Xinhua Insight: Central Chinese provinces poised to prosper with new plan

Six Chinese provinces in central areas, the country's heartland for coal and grain, will get a new impetus for growth as the government enacts a plan for the next five years.

The State Council Wednesday passed a plan to boost development in the central region for the 13th Five-Year Plan period (2016-2020), saying the rise of the region is of great importance to China's medium-high economic growth.

The central region comprises of six provinces -- Henan, Shanxi, Hubei, Anhui, Hunan and Jiangxi. These areas have rich land and agricultural resources, a large population, and are developing fast as hubs of modern manufacturing and transport.

About 360 million people, nearly a quarter of the Chinese population, live in the six provinces. In 2015, the region contributed 20.3 percent of China's total GDP, while the figure was only 18.8 percent in 2005.

To boost the central region's development, major tasks for the next five years include further opening up, transfer of industries from developed coastal regions to the central region, as well as poverty reduction.

URBANIZATION

"Henan, like other central region provinces, is strong in agriculture. But in recent years, it has seen growing manufacturing industries," said Sun Tingxi, director of the Henan Development and Reform Commission.

With a population of over 100 million, the number of people living in urban areas in Henan, a major grain producer, was 46.8 percent in 2015, far lower than the country's average of 56.1 percent. The province aims to raise the rate by ten percentage points by 2020, with 11 million rural residents moving to cities.

The urbanization rates of Hunan, Jiangxi and Anhui provinces, are 50.9, 51.6 and 50.5 percent, respectively, are all lower than the country's average, indicating huge potential for urbanization.

Urbanization and industrialization are two engines for the central region's development, said Nie Huihua, an economics professor at Renmin University of China.

The plan also aims to promote the integration of industries and regions, said Xu Fengxian, an economics researcher with the Chinese Academy of Social Sciences.

Among the seven new free trade zones (FTZ) approved in August, two are in the central provinces of Henan and Hubei, which will push the reform and opening up of the region.

With the FTZ, Hubei will play a symbolic role in the rise of the central region and become a key growth area in the Yangtze River Economic Belt, said Zou Wei, a professor at Wuhan University.

NEW SOURCE FOR GROWTH

Anhui is proud to have famed quantum physicist Pan Jianwei teaching at the University of Science and Technology of China, which is based in the provincial capital Hefei.

Pan is behind the world's first quantum satellite, which was launched in August this year.

Anhui has been boosting technological prowess of its research institutes and companies.

"Our province is known for agriculture and migrant workers. But these economic pillars have weakened, and we need to find new sources of growth," said Li Jinbin, Communist Party chief of Anhui.

Anhui has amassed funds and devised policies to support such scientific and technological projects, he said. Last year, more than 1.5 billion yuan (about 220 million U.S. dollars) of government subsidies were given to research institutes and companies in Anhui to support basic research, patents and new production chains.

From 2011 to 2015, the number of hi-tech firms in Anhui nearly tripled to reach 3,175.

Another central province Shanxi is also keen to see the new national strategy to boost its economy, which underwent immense difficulties in recent years due to low energy prices.

The coal industry remains a pillar for Shanxi as it is struggling to find a new growth model.

There have been policy favors for both the east and west, but provinces like Shanxi are stuck in the middle and benefit from neither, said Geng Yeqiang, an economic professor at Shanxi University.

The new plan is exactly what Shanxi needs to maintain growth and control default risks, he said.

Shanxi has prepared itself to host companies that are engaged in processing trade in the coastal areas, he added. Endi