When the State Council issued Opinions on Planning Major Functional Area China began steering a new course for its regional development policy.

The key concern of the Opinions focuses on environmental capacity. The 11th Five Year Plan first voiced their trepidation when they divided the country's vast landmass into four categories. Each region is allocated for various degrees of development, i.e. areas for encouraged, modest, restrictive and prohibitive development.

Switching of ideas

Academic circles now agree that China's sustained economic takeoff during the past three decades has benefited from heated competition generated among different local governments. From the "go west" campaign, to "revitalizing the northeast"movement and the "rise of central China" crusade, dazzling development programs have sprouted up, one after another. "Development zones" are everywhere.

"The problem with this kind of regional scale-based growth is that it is achieved at the expense of environment and land", said Xiao Jincheng, vice president of China Regional Economy Institute. "China boasts a huge territory with distinct regional differences. Is it really necessary to speed up economic progress everywhere?" he questioned.

The central government's answer is no. As stated in the Opinions, agricultural areas and areas with rich mineral resources but weak ecological capacities shall be restricted for further development. Natural reserves of all kinds are prohibited from being developed.

Regions displaying growth potential and having a strong environmental capacity are encouraged for development. The Yangtze River delta, the Pearl River delta and other well-developed coastal areas are no longer cost-effective for labor-intensive industries due to the unprecedented shortage of real estate as well as mounting environmental pressures.

The new policy advocates an important new trend: economic areas should no longer be defined by geography. Instead, all four categories can now coexist within the same region.

This has generated a huge headache for the politicians and scholars who are responsible for re-designing masses of relevant procedures and guidelines to enact the new edict.

The Opinions lists seven areas for policy adjustment. They are: finance, investment, industry, land use, population, environmental protection and government officials’ work performance evaluation.

It also supported a previous goal for balanced distribution of public services. The importance of improving the infrastructure and eco-environment for areas restricted or banned from development through transfer payment regulations was also reiterated.

In addition, all areas must tighten up their land use policies, according to the Opinions.

Academic debates fade away

Just like the failed "Green GDP report" that came out not long ago, the concept of a "functional area" has triggered heated debates in political and academic spheres. Xiao believes that these kinds of procedures are easier said than done. He added that the key lies in implementation.

Despite all these difficulties, the central government is resolute.  As a series of environmental and ecological problems have surfaced in the recent past, politicians and researchers are left with no choice but to take action.

The game is on

With the issuance of the Opinions the fight for power has begun among all the overlapping authorities. There is no doubt that this struggle will test the central government's resolution.

Dissenting opinions exist on local levels as well. Unlike prosperous coastal areas, some resource-rich provinces that have benefited from the "go west" initiative do not welcome the new policy.

"Just look at the facts. Before the western regions began to develop, inadequate power supplies created a major bottleneck holding back our country's economic growth. But just within seven years, the capacity of our current power plants has now exceeded the combined total for the last ten years. The situation has been completely reversed," said a local official of a province containing abundant resources.

"The plan is a touchy one because it impacts on the interests of many different groups," commented an expert working on this project. "The final decision must take political interests, ethnical solidarity and national defense all into consideration."  

(China.org.cn by Zou Di August 16, 2007)