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Beijing to support less-developed neighbours

By Yu Tianyu (China Daily)
Updated: 2008-04-14 13:07

In Laishui, a small town in Hebei province about 10 km from Beijing, residents aren't benefiting from the booming economy like their neighbors in Beijing and Tianjin. Instead, they suffer in poverty.

"We feel so far from Beijing. The path of economic development is very tough," says Wang Shuri, Laishui county's deputy head.

Laishui is located in a "poverty belt" that encircles the greater Beijing-Tianjin area, including the Hebei cities of Zhangjiakou, Chengde, Baoding and Cangzhou.

But now officials from both the province and two municipalities are striving to deal with economic unbalance and poverty.

Previous reports show that the poverty belt formed slowly during the years after the start of China's reform and opening up, creating 32 impoverished counties, with 2.7 million people.

According to statistics from the China National Democratic Construction Association (CNDCA), the fiscal income per capita of 25 key poverty counties located in the cities of Zhangjiakou, Chengde and Baoding is 176 yuan ($25.14), equal to only 10 percent of that in 15 counties affiliated with the Beijing municipality.

The GDP per capita of those areas amounts to 6,325 yuan, equal to only 25 percent of the 15 counties in Beijing in average.

Because of its geographic location neighboring Beijing and Tianjin, key areas for China's reform and development, the area was required not only to contribute their resources -- mainly water resources -- to support the construction of Beijing and Tianjin, but it also had to give up some industrial projects to ensure the whole area's environment.

Hebei province, where the poverty belt is primarily located, has long been serving as an ecological protective barrier for Beijing and Tianjin municipalities to stop sandstorms and purify and supply water.

About 81 percent of Beijing's water supply and 93 percent of Tianjin's depends on Hebei.

The province is also a backup emergency water supply for the Beijing Olympic Games.

To ensure a pure water source for Beijing and Tianjin, the belt has been forced to abort forthcoming projects and suspend existing ones that are environmentally unfriendly. It has also restrained the areas from rapid industrial development.

According to Xiao Jingcheng, a senior researcher for land development and regional economics with the National Development and Reform Commission (NDRC), the problem is that China hasn't carried out a policy of environmental-protection-expenditure compensation.

The central government, local authorities and citizens are all concerned about ecological conservation, fiscal income and better living conditions. But without proper coordination, the goals cannot be realized. The area finds itself in a complicated situation -- on the one hand there are 32 poverty-stricken counties with 2.7 million poor people, and on the other hand, ecological projects encumbered by the poor economy.

In recent years, the eco-system, water supply and air quality of the two municipalities and the province have been increasingly threatened by ecological deterioration, drying rivers and lakes, disappearing wetlands and mountain springs, soil erosion and pollution, desertification and grassland degradation and frequent sandstorms.

With concerns mounting about the poverty belt, members of the Chinese Peasants and Workers Democratic Party (CPWDP) and the China National Democratic Construction Association (CNDCA) submitted solution proposals.

In the proposal submitted during the 11th Chinese People's Political Consultation Conference, the CNDCA suggested setting up an inter-regional compensation mechanism for water consumption and environmental treatment, in an effort to make up the belt's economic losses.

Under the mechanism, Beijing and Tianjin municipalities will be charged for using water supplied by the region and enjoying the benefits from the belt's environmental improvement projects.

Further, a more integrated mechanism is expected to be developed, including compensation for losses based on water resources, industrial development and ecological treatment.

A special fund will be launched for support of the mechanism, Xiao says.

To establish and optimize the mechanism, work will immediately be done to transfer payment system, water-resource pricing mechanism, legal system and compensation mechanism, Xiao adds.

"If we set up an inter-regional compensation framework for water-use, it would be a sound example for promoting such experience with other areas that are facing the same embarrassment," Xiao says.

After a one-year preparation effort, Beijing has launched a plan to support less-developed areas surrounding the capital early this year.

A special fund will be allocated by the Beijing municipal finance bureau to encourage and guide enterprises to carry out industrial cooperation, technological innovation and training professionals along with the counties adjacent to the capital, says Lu Yingchuan, deputy director of the Beijing municipal commission of development and reform.