High costs push industries to shift to China’s west and central areas
Print Edition
CHINA’S industries are shifting from the advanced east to landlocked west and central regions, with the government vowing to build on this to boost the economy.
The industrial shifts will help improve urbanization in central and western regions and enrich less developed areas, allow for employment and growth, and upgrade the Chinese economy, said Premier Li Keqiang at a State Council executive meeting he presided over on Wednesday.
During his visits to Africa and Europe in May and June, Li found that employment was high on the agenda for many countries. Jobless rates have been high in Europe, the US and developing countries.
For China, it is important to safeguard employment in central and western regions, he said.
In the past over 30 years, farmers have been flowing from the west to coastal areas for factory jobs. But those areas are now less competitive due to rising labor costs after years of growth.
A way out is to transfer some industries to western and central regions, Li said. But enterprises should by no means be forced into doing so. Companies should be attracted by low costs and a good business environment, he said.
Li cited an example he saw during his visit in Wanzhou District in Chongqing in April.
A manager of an e-commerce company told him that the business was first headquartered in Beijing, with an employee’s salary at about 8,000 yuan (US$1,285) per month. After the company moved to Wanzhou, an employee’s wage fell to under 3,000 yuan per month.
Despite this, the manager complained about Wanzhou’s insufficient infrastructure.
Li stressed infrastructure construction in western and central regions, saying that it would help improve the business environment and create opportunities.
Li also highlighted environmental protection during the industrial shifts.
Niu Li, an economist at the State Information Center, a government think tank, said the government should adopt policies to avoid overcapacity or damage to the environment during regional industrial shifts.
China’s economy rose 7.4 percent from a year earlier in the first quarter.
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