated one-size-fits-all policies. We suggest that China’s rural policy in the new period should gradually shift from a sectoral to a place-based one, from top-down incentives to the development of bottom-up projects, and fully recognize the diversity of rural space, so as to lift local capacities and make good use of the knowledge shared by different actors. Moreover, it is also necessary to integrate the various sectoral policies, and improve the interministerial and interdepartmental coordination of rural policies at regional and local levels.

Mobility and Agency: Private Sector Development in Rural Central China

Economic inequality is a continuing challenge for China. According to a recent World Bank report, China’s Gini Coefficient rose to .47 in 2009, from .28 thirty years ago, indicating rising income inequalities. The rising rural–urban income gap is particularly challenging, as incomes of urban residents are now 3.3 times greater than rural incomes. In response to this, the goal of “inclusive growth” (growth which benefits all economic strata and regions) has become central to the design of China’s 12th Five-Year Plan (FYP), in line with the commitment of President Hu Jintao and Premier Wen Jiabao to achieving a “harmonious society” in China. To counter rising income inequality between urban and rural China and between coastal regions and the interior, Beijing has poured more than one trillion yuan into infrastructure and social welfare improvements, and has distributed these funds as part of its Western Development Program (since 1999), the Northeast Rejuvenation Initiative (after 2003) and the Central China Developmental Program (after 2005), along with a host of other developmental aid programs. While such government-led efforts may provide some benefit to remote regions, the state’s ability to support the generation of private income is of paramount importance. Since 1998, when China privatized the majority of local state-owned enterprises (SOEs) (difang guoying qiye 地方国营企业), the private sector has played an ever more important role in employment, innovation and income generation. Yet, while a number of national policies and laws have improved the business environment for private enterprise over the past 30 years, there continue to be

From American Westward Movement to Chinese Western Development------ General analysis of relationships between institutions and Economic development as well as the enlightenment for China

This paper starts from the description of the concept and importance of institutions. Then it takes American Westward Movement as an example to illustrate in details about the relationship between institutions and economic development as well as the significant influence that institutions exert. After analyzing the current institutional obstacles (the lagged-behind government functional system and market system, and the super sticky institutional change) that stand in the way of the Western Development Program in China, this paper finally puts forward several practical approaches to improve this situation according to the theory of system innovation. (The additional statistical analysis better proves that the innovations on institutions did improve the average standard of living and comfort level of local citizens.)

Developing Central China: A New Regional Programme

Developing Central China: A New Regional Programme Hongyi Lai As a large and diverse country, China faces problems in equitable regional development and national economic integration. From the late 1970s to the late 1990s, China's national government focussed its developmental efforts in the coastal region.1 In the late 1990s, China started to address the problems of regional imbalance in economic development. The national government launched its Western Development Programme after 1999, then a Northeast Revival Initiative after 2003. However, little consideration was given to central China.2 To make up for the neglect of central China in its past national regional development programmes, Premier Wen Jiabao declared in March 2004 that Beijing would speed up the development of this region in order to attain more balanced national development.3 Since then, fostering the rise of central China (zhongbu jueqi) has become a popular topic in China's media. Since 2003, there have been four officially-recognised regions in China. The coastal (eastern) region is comprised of ten provinces: Beijing, Tianjin, Hebei, Shandong, Shanghai, Jiangsu, Zhejiang, Fujian, Guangdong and Hainan.4 The central region includes: Shanxi, Henan, Anhui, Jiangxi, Hubei and Hunan.5 The northeast region has three provinces: Liaoning, Jilin and Heilongjiang while the western region makes up the remaining areas: Inner Mongolia, Shaanxi, Gansu, Ningxia, Qinghai, Xinjiang, Tibet, Sichuan, Chongqing, Yunnan, Guizhou and Guangxi (see Figure 1). [End Page 109] This article analyses the context, rationale, policies and prospects for developing central China. Specifically, it analyses the relative decline of central China, the loud complaints from central China elites, national leaders' announcements to develop central China and their rationale. This is followed by an overview of the economic-social profile of central China, policy stances by national leaders, measures implemented by national ministries to support central China and initiatives from individual central provinces to accelerate economic development. Finally, the article assesses the prospects for the development programme. Click for larger view Figure 1 China's Regions [End Page 110] Unbalanced Regional Development in the Reform Era Though central China has grown much faster in the reform era (since 1979) than in the Mao era, the region is falling behind the dynamic and robust coastal region in terms of per capita GDP.6 As a result of the deliberate fostering of economic development in the coastal region in the 1980s and early 1990s, the coastal region has become the pioneer in marketisation, and a national, even global assembly powerhouse (see Table 1). The robust growth of the coastal region in the reform era can be attributed to a number of factors. China's industrialisation in the 20th century was concentrated here. It has greatly benefited from several deep-water harbours, the densest transportation network, best tele-communications, one of the highest adult literacy rates and the highest per capita retail sales (see Table 2). In short, it has enjoyed access to the world and largest domestic markets as well as the country's best infrastructure and human capital. The central and western regions have benefited from the trickle-down effects of growth from the coastal region. Market forces unleashed by economic reform have facilitated factor mobility. Migrants from the central and western regions work in the manufacturing and services sectors in the coastal region. At [End Page 111] the same time, the central and western regions have expanded their production of energy, raw materials and agricultural products in order to satisfy demand in the coastal region. Click for larger view Table 1 Regional Economic Indicators, 2003 (% of national total) Click for larger view Table 2 Regional Physical and Human Indicators, 2002 Market forces, however, have not significantly reduced regional inequalities. Despite their rapid growth, the economic clout of the central and western regions has stagnated, whereas that of the coastal region has improved. [End Page 112] Multiple factors have caused this. First, the central and western regions have great disadvantages in terms of human capital, infrastructure and geographic location.7 Located far from the...