The central provinces of China, which are struggling to pluck their sinking economy up by the bootstraps, should work more closely with each other, a chief planning official said yesterday.

To encourage such integration, the National Development and Reform Commission (NDRC) is preparing to set up an office to help guide development in the central region, said Fan Hengshan, the director of the NDRC's Department of Regional Economy.

The regional office will be directly under the State Council, which is China's cabinet, and is expected to function like the State Council offices dedicated to promoting the development of the western and northeastern regions, experts said.

The move is in line with the State Council's strategy to encourage the "rise" of the central provinces Shanxi, Anhui, Jiangxi, Henan, Hubei and Hunan which are home to at least a quarter of the country's population, Fan said.

The last region to be covered by a national development plan, the central provinces have, in terms of per capita gross domestic product growth, lagged behind not only those on the eastern coast, which opened up in the 1980s, but also their neighbors to the west, which have benefited from a "go-west" scheme since the late 1990s.

The combined foreign trade volume of the country's six central provinces accounted for less than 3 percent of the national total in 2005. They are home to only 671 overseas-financed enterprises, or 5 percent of China's total, according to a development report published recently by the Social Sciences Academic Press.

Grain supply

Looking to harness the region's comparative advantages, the central government is planning to develop its commodity grain supply, energy and raw materials, modern equipment manufacturing and high-tech industries. The government will also build communication hubs there, according to the report.

The report also said that compared with China's west, it will be much cheaper to develop the central region's agriculture, energy and mineral resources.

And compared with the east, labor and land are much cheaper in the central provinces, making them an ideal destination for industries shifting from the eastern coast and from abroad.

The report said the six central provinces have for many years worked at cross-purposes, and regional protectionism has prevailed. And the industries that are active within the individual provinces tend to be similar to those in other provinces, rather than complementing them, according to the report, which was released two weeks ago in Beijing.

"Unity is strength, and coordinated they will rise," Fan said. "Unity and coordination are realistic choices that will lead to the revival of the central region."

He said the central provinces should step up regional integration by reforming their administrative systems to facilitate market competition and curb the amount of government interference in business.

Public finance

Fan said the region should set up a sound system of public finance to ensure local governments have the funds they need without having to make money by meddling in the affairs of businesses or closing local markets to outsiders.

Local-level leaders should realize the importance of mutual coordination and strive to build the central region into a unified market, where resources can cross provincial boundaries and flow freely to where they are most needed, he said.

By implementing a coordinated development strategy, the six provinces can standardize the design and construction of infrastructure projects, eliminate redundant production capacity and avoid cut-throat competition. Such steps will help the central provinces narrow the gap between themselves and the eastern coast, he said.

Zhao Lingyun, president of the Hubei Provincial Academy of Social Sciences, said he expected the coordinating body to come up with concrete policies for the growth of the region, perhaps by implementing some of the preferential policies used to boost development in West China and Northeast China.

Fan said that numerous supportive policies were in the pipeline for the central region, and that joint meetings among officials from the six provinces and other regional economic cooperation mechanisms were on the horizon.

However, even with outside support, the central provinces must rely on themselves to attain prosperity, he said.

(China Daily January 19, 2007)