Posted by: mulrickillion | February 7, 2012

Table-topping Guangdong Opts Out / 为汪洋式“示弱”叫好

Economic Observer News, Jan 17, 2012 —

Summary:The party boss in Guangdong, a province whose GDP would place it in the world’s top 20 nations, says he’s more concerned about realigning the economy than staying top of China’s ranking.

By Qi Yue (启越)
Nation, page 15
Issue No. 552, Jan 9, 2012
Translated by Zhu Na
Original article:

When it comes to reviewing cadres’ performance in 2011, the ranking comes down to one metric – gross domestic product – with every province seeking membership of the “trillion yuan club,” but the ultimate accolade is to finish top of the table, the place occupied by Guangdong.

The provinces’ battle for prominence doesn’t leave a trail of smoke, but even those officials who try to resist the race can’t help their nervousness at its conclusion.  

The top-placed province is in permanent fear of being overtaken by the second-placed province, which is permanently striving to be number one. The result of this obsession with GDP is that projects that ought to be started aren’t, and industries that ought to be shut down aren’t.

So recent comments by Guangdong party boss Wang Yang (汪洋) seem a little peculiar.

“We are now not going to fight this battle, you can overtake us if you want. The first thing we need to do is to restructure,” said Wang, who has seen Jiangsu close down his province’s lead at the top of China’s GDP table.

Wang’s remarks could usher in a new attitude to the rivalry between provinces.

Guangdong’s is the first province to surpass 5 trillion yuan in GDP, but its lead of 184 billion yuan over Jiangsu in the first nine months of 2011 shrunk and the province north of Shanghai is expected to overtake the one surrounding Hong Kong in 2017.

The reasons for Guangdong’s relative underperformance are numerous, including shrinking demand for exports, reliance on low-value-added manufacturing and failure to incorporate newer industries. However, it’s very unusual for local bosses to accept defeat in the way that Wang did.

The prevailing logic would have been for Guangdong’s boss to protect his province’s lead even though this meant retaining outdated production lines and neglecting new technologies.

That kind of growth is unsustainable, but can be relied upon by top officials who only have to serve one term at the head of their provinces.

Wang’s position, therefore, isn’t a surrender, but an act of bravery, taking responsibility for the longer terms prospects of the province that he was appointed to lead for the short-term.

“Excessive concern for total GDP may bring a temporary tactical victory, but if it means missing a chance for economic restructuring and industrial upgrading then it’s a complete failure,” said Wang.

Nor does opting out of the GDP race mean letting down the province’s people. In Guangdong for example rural incomes are growing at their fastest level since 1981, the income gap between rural and urban areas has been reduced and integration of migrant workers integration has improved.

These measures could be interpreted as Guangdong’s attempt to underdo the damage done during the province’s phase of breakneck growth as well as sharing the proceeds of growth more equitably.

More importantly though, Guangdong’s leaders appreciate that improvements to people’s welfare, reforms of the social management system and moves towards a service-orientated government – policies that are crimping GDP growth in the short-term – are the best way to guarantee prosperity in the long-term. 

In this respect, other local governments would do well to follow Wang’s example.

Table-topping Guangdong Opts Out – Economic Observer News- China business, politics, law, and social issues


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