The 11th Five-Year Plan: Regional Economies

Tuesday, January 23, 2007 2:46
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While researching investment incentives and regulations in Western china, I came across this document that lays out the 11th Five-Year Plan in an easy to cosume bullet point formate.
A direct translation (forgive the Chinglish), the layout is a good guide to what the actualy text of the 5 year study contains, and the direction the government’s plan will take.

For those who are interested in understanding the regulatory plan surrounding the development of the “Harmonious Society”, the below is something you will find of interest.

Part One: Promoting Development of the Western Region
Provinces included : Chongqing, Gansu, Guangxi, Guanxi, Guizhou, Inner Mongolia, Ningxia, Qinghai, Shanxi, Sichuan, Tibet, Yunnan and Xinjiang)

Goals:
• Improve the basic infrastructure situation – build new railways to neighbor countries and provinces; build new power bases and launch the project of “ transport power from western area to the eastern” .
• Support the industrial with regional characteristics, like: clean energy, mines, advance manufacturing, high technology, and other regional dominate industries.
• Improve public services – Prioritize compulsory education and professional education.
• Improve the medical care system in rural areas.
• Develop the frontier trade.
• Provide more national financial support to build stable funding channels.

Note: Typically, I break this region into Southwest and Outer provinces as there are very large gaps between the two in terms of geography, economy, and cultures.

To learn more about the Southwest, see our profile here

Two: Northeast Old Industrial Base Revitalization
Provinces included: Heilongjiang, Jinan, and Liaoning

Goals:
• Develop modern agriculture.
• Build deep-processing bases for advance equipments, fine steel, petrochemical processing, vehicles, shipbuilding, and agricultural and sideline products processing.
• Set up resource development alternative mechanism for those resource depletion cities: Fuxin, Daqing, Yinchun and Liaoyuan.
• Build cross-provincial railways and high ways connections .
• Strengthen environmental protection, especially for black soil loss.

To learn more about the Northeast, see our profile here

Three: Promoting the development of Central Area
Provinces Included: Shanxi, Anhui, Jiangxi, Henan, Hunan and Hubei

Goals
• Improve the industrial level basing on the existing foundation, advance the industrialization and urbanization, and develop itself by the integration of western and eastern.
• Build central area into the main agricultural food (except for vegetates and meat) base.
• Support building the big coal production bases in Shanxi, Henan and Anhui.
• Form the fine raw material base, and accelerate the structural adjustment on the steel, chemicals, nonferrous and building materials industries.
• Support manufacturing in mining machinery, vehicles, agricultural machinery, rolling stock, and transmission equipment; at the same time, we do support high technological industries, and they are: software, new material, photoelectron, bioengineering etc.
• Improve the infrastructure for logistics: construct mature transportation system—-railway, road, river port and regional airport.

To learn more about the Central, see our profile here

Four: Encourage the Eastern take a lead in development
Provinces Included: Beijing, Fujian, Guangdong, Hainan, Hebei, Jiangsu, Shandong, Shanghai, Tianjin, and Zhejiang

Goals
• Improve the ability of independent innovation, and develop independent intellectual property rights and core technology.
• Prioritize advance manufacturing, high technology, and service industries to improve the ability to international competence.
• Protect farming land, and develop the modern agriculture.
• Let the special economic zones, Pudong New district and Tianjin’s Binhai New District play their leading role, and support Taiwan- Mainland economic cooperation.

To learn more about the East, see our profile here

Five: Periphery Development
Provinces Included: None specified

Goals:
• Give more financial support.
• Protect natural ecology, and improve the infrastructure .
• Develop the education system. Protect traditional minority culture.
• Develop some industries with minority characteristics such as pharmacy.
• Continually practice the Policy of supporting the Tibet and Xinjiang.

Wrap-Up:
For those that have been following our other regional posts, I thought this would be interesting as it does give some insights as to the government mind set when it comes to balancing out growth and prosperity in China.

As has been seen in the 10 previous 5 year plans. Nothing goes according to plan, the plans are flexible, but the plans are a good compass for where the next five years are headed.

Drilling down a bit further into the analysis, the government wants to push the prosperity inward. that means that investors looking for opportunities on the east coast will need to clear more hurdles than if they were looking west.

Moving down another step, as the government moves forward with its infrastructure plans (road transport and river transport), many are going to find it much easier to access China’s cities. This is important for companies looking to import goods into China for distribution in areas once believed to be out of reach as well as for companies looking to move from the high cost base found on the east coast.

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