The Regional Classification & Its Challenges in the Chinese Regional Policy System

Wang Qingyun Prof. PH.D

( The Academy of Macroeconomic Research, NDRC ) Oct.8 2007 Brussels

Content China’s Major Geographic Features The scopes of Chinese Eastern, Central and W

estern Regions and their Evolution The Different Policies Treatment among Chin

ese Eastern, Central and Western Regions The Challenges Facing Classification of Chine

se Eastern, Central and Western Regions The prospect of Ratings of Chinese Provinces

Based on their economic situation

China’s Major Geographic Features

Position:West: Coastal AreasEast: Inland Altitude: West: High, Mountain, Plateau, East: Low, Plain, HillLarge Rivers go from west to east Climate:West: Drought, Grassland, Desert, IcelandEast: Rainy, Arable Land, Fishing Pool Generally: West: Disadvantageous East:

Advantageous

Map of China’ Topography

top>=30002000=<top<30001000=<top<2000500<top<1000top=<500

图例

1 400比例尺： ： 万

The scopes of Chinese Eastern, Central and Western Regions and their Evolution

Chinese Seventh Five-year Plan: Eastern Region: （ 11 ）： Beijing, Tianjin, Hebei,

Liaoning, Shanghai, Jiangshu, Zhejiang, Shandong, Guangdong(including Hainan), Guangxi.

Central Region: （ 9 ）： Shanxi, Inner Mongolia, Jilin, Helongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan.

Western Region: （ 9 ）： Shichuan （ including Chongqing ） , Guizhou, Yunnan, Tibet, Shaanxi, Guansu, Qinghai, Ninxia,Xingjiang.

Note: Then totally 29 Provinces, Autonomous Regions and Municipalities in Chinese Mainland.

Classification of three Region

The scopes of Chinese Eastern, Central and Western Regions and their Evolution

Since the year 2000 Eastern Region: （ 11 ）： Beijing, Tianjin, Hebei, Liaoni

ng, Shanghai, Jiangshu, Zhejiang, Shandong, Guangdong, Hainan,

Central Region: （ 8 ）： Shanxi, Jilin, Helongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan.

Western Region: （ 12 ）： Shichuan, Chongqing, Guizhou, Yunnan, Tibet, Shaanxi, Guansu, Qinghai, Ninxia,Xingjiang.

Inner Mongolia, Guangxi.Note:(1) Totally 31 Provinces, Autonomous Regions and Municipalities i

n Chinese Mainland after Hainan separating from Guangdong in 1988 and Chongqing separating from Shichuan in 1997.

(2) Inner Monganil and Guangxi were incorperated into Western Region after the Western Development Program was launched in 2000

Classification of three Region

The Different Policies Treatment among Chinese Eastern, Central and Western Regions

In terms of obtaining investment subsidies from central government

For drinking water projects in rural areaWest: 63% (subsidy rate) Central: 45%East: 29%For water and soil conservation projects in

rural areaWest: 2/3 ( subsidy rate ) Central: 1/2East: 1/3

The Different Policies Treatment among Chinese Eastern, Central and Western Regions

In terms of obtaining fiscal transfer from central government

Taking salary increase for civilian servants as example

West: 80% (from central fiscal transfer ) Central: 60%East: 0%

The Different Policies Treatment among Chinese Eastern, Central and Western Regions

In terms of preferential treatment of corporate income tax

Since the year 2000West: 15% Central: 33%East: 33%

The Challenges Facing Classification of Chinese Eastern, Central and Western Regions

Challenge one ： The Gap among provinces in Eastern Region more than that between regions

Taking per capita GDP in 2005 as exampleShanghai was 4.7 times of HainanWhile Eastern Region was 2 times of Centra

l Region, 2.5 times of Western RegionTherefore it is unfair to some provinces lik

e Hainan in Eastern Region

The Challenges Facing Classification of Chinese Eastern, Central and Western Regions

Challenge two ： Some provinces in Western Region are more developed economically than that in Central Region

Also taking per capita GDP in 2005 as examplePer capita GDP of Chongqing was 109824.7, m

ore than Anhui, Jiangxi and Henan in Central Region

Therefore it is unfair to some provinces like Anhui in Central Region

The prospect of Ratings of Chinese Provinces Based on their economic situation

Area unit: Province (Autonomous Region, Municipality )

Major Criteria: Per capita GDP and taking the factors of ethnic and size of

area Number of Rating: Five See the result from the following table

Group Criteria Province Number

High Income

Higher than 250 % of National Average

Shanghai, Beijing, Tianjin 3

Middle High Income

Between 120 and 250 % of National Average

Zhejiang, Jiangshu, Guangdong, Shandong, Liaoning, Fujian

6

Middle Income

Between 119 and 75% of National Average

Hebei, Heilongjiang, Jilin, Shanxi, Hubei, Chongqing,Hainan

7

Middle Low Income

Between 74 and 65% of National Average

Hunan, Shaanxi, Jiangxi, Henan, Shichuan

5

Low Income

Lower than 65 % of National Average

Inner Mongolia, Xinjiang, ningxia, Qinghai, Tibet, Guangxi, Anhui, Yunnan, Guansu, Guizhou

10

Another Classification of Area in China

Poverty-Stricken Area or Underdeveloped Area

Old Industrialized Area or Old Industrial Base Economic Expansion Area

Thank You