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NW Provinces: Join Forces to Develop Trade

In recent years, northwest China's Shaanxi, Gansu, Ningxia, Qinghai and Xinjiang have witnessed rapid development of foreign trade. However, progress has been extremely uneven amongst them and overall levels remain low.

To solve this, experts say they should integrate their industries and resources to exploit each other's strengths. This would enhance development and narrow the gap in terms of foreign trade volume and quality between the northwestern and eastern regions.

In 2003, growth rates in trade volume were 77.21 percent and 72.40 percent in Xinjiang and Qinghai respectively. The rates in Gansu and Ningxia were 10 to 40 percentage points higher than the national average growth rate.

However, overall foreign trade levels in the region are still relatively low; it accounted for only 1.36 percent of the country's export volume in 2003.

Experts say similar trade patterns and too few commodities have hindered the five areas from complementing each other, resulting in a comparatively low foreign trade level for the whole region.

Last year, the top ten import and export commodities in the five areas were all concentrated within three categories, textiles, base metals and electrical equipment, whose export accounted for nearly 50 percent of total volume.

Apart from Xinjiang, which relies on border trade, they depend mainly on raw and basic materials. This is in contrast to the national pattern where, from 2001 to 2003, trade in processed goods accounted for over 50 percent of foreign trade.

This shows the region still lags behind in terms of becoming an export-oriented economy, according to Chen Jianxin, chief of the General Affairs Division of Lanzhou Customs.

A region's economic development is closely related to its level of foreign trade. According to Professor Tian Qiusheng from Lanzhou University's School of Economics, very few of the northwest's products are competitive in the international market.

The way to improve trade patterns is to develop processing industries and extend the industrial chain, said Tian. Shaanxi and Xinjiang have made some progress in doing this in recent years.

Shaanxi has made great efforts to develop hi-tech products and Xinjiang has taken advantage of its geographical location. Compared to the rest of the region, export commodities in these two are more diverse and their export structure relatively rational. Commodities whose export value exceeds US$100 million include electromechanical equipment, textile raw materials and textile products, mineral products, plastic rubbers and plastic rubber products, furniture, etc.
The northwest region possesses many mineral resources not found elsewhere. Many experts say the profitability of resource-based products depends on processing depth. Manufacturing companies should discard the idea that resource-based products are low-profit and extend processing. By expanding and strengthening several industries, such as the oil industry in Xinjiang, the tourism industry in Qinghai and the aluminum industry in Gansu, the northwest region could integrate its export resources.

Experts also suggest that the region should bring Shaanxi's advantages in technology and human resources into full play to help integration and take advantage of Xinjiang's borders with central Asia and Russia.

Industrial restructuring is going on in eastern China by improving technical levels and reducing circulation costs. If the northwest takes advantage of its rich natural resources, abundant manpower, low labor cost and cheap land, and if it improves infrastructure and introduces preferential policies to absorb investment, the region could enhance foreign trade and encourage capital flow from the east to the west.

(China.org.cn by Yuan Fang, November 29, 2004)

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