Xinhua Insight: Guizhou seeks further opening up

The State Council approved on August 15 the establishment of an inland open economy pilot zone in southwest China's Guizhou Province.

It is the second pilot zone of its kind, with the first in Ningxia.

Chen Shaobo, director of the Guizhou provincial development and reform commission, said the decision will help Guizhou to further spur growth, open up, and bolster local anti-poverty efforts.

"Guizhou has been on a sound and healthy track of development in recent years, especially in building express railways, the development of the big data industry, public tourism and environmental protection," he said.

Guizhou is not near any sea, river or border area, said Ma Lei, deputy director of the Commerce Department of Guizhou.

"Yet as a less-developed inland province, it is transforming itself from an agricultural economy to an export-oriented economy; it needs to create a healthy business environment, facilitate investment and develop the financial market," he said.

According to the official document, the pilot zone will participate in the construction of the Belt and Road Initiative, the development of the Yangtze River Economic Belt, and international industrial capacity cooperation.

It will also explore new methods, fulfill poverty targets and integrate the ecological environment with the economy, in what will be the "new normal" for China's inland areas.

BREAKING BARRIERS

You cannot find three miles of land that are flat in Guizhou, a problem that the province has struggled with in recent years.

By the end of 2015, each and every county in Guizhou was linked by highways, and the province is building express rail lines connecting Guiyang, the provincial capital, to Chongqing, Chengdu and Kunming.

"Rapid development of transport networks have broken geographical barriers and pushed Guizhou to the forefront of opening up," said Ma.

Yuqing County, in central Guizhou, has a population of 300,000 and until recently has always depended on the production of tea, rice and traditional Chinese medicine.

Newly-built highways reduced Yuqing to Guiyang travel times from six hours to two hours. A nearby airport, which opened in 2013, now offers flights to the cities of Hangzhou, Guangzhou, Jinan and Wenzhou.

Tourism has taken off in Yuqing, and local officials have become more confident after industrial infrastructure was improved," said Tan Zheng, party chief of Yuqing.

Now the county has been cooperating with Shanghai to canvass for business in IT companies, investment firms and pharmaceutical companies.

Weng'an county, in central Guizhou, has rich phosphorous mines, but few companies tap the resources, due to poor transport networks.

In the last two years, four highways were built leading to Weng'an, and two fertilizer manufacturers will soon set up plants here and create jobs for about 1,000 people.

"When there were no roads, we had reason to sit and wait, but now the roads run through, we can move on and improve people's lives," said Huang Guilin, head of Weng'an county.

OPENING UP

In the last three years, Gui'an New Area has become home to businesses with operations totaling 192.6 billion yuan. Companies including IBM, HP, Qualcomm, Alibaba and Huawei have establish operations in the area.

As the country's first big data pilot zone and a pioneer of China's big data economy, Guizhou aims for big achievements in the industry.

In the future, Guizhou aims to nurture a group of 500 companies in the industry, including 10 leading global enterprises focused on big data application, services and manufacturing.

A growing number of companies are moving into a bonded area in Guiyang.

"Companies are swarming in, and offices are in great demand," said Huang Wenhao, assistant director of the bonded area.

The greatest lure of Guizhou is the low cost of labor, land and other expenses.

When Foxconn, Apple's top supplier, decided to set up operation in Gui'an in 2013, the minimum monthly wage was only 1,030 yuan (about 158 U.S. dollars), the lowest in China.

"Six million people are still living below the poverty line, and costs are not expected to rise fast in the future," said Ma.

"I never thought Guizhou was fit for developing an export economy, but the truth is that more companies are moving in, putting us in a more advantageous position even than Sichuan and Chongqing."

MORE EFFORTS

Despite development, cargo transport costs in Guizhou are 20 to 30 percent higher than those in neighboring provinces.

"The labor costs and rents are lower in Guizhou, but logistics still lag behind," said Wei Youbing, a musical instrument manufacturer and exporter in Guizhou.

Guiye Technology makes dinnerware, toys and electronics for companies, including Disney. It has moved its business from Shenzhen to Tongzi, in Guizhou, but most of its exports still have to go through Shenzhen.

"We planned to transport our products through a road and rail, or a river and rail network from Guizhou, but the routes either take too long or are not smooth enough," said company owner Zhou Fang.

"Guizhou cannot copy the road of development of the coastal provinces. It needs to find new solutions in solving problems, and show other inland provinces a new path for economic development," Ma said. Endi