Allow delta resources to flow freely

06/11/2003
China Daily

Resources in the Yangtze River Delta, including Shanghai, should be better integrated to promote the region's economic growth, an article in Jiefang Daily said.

The Yangtze River Delta includes Shanghai, Jiangsu and Zhejiang provinces, with a total population of 120 million living in an area of 210,000 square kilometres.

After years of development, the economic growth of Shanghai, China's financial centre, no longer solely depends on local resources. Its further development needs to utilize the massive resources of the whole Yangtze River Delta. And to expand its resource base, the whole delta region needs to prosper.

To economically integrate the Yangtze River Delta, resources must flow freely, the article pointed out.

It is estimated that in the next 15 years, the population of the delta could reach 150 million. If the regional economy grows by 10 per cent a year, in 2020, the annual gross domestic product per capita in the Yangtze River Delta will hit US$15,000. And the figure in Shanghai may reach US$25,000. By then, the Yangtze River Delta may have become a prosperous economic centre even by international standards.

However, to achieve this, some problems have to be solved.

The scattered use of resources under the traditional administrative system should be stopped and the free flow of resources across the region should be promoted to raise economic efficiency. To this end, policies need to be devised to shore up regional economic integration.

First, a comprehensive network of transportation should be established.

Transportation serves as the lifeline of the economy. The flow of productive resources mainly depends on a developed transport network across cities.

Currently, highways in the Yangtze River Delta are only one third the length of those in Britain and one sixth of those in Germany.

So there is an urgent need to remove administrative obstacles in building and managing highways in the delta area. Only with a modern highway network can resources in the area be better used.

Second, capital should be allowed to flow freely.

Income levels as well as investment opportunities and efficiency of fund use vary in different cities. And the faster the economy grows, the more opportunity there is to profit from investments.

Over recent years, the economy in Jiangsu and Zhejiang has grown faster than in Shanghai, while Shanghai has accumulated more deposits than the two provinces. The surplus funds in Shanghai could thus be better used if they were channelled into the two provinces. Short-term interbank loans are a channel for capital flow, but financial institutes and enterprises in the region need to co-operate more closely.

Administrative divisions should not interrupt the flow of cash in line with market demand, thus supplying sufficient capital for the economic growth of the region.

Third, allocation of human resources should be optimized by allowing people to move freely in the region. More professionals should be encouraged to go to other cities.

Statistics show cities outside Shanghai are in great need of more professional staff. In 2001, professionals at or beyond college level accounted for 10.9 per cent of Shanghai's local labour force. However, the figures in Jiangsu and Zhejiang were only 3.9 and 3.2 per cent respectively. In Shanghai, people with senior high school or technical school qualifications account for 23 per cent of its labour force. In Jiangsu and Zhejiang, the figures are only 13 and 10 per cent respectively.

Free and large-scale human resource flow is a prerequisite for raising labour productivity in the delta area. If Shanghai, Jiangsu and Zhejiang, could find a way of sharing labour skills, they could use human resources far more efficiently.