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Apr 13, 2012 | 12:51 GMT

Geographic Challenges of Developing China's Interior

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Summary

In China, the development of interior provinces has been a key Communist Party prerogative for more than a decade. In recent years, especially after the 2008-2009 global recession exposed the fragility of China's export-oriented growth model, inland development emerged as more than a policy initiative: It is a pressing, fundamental economic imperative. Modernizing and connecting the poor, densely populated interior is seen as an essential step toward building a domestic consumer base that is strong enough to allow the economy to shift from the current economic model toward something more sustainable in the long run.

But unlike the United States, which benefits from vast, easily traversable lowlands connected by a single river system, China's internal geography is rugged and extremely diverse. This has always made unifying China difficult. Today, despite Beijing's significant push to improve infrastructure connectivity within and between regions, the challenge of integrating and developing China's inland provinces persists due to the region's geographic diversity, its distance from the more prosperous coast, and its large and geographically dispersed population.

Beijing made interior development a key priority in 1999, when then-President Jiang Zemin launched the "Go West" initiative aimed at bringing China's far west into the national economy, though the underlying logic was already in place under Deng Xiaoping in the late 1980s and early 1990s. But "Go West" represents only one part of this process. The most crucial region to Beijing's efforts to restructure the economy is the area loosely termed Central China. But Central China's geography poses substantial challenges to effective economic integration and development.

Inland China's Geographic Diversity

The term Central China comes from Beijing's 2004 "Rise of Central China" plan and refers officially to six provinces: Hunan, Hubei, Shanxi, Anhui, Jiangxi and Henan. Geographically, these provinces' primary unifying feature is that they are located in between everything else: the coast, the Himalayas, the south and the northeast. The total area of Central China (including Sichuan and Chongqing) is roughly 1.63 million square kilometers (630,000 square miles), which is smaller than the state of Alaska. But it is home 500 million people, roughly equal to the combined populations of the United States and Brazil.

Central China has four main parts (graphic). First is the area south of the Yangtze River, bracketed on the left by the Sichuan Basin and on the right by the coastal Wuyi Mountains, and comprised of the modern-day Hunan and Jiangxi provinces. Both center on river valley cores and are surrounded on three sides by mountains. Their only gateway to the rest of China is the Yangtze, which grazes their northern borders.

Moving north is the Yangtze Corridor, dominated by Chongqing municipality and Hubei province. Straddling the Yangtze River — designated by Beijing as one of two core axes for inland development (along with the Beijing-Guangzhou railway, which passes through Hubei's capital, Wuhan) — this region is more developed than the rest of Central China. Even so, most economic activity occurs along the river's banks between Chongqing and Wuhan cities, with the remainder of territory devoted to farming, forestry or simple industry.

To the northeast of Hubei sits the North China Plain, which is divided equally between Henan, Anhui and their more prosperous coastal neighbors Shandong, Jiangsu and Zhejiang (as well as the semi-coastal, semi-inland Hebei). This is China's traditional breadbasket, and aside from a few urban industrial hubs (such as Anhui's Wuhu, the home of China's largest auto manufacturer), most of the region is devoted to single-family farming plots.

Finally, abutting the North China Plain but separated by interlocking mountain ranges and opening backward onto the Loess Plateau are Shanxi and Shaanxi provinces. Most of Shanxi's population inhabits the Fen River Valley, which winds through the Luliang Mountains, while Shaanxi's largest cities and economy center on the Wei River, which curves along the Qinling Mountains' spine. These provinces make up the traditional core of China's coal industry and are essential suppliers of raw energy resources to Beijing and Tianjin, but they are relatively underdeveloped themselves.

Implications of Central China's Geography

The first challenge to developing Central China is its distance from the sea. Unlike coastal provinces, whose major economic centers abut the ocean and thus have direct access to global shipping lanes, interior China's geographic isolation from the coast makes export-oriented manufacturing in the region much less attractive. It is both slower and more costly to ship goods from inland Hunan or Anhui, for example, than from Zhejiang or Guangdong, often to the point of negating the lower cost of inland labor.

This is a problem for Beijing. As long as China's economy is geared toward export-oriented manufacturing rather than domestic consumption, it will be difficult to fully integrate central provinces as an economically feasible manufacturing base. But greater domestic consumption, seen by Beijing as the ultimate goal of economic restructuring and reform, will require both continued growth on the coast and development of the interior. Beijing is therefore trying to shift the economy inward by laying the groundwork for a domestic consumption base that does not yet exist.

Yet as long as the economy is fueled by exports, the vast majority of Central China's population (aside from a few flagship economic zones like Chongqing and Wuhan) will be left to support themselves much as they always have through subsistence farming and small industry. Central China's distance from the coast thus makes it much more difficult for Beijing to break away from the increasingly shaky export-led growth model, even as that model intensifies the very regional disparities Beijing hopes to fix.

The variability of Central China's geography only compounds the challenge of distance. Not only do these provinces fail to represent a coherent geographic unit in themselves, but internal divisions within many of them also make even local integration difficult. Most of China's interior provinces have highly imbalanced economic structures, with almost all secondary and tertiary industry centered around one city or a small cluster of cities (usually near a river), while the remainder of the province is left to localized subsistence farming.

This imbalance is not unique to inland China. Coastal provinces' economies are similarly centered on key urban industrial or shipping hubs, like Shanghai, Shenzhen and Wenzhou. But the problem is compounded in Central China by greater distances, both within the region and between it and the coast — still the heart of China's economy. Moreover, while the vast majority of coastal China lives in urban clusters along the coast, Central China's population is both very large and geographically dispersed. Linking that population together, and then into the national economy, will be significantly more difficult than it was to connect the east coast.

Even if inland China's major urban centers became manufacturing hubs and were integrated into the country's shipping and railway supply lines, distributing that development to the rest of the province would be difficult. For the foreseeable future, efforts to even out economic discrepancies between central and coastal China will likely force interior provinces to reproduce and intensify similar structural discrepancies (such as those between urban and rural areas) at home. Eventually, growth may spread widely, but it will take time, greater economic decentralization and better infrastructure.

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