Related News
Home » Opinion » Chinese Views
Moving industries to interior good for economy and migrants
By Mei Xinyu |
January 12, 2009, Monday
|
Print Edition
Print Edition
PROMOTING relocation of some industries from China's east coast to its central and western regions will enhance economic restructuring and upgrading and address social issues.
These are mainly traditional export-oriented industries on the coast that are gradually losing their competitive edge because of increasing costs.
It is widely acknowledged that China's economic growth mode needs further improvement, especially as the economy faces increasing shocks from the worst global economic crisis since the Great Depression of the 1930s.
There are two major issues: one is to improve trade efficiency, another is to reduce dependence on overseas demand by boosting domestic demand.
Promoting the relocation of industries contributes directly to improving trade efficiency and indirectly to increasing domestic demand.
Improving trade efficiency requires both upgrading trade commodity structure and optimizing trade patterns.
The east coast bears the greatest responsibility here.
Densely populated and limited in area, coastal regions must transfer out those industries that are no longer competitive to make way for advanced manufacturing industries and the emerging service industry.
The target areas for the transfer are China's middle and western regions, or other developing countries.
Based on China's overall interests, moving to the interior is preferable. As nearly half of China's export-oriented enterprises are foreign-invested, China would lose profits if they were moved to another country.
In fact, transfer of industries within China started several years ago and has been in full swing since the second half of last year. Industries that turned out popular products on the global market are moving at an accelerated rate to both the interior and to other countries.
The increasing rate of investment in central and western regions has greatly exceeded that in coastal regions ?? clear evidence that the worsening global economic crisis has made such relocation urgent.
Many manufacturing enterprises in eastern have already gone bankrupt. Stiff price competition and lower profits are forcing retailers and manufacturers of advanced products, once insensitive to cost reduction, to cut costs by transferring operations or change the sourcing of products.
Indeed, a high percentage enterprises in the east are export-oriented. Relocating them might seem to contradict the objective of reducing China's dependence on overseas demand by boosting domestic demand.
However, the objective can be realized either by reducing exports or increasing domestic demand faster than overseas demand.
More jobs
Clearly, a rapid increase in domestic demand is preferable. After all, people must earn money before they can spend it, and sustaining growth of overseas demand will no doubt lead to increasing domestic demand.
Industrial relocation will create more jobs in the west and central areas, thus relieving social problems caused by the surge of migrant workers from western to eastern China. These include the problem of educating children left behind in rural areas, the rare chances for family reunion, and so on.
The good news is that the Ministry of Commerce has just set up its second Industry Transfer Promotion Center in Shanghai. The first one is in Kunshan, Jiangsu Province.
The centers provide a platform for middle and western regions to encourage investment, conduct business negotiations, reach out to other regions, and provide a channel for coastal enterprises to locate suitable new locations.
But if the centers are to be effective, central and western regions must improve their investment environment by improving infrastructure, management efficiency and other elements.
(The author is a senior researcher in the Ministry of Commerce. The views are his own. He can be reached at www.meixinyu.com.)
These are mainly traditional export-oriented industries on the coast that are gradually losing their competitive edge because of increasing costs.
It is widely acknowledged that China's economic growth mode needs further improvement, especially as the economy faces increasing shocks from the worst global economic crisis since the Great Depression of the 1930s.
There are two major issues: one is to improve trade efficiency, another is to reduce dependence on overseas demand by boosting domestic demand.
Promoting the relocation of industries contributes directly to improving trade efficiency and indirectly to increasing domestic demand.
Improving trade efficiency requires both upgrading trade commodity structure and optimizing trade patterns.
The east coast bears the greatest responsibility here.
Densely populated and limited in area, coastal regions must transfer out those industries that are no longer competitive to make way for advanced manufacturing industries and the emerging service industry.
The target areas for the transfer are China's middle and western regions, or other developing countries.
Based on China's overall interests, moving to the interior is preferable. As nearly half of China's export-oriented enterprises are foreign-invested, China would lose profits if they were moved to another country.
In fact, transfer of industries within China started several years ago and has been in full swing since the second half of last year. Industries that turned out popular products on the global market are moving at an accelerated rate to both the interior and to other countries.
The increasing rate of investment in central and western regions has greatly exceeded that in coastal regions ?? clear evidence that the worsening global economic crisis has made such relocation urgent.
Many manufacturing enterprises in eastern have already gone bankrupt. Stiff price competition and lower profits are forcing retailers and manufacturers of advanced products, once insensitive to cost reduction, to cut costs by transferring operations or change the sourcing of products.
Indeed, a high percentage enterprises in the east are export-oriented. Relocating them might seem to contradict the objective of reducing China's dependence on overseas demand by boosting domestic demand.
However, the objective can be realized either by reducing exports or increasing domestic demand faster than overseas demand.
More jobs
Clearly, a rapid increase in domestic demand is preferable. After all, people must earn money before they can spend it, and sustaining growth of overseas demand will no doubt lead to increasing domestic demand.
Industrial relocation will create more jobs in the west and central areas, thus relieving social problems caused by the surge of migrant workers from western to eastern China. These include the problem of educating children left behind in rural areas, the rare chances for family reunion, and so on.
The good news is that the Ministry of Commerce has just set up its second Industry Transfer Promotion Center in Shanghai. The first one is in Kunshan, Jiangsu Province.
The centers provide a platform for middle and western regions to encourage investment, conduct business negotiations, reach out to other regions, and provide a channel for coastal enterprises to locate suitable new locations.
But if the centers are to be effective, central and western regions must improve their investment environment by improving infrastructure, management efficiency and other elements.
(The author is a senior researcher in the Ministry of Commerce. The views are his own. He can be reached at www.meixinyu.com.)
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
