Upgrading competition is needed

A popular theory on China's development is that authorities should promote competition among counties, because competition will produce more efficient and rewarding results not only for the counties but also for investors.

The decision-making process at the county level is fast and flexible. But haste also makes waste. For example, many counties in China are very active in developing emerging industries and they depend excessively on favorable taxation policies, fiscal subsidies and policies settled by the central authority for these industries. They offer low-price land to attract investors and do their best to enlarge their industrial scale.

This kind of county competition is by no means the new growth point for China, because it causes waste and enlarges the risks and costs of these industries.

Statistics show that more than 100 Chinese cities label the "Internet of Things" as a key industry to develop. Many cities in China are developing seven to eight emerging industries at the same time.

The competition among Chinese counties and cities should be upgraded and transformed. This is an important part of China's transformation of its industrial structure and growth model. Otherwise, vicious and low-level competition will make the emerging industries no different from the old ones.

Translated by Li Yang from China Business News