The Great Western Development is a critical strategic decision for our country to narrow the gap of development amongst the East, the Central, and the West and to finally achieve the goal of common prosperity, and hence the project holds a meaningful influence to the West and the rest of the country.”

- Premier Wen Jiabao

It is no secret that the west of China is a land of poverty. According to a study conducted by the Asian Development Bank, “in the Western Region [of China], both urban and rural income, especially the latter, are below the national average” and that 61.7 percent of the 16.4 million counties in the Western Region were categorized as “poverty counties” by government standard in 1999 . And as the rest of the country continues to enjoy higher rates of growth than the western provinces, it is almost unquestionable that the Chinese government, according to Premier Wen Jiabao, considers the Great Western Development (Xibu Dakaifa) as a “critical strategic decision” and as a “great project to alleviate poverty.”

Josh Schrei, a director of Students for a Free Tibet, describes the inauguration of China’s Great Western Development: “In October 2000, an international economic conference was held in Beijing. Among the invited guests were Oil company representatives, World Bank executives, members of the media, China Communist party officials and a host of international businessmen and businesswomen. The conference was the inauguration of Xibu Dakaifa, the Chinese government’s Great Western Development plan – a massive [effort] designed to attract foreign investment and build infrastructure in the poor western regions of China.” Oil company representatives and international businessmen – are these the appropriate people to whom China should look to carry out its “great project to alleviate poverty”?

Since the inauguration of the Great Western Development, “the market has been flooded with books [that] have addressed the western region as a whole or in part from a variety of perspectives,” and many scholars in the field have analyzed the project from conventional macroeconomic perspectives. Emphasis is placed on such issues as financial investments, market efficiency, resource mobilization, transportation, infrastructure, and technology. Indeed, all these macroeconomic factors are vital to any development process, yet the development of China’s west is far too complicated and unique a matter to be generalized by some conventional macroeconomic approaches. “It is a huge, complex, and systemic project,” according to Professor Y.M. Yeung of the Chinese University of Hong Kong, “that demands vast inputs of resources, political will at every level, and the support of people within and outside of China.” In other words, the Great Western Development is a multi-dimensional issue that involves not just economic but political and social concerns.

One important fact about China’s Western Region is that it cannot be viewed as a unified entity. It is a culturally diverse region where the situation in one village could be drastically different from that of even its closest neighbor, and hence it is dangerous to treat the Western Region as a unified entity and to have policies “imposed from the top down and failing to address key local needs” . Especially in rural areas, where “villagers thought and acted on the basis of inherited institutions and values of lineage, religion, and village, of traditional norms embedded in cherished customs,” unified policies imposed from the top down are usually incompatible in many local areas.

Because most parts of China’s Western Region are made up of remote and hilly areas that have been virtually isolated due to the household registration (hukou) system, everyday lives in most Chinese villages are highly dependent on their own local cultures and networks. “Political culture [and] local networks,” according to Friedman, Pickowicz, and Selden, “were too deeply structured to be readily destroyed by particular policies,” and this is particularly true in the Western Region because villages tend to be more remote and isolated geographically. Thus, policies that are set from a macro-perspective would most likely be impertinent to many local situations.

Moreover, because many rural villagers in the Western Region are still living on the margin of subsistence, it is worrisome that some policies imposed from the top down could perhaps be “extremely detrimental to people living in the western regions.” For instance, the Asian Development Bank reports that “average household size in the Western Region poverty counties is higher, and the higher ratio of household members to workers partly contributes to the lower per capita incomes [in those counties].” A central policy that blindly encourages rural villagers to participate in constructing urban infrastructure may sharply reduce the productivity of these “poverty counties” and push those unproductive household members to live below the subsistence level.

Such situations are not unprecedented in the history of contemporary China. In the early phase of Chairman Mao Zedong’s Great Leap Forward campaign from 1958-61, agricultural production in many provinces across counties fell dramatically, while industrial output was still on the rise. In Hunan, for example, gross domestic output (GDP) of primary industries experienced a 48.9 percent drop from 1958-59 , while GDP of secondary and tertiary industries was rising rapidly in the same years because productive laborers were drawn from the fields to join the steel production campaign. On the macro-level, the GDP of the province rose by 9.84 percent from 1958-59, but starvation began to hit most rural villages, whose villagers were living on the margin of subsistence to begin with, as agricultural production fell.

Thus, aggregate economic development may seem positive on the surface. However, certain policies set from a macro-perspective may be extremely detrimental to local people, particularly those who are living in rural areas at the subsistence level, if local situations are not taken into serious consideration. Therefore, while China’s Great Western Development aims at bringing prosperity to the entire Western Region, attention and priority must be placed on policymaking and execution at the local level, while macro-level policies should be viewed as complements to those that are specific to local areas. Instead of perceiving the Western Region as a unified entity that will undergo a single economic development effort, the region should be seen as an aggregate of millions of unique areas that each require specific development policies set from a micro-perspective.

Another important fact to note about China’s Western Region is that unlike regions in many other developing countries, its economic development is not stagnated and that average household income of the whole region has been rising steadily. The Asian Development Bank acknowledges that “the [PRC] government has had considerable success in reducing poverty, especially rural poverty,” yet in the same study it is shown that a “widening gap between rural and urban incomes points to rising inequality.”

The findings of the Asian Development Bank explain why, while big cities like Chongqing are enjoying the virtues of rising capital investments and modernization, “poverty in remote, hilly areas is widespread and intractable.” The widening gap between income groups in the Western Region points to a critical flaw in China’s Great Western Development campaign – that its attention is paid to economic advancement rather than to the problem of allocation.

China’s Western Region is not a piece of scrap paper. Rather, social, political, and economic circumstances have been “crystallized” in “shapes” of regional inequalities, and these “shapes” are not likely to be manipulated through some general economic development policies. As Professor Y.M. Yeung quoted Wang Shaoguang and Hu An’gang: “When the government has no intention to reduce regional disparities in the country, regional gaps are unlikely to narrow … Only when the state is both willing and able to intervene on behalf of poor regions may regional disparities decline.” In fact, the potential success of the Great Western Development could very possibly be doomed if priority is placed on macro-economic advancement over the problem of allocation, as Wang and Hu further warn: “The government may be able to persuade people that some must get rich first so that everyone will eventually get rich. But if it persists in failing to distribute the gains from reforms more or less evenly, and if the gap between those who flourish and those who stagnate becomes unacceptably large, the moral foundations of the regime will be shaken.”

Especially when millions of people are still living on the margin of subsistence, resource and output allocation could turn out to be a life-or-death issue for many of those who live under severe poverty. Failure to effectively distribute resources and output across regions could possibly lead to such subsistence crises as those seen during the Great Leap Forward. During the Great Leap Forward famine, large-scale starvation in many rural villages erupted while crop yields were still increasing. This paradox demonstrates well the importance of resource and output allocation to those who live on the margin of subsistence over the performance of economic development in the grand scheme. People have to eat before they attempt to get rich – and hence it is critical to create an effective and fair system of allocation and to consider its success as a prerequisite to any sort of economic advancement.

Another critical flaw in much existing literature on the Great Western Development is that many scholars have been looking at the project from purely economic perspectives. The shortcoming of such literature is that it fails to acknowledge the simple fact that policies in China are ultimately political decisions at every level, and that conventional western economic theories are usually not applicable in the Chinese economy.

Thus, the ultimate success of the Great Western Development will depend entirely on how political institutions, particularly those on the local level, behave. A similar argument, though in a different context, is made by Professor Gary Jefferson of Brandeis University and summarized by Steven M. Goldstein: “Gary Jefferson has suggested that much of the reform initiative has come from the ‘bottom up’ as the central party/government restricts its role to ‘enabling reforms’ dependent on ‘local initiatives.’ In this view an understanding of the course of China’s economic reform requires a perspective that goes beyond a preoccupation with reform strategies to include ‘initial institutional conditions.’”

Professor Jefferson’s notion of including “initial institutional conditions” in the study of China’s economic reform leads to a broader concept of “path dependence,” which is “part of a broader approach known variously as ‘institutionalism’ or ‘historical institutionalism’ whose fundamental hypothesis is that ‘institutions are not just another variable … [rather they] structure political situations and leave their own imprint on political outcomes.’ Institutions are ‘sticky’ and institutional inertia means that ‘history matters,’ as the ‘shadows of the past’ embodied institutional arrangements continue to shape present possibilities.” If this hypothesis of the concept of “path dependence” is confirmed, then political institutions, rather than economic policies, should become the foremost important issue in the Great Western Development.

Indeed, according to Joseph Fewsmith, “there is a growing belief in China today that social issues (as well as other such related issues as corruption) cannot be effectively addressed without political reform of one sort or another.” In particular, it is evident that political institutions at the local level are not ready to take on the challenge of the Great Western Development. Linda Jakobson concludes that “grassroot political institutions [in Chinese villages] were in disarray. Relations between villagers and village officials were rapidly deteriorating … Arbitrary control by clans and secret societies was on the rise. A State Council report in early 1992 warned that 30 percent of the Party cells in the countryside had collapsed. Another 60 percent were extremely weak and disorganized.”

Professor Ralph Thaxton, Professor of Political Science at Brandeis University, gives insight on how Party leadership in Chinese villages has evolved through the Great Leap Forward and the Cultural Revolution, which further supports the need for institutional reforms before carrying out massive economic projects in the Western Region: “[The] arbitrary, brutal, and corrupted work-style [of local cadres during these periods] … had defined the work-style for the local parties for years to come.” Indeed, without the appropriate political institutions as prerequisites, any economic development plans are doomed to fail in China’s Western Region, where politics is still the most decisive factor in any social issue.

From an overall perspective, the success of China’s Great Western Development depends entirely on how the problems of allocation and political institutional reforms are solved from a micro-perspective. Only after such prerequisites are met may the government’s plans of macroeconomic development be implemented successfully and meaningfully.

Tak-Hin Benjamin Ngan (2005) is a final year student at Brandeis University majoring in Economics and Politics and minoring in Mathematics.

1. Zong Hairen, Dixidai (Hong Kong: Mirrorbooks, 2002), p.162. Translated from Chinese.

2. Asian Development Bank, “The 2020 Project: Policy Support in the People’s Republic of China,” p.99.

3. Asian Development Bank, “The 2020 Project: Policy Support in the People’s Republic of China,” p.102, Table 5-9.

4. Zong Hairen, Dixidai (Hong Kong: Mirrorbooks, 2002), p.162. Translated from Chinese.

5. Josh Schrei, “The Dark Side of China’s Western Development Plan,” China Brief, 2:7 (March 28, 2002).

6. Y.M. Yeung and Shen Jianfa, “Preface,” Developing China’s West (Hong Kong: The Chinese University Press, 2004), ed. Y.M. Yeung and Shen Jianfa, p.xv.

7. Y.M. Yeung, “Introduction,” Developing China’s West (Hong Kong: The Chinese University Press, 2004), ed. Y.M. Yeung and Shen Jianfa, p.16.

8. Tibet Information Network, “China’s Great Leap West,” Introduction.

9. Edward Friedman, Paul G. Pickowicz, and Mark Selden, Chinese Villages, Socialist State (New Haven: Yale University Press, 1991), pp.268-269.

10..Edward Friedman, Paul G. Pickowicz, and Mark Selden, Chinese Villages, Socialist State (New Haven: Yale University Press, 1991), p.268.

11. Tibet Information Network, “China’s Great Leap West,” Introduction.

12. Asian Development Bank, “The 2020 Project: Policy Support in the People’s Republic of China,” p.102.

13. Hunan’s GDP of primary industry fell from 26.65 yi yuan to 13.60 yi yuan during 1958-59, whereas that of secondary and tertiary industry rose from 39.13 yi yuan to 48.67 yi yuan in the same period. Source: Department of National Economic Accounting State Statistical Bureau of the People’s Republic of China, The Gross Domestic Product of China, 1952-1995, (China: Dongbei University Finance and Economics Press, October 1997).

14. Asian Development Bank, “The 2020 Project: Policy Support in the People’s Republic of China,” p.100.

15. Asian Development Bank, “The 2020 Project: Policy Support in the People’s Republic of China,” p.99.

16. Y.M. Yeung, “Introduction,” Developing China’s West (Hong Kong: The Chinese University Press, 2004), ed. Y.M. Yeung and Shen Jianfa, p.20.

17. Y.M. Yeung, “Introduction,” Developing China’s West (Hong Kong: The Chinese University Press, 2004), ed. Y.M. Yeung and Shen Jianfa, p.15.

18. Y.M. Yeung, “Introduction,” Developing China’s West (Hong Kong: The Chinese University Press, 2004), ed. Y.M. Yeung and Shen Jianfa, p.15.

19. Steven M. Goldstein, “China in Transition: The Political Foundation of Incremental Reform,” The China Quarterly No.144 (December 1995), p.1110.

20. Steven M. Goldstein, “China in Transition: The Political Foundation of Incremental Reform,” The China Quarterly No.144 (December 1995), p.1111.

21. Joseph Fewsmith, “Elite Responses to Social Change and Globalization,” Governance in China (Oxford: Rowman & Littlefield Publishers, Inc., 2004), ed. Jude Howell, p.31.

22. Linda Jakobson, “Local Governance: Village and Township Direct Election,” Governance in China (Oxford: Rowman & Littlefield Publishers, Inc., 2004), ed. Jude Howell, pp.100-101.

23. Ralph Thaxton, “Link between the Great Leap Forward and the Cultural Revolution,” (lecture), Seminar in Contemporary Chinese Politics, Brandeis University, March 12, 2004.