Index > Research
Monday, June 01, 2020
Revisiting Geo-Economic Values of the Yangtze River Economic Belt
Chan Kung

After 2020, China's development conditions and environment will undergo tremendous changes and China must seek out new and appropriate geostrategic solutions to accommodate such adjustments. We believe that as it is relative to China's economic development environment, the most critical strategic step now is to restart the construction of the Yangtze River Economic Belt on a large scale. Such a project should be based on high standards of environmental protection, and the focus should be on promoting the economic development of the western end of the Yangtze River Economic Belt and construct a balanced east-west economic space along the Yangtze River Economic Belt to hedge against the huge impact that will be caused due to great changes in the external environment on the Chinese economy. In addition, this can also balance China's economic growth, expand consumption space, and stimulate consumption growth, while promoting and achieving a healthy transformation of China's economy and society. Such an economic construction must be sequential because resources are limited; the construction sequence is not only determined by vision and blueprint, more importantly it is also decided by the changes and trends of the development environment. China is now facing a severe and very rare geopolitical situation, with high potential risks. The most developed export-oriented economic region of China's economy, that is, the southeastern coastal area, is under increasing pressure from the external market. This external pressure is transforming the institutional pressure mechanism, causing the living space of enterprises in the southeastern coast to become increasingly narrow and harder to rebound. Under this circumstance, expanding China's consumer market and tapping new market space has become a crucial policy point.

An important development policy of China, "Western Development", i.e. the development of the western region of China, has been proposed for many years, and now it has been strengthened again. In fact, China has recently released version 2.0 of the Western Development plan. The Yangtze River Economic Belt is also an important development strategy that has been proposed in the past. The problem and challenge is that as the external geopolitical situations becomes more complicated, the risk of austerity in the external market has greatly increased, and the economic development space of the original export-oriented economy may be under pressure, which requires China's development focus to be greatly adjusted. In the future, China will shift its focus primarily towards the Mainland market, as well as to the central and western markets of China.

How then, can China achieve such a policy shift? During the period of rapid growth in China, it is enough to provide policy development goals. Resources, including technology, industry, and capital, will follow the policy vision and goals one after another, and the investment of resources can be self-adjusted through market trial and error. Yet, the current situation is very different. The investment of resources will be increasingly restricted and restrained, because the increasingly obvious risk factors impose more restrictions, forcing technology, capital and industry to require clearer policy development goals and to locate practical policy paths. Thus, the regional development problems of the Yangtze River Golden Waterway began to appear. In this policy research report, we believe that if the development of the Yangtze River Golden Waterway can smoothly resolve the critical problem of the Three Gorges Dam, it will become the leader in the Yangtze River Economic Belt and in the development of the western region, as well as proving to be an effective means of opening-up the central and western markets of China. All these are conducive to the balanced development of the east and west ends of the Yangtze River Economic Belt.

Currently, the gap in GDP added value between the east and west ends of the Yangtze River Economic Belt in China is about RMB 12 trillion, and there is an obvious "two times difference". Once China has achieved a basic balanced development on the east and west ends of the Yangtze River Economic Belt, China, the market space in the central and western regions of China will gain a huge burst in development momentum. Not surprisingly, after the space in the western market matures, the added value of the new GDP in three years will be almost equivalent to the total scale of the current national local debt. The development space and potential are huge, and the prospects are extremely promising.

Through this policy research report, we hope to build and define a new type of development relationship between the Western Development, the Yangtze River Economic Belt and the Yangtze River Environmental Waterway based on geostrategy and redefining the original development concept. Under the new geographical situation, we aim to explore a new space for China's future economic growth, and more importantly, we hope this can provide a reliable and effective starting and breakthrough points to create and lay the foundation for the growth of China's overall public welfare supply.

Any findings, explanations, and conclusions in this policy research report are the opinions of the authors only. The policy research report is for policy reference only and does not reflect the views of any unit. Unless otherwise noted, the data in the report are public. The authors of this report cannot guarantee the complete accuracy of any data or information disclosed and are not liable for any consequences resulting from the use of such data by others.

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