2. The Regional Classification & Its Challenges in the Chinese Regional Policy System Wang Qingyun Prof. PH.D ( The Academy of Macroeconomic Research, NDRC ) Oct.8 2007 Brussels

3. Content China s Major Geographic Features The scopes of Chinese Eastern, Central and Western Regions and their Evolution The Different Policies Treatment among Chinese Eastern, Central and Western Regions The Challenges Facing Classification of Chinese Eastern, Central and Western Regions The prospect of Ratings of Chinese Provinces Based on their economic situation

4. China s Major Geographic Features Position: West: Coastal Areas East: Inland Altitude: West: High, Mountain, Plateau, East: Low, Plain, Hill Large Rivers go from west to east Climate: West: Drought, Grassland, Desert, Iceland East: Rainy, Arable Land, Fishing Pool Generally: West: Disadvantageous East: Advantageous

5. Map of China Topography

8. The scopes of Chinese Eastern, Central and Western Regions and their Evolution Chinese Seventh Five-year Plan: Eastern Region: 11 Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangshu, Zhejiang, Shandong, Guangdong(including Hainan), Guangxi. Central Region: 9 Shanxi, Inner Mongolia, Jilin, Helongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan. Western Region: 9 Shichuan including Chongqing, Guizhou, Yunnan, Tibet, Shaanxi, Guansu, Qinghai, Ninxia,Xingjiang. Note: Then totally 29 Provinces, Autonomous Regions and Municipalities in Chinese Mainland.

9. Classification of three Region

10. The scopes of Chinese Eastern, Central and Western Regions and their Evolution Since the year 2000 Eastern Region: 11 Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangshu, Zhejiang, Shandong, Guangdong, Hainan, Central Region: 8 Shanxi, Jilin, Helongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan. Western Region: 12 Shichuan, Chongqing, Guizhou, Yunnan, Tibet, Shaanxi, Guansu, Qinghai, Ninxia,Xingjiang. Inner Mongolia, Guangxi. Note:(1) Totally 31 Provinces, Autonomous Regions and Municipalities in Chinese Mainland after Hainan separating from Guangdong in 1988 and Chongqing separating from Shichuan in 1997. (2) Inner Monganil and Guangxi were incorperated into Western Region after the Western Development Program was launched in 2000

11. Classification of three Region

12. The Different Policies Treatment among Chinese Eastern, Central and Western Regions In terms of obtaining investment subsidies from central government For drinking water projects in rural area West: 63% (subsidy rate) Central: 45% East: 29% For water and soil conservation projects in rural area West: 2/3 ( subsidy rate ) Central: 1/2 East: 1/3

13. The Different Policies Treatment among Chinese Eastern, Central and Western Regions In terms of obtaining fiscal transfer from central government Taking salary increase for civilian servants as example West: 80% (from central fiscal transfer ) Central: 60% East: 0%

14. The Different Policies Treatment among Chinese Eastern, Central and Western Regions In terms of preferential treatment of corporate income tax Since the year 2000 West: 15% Central: 33% East: 33%

15. The Challenges Facing Classification of Chinese Eastern, Central and Western Regions Challenge one The Gap among provinces in Eastern Region more than that between regions Taking per capita GDP in 2005 as example Shanghai was 4.7 times of Hainan While Eastern Region was 2 times of Central Region, 2.5 times of Western Region Therefore it is unfair to some provinces like Hainan in Eastern Region

16. The Challenges Facing Classification of Chinese Eastern, Central and Western Regions Challenge two Some provinces in Western Region are more developed economically than that in Central Region Also taking per capita GDP in 2005 as example Per capita GDP of Chongqing was 109824.7, more than Anhui, Jiangxi and Henan in Central Region Therefore it is unfair to some provinces like Anhui in Central Region

17. The prospect of Ratings of Chinese Provinces Based on their economic situation Area unit: Province (Autonomous Region, Municipality ) Major Criteria: Per capita GDP and taking the factors of ethnic and size of area Number of Rating: Five See the result from the following table

18. GroupCriteriaProvinceNumber High Income Higher than 250 % of National Average Shanghai, Beijing, Tianjin3 Middle High Income Between 120 and 250 % of National Average Zhejiang, Jiangshu, Guangdong, Shandong, Liaoning, Fujian 6 Middle Income Between 119 and 75% of National Average Hebei, Heilongjiang, Jilin, Shanxi, Hubei, Chongqing,Hainan 7 Middle Low Income Between 74 and 65% of National Average Hunan, Shaanxi, Jiangxi, Henan, Shichuan 5 Low Income Lower than 65 % of National Average Inner Mongolia, Xinjiang, ningxia, Qinghai, Tibet, Guangxi, Anhui, Yunnan, Guansu, Guizhou 10

19. Another Classification of Area in China Poverty-Stricken Area or Underdeveloped Area Old Industrialized Area or Old Industrial Base Economic Expansion Area

20. Thank You