Tag Archives: economic development

Report: “Mismanagement” stalling building projects across China

Work continues on the Darui Railroad in western Yunnan Image credit :cr8gc

Work continues on the Darui Railroad in western Yunnan. Image credit: cr8gc

Hundreds of highway and railroad projects are facing delays or otherwise running far behind originally envisioned construction timetables. This, according to a report issued by China’s National Audit Office, is a result of local governments improperly managing infrastructure funds — actions thought to have a direct effect on the country’s stalling economy.

In total, the audit of projects nationwide looked into 815 infrastructure programs across the country. More than 20 percent — 193 in total — were found “to be experiencing significant implementation lags due to a lack of funds or poor initial planning.” Together, the behind-schedule ventures represent government investment of 287 billion yuan (US$45.2 billion).

The architects of China’s economy have traditionally relied heavily on state-funded building projects as a means to revitalize the financial system in times of decline. Therefore, those lagging behind schedule due to mismanagement or misuse are seen as harming the economy in two ways, according to the audit. Not only are funds not being spent as quickly as they are authorized, but the benefits to localities through which new infrastructure projects pass must wait idly for any expected economic uplift.

In Yunnan, this is especially true in the province’s west. A railroad from Dali — traveling through Yongping, Baoshan, Mangshi and terminating at Ruili on the Burmese border — was originally expected to be completed in 2014. It will provide some of the most populated regions in western Yunnan direct rail access to Kunming for the first time ever. However, due to cost over-runs and awkward mountainous terrain, the line is now expected to open as late as 2019.

In an effort to speed up construction along the single-track Darui Railroad (大瑞铁路), Beijing injected a further five billion yuan (US$788 million) in annual funding for the endeavor beginning in 2012. The 335 kilometer railway is 75 percent tunnels and bridges, making for difficult surveys and slow progress, especially in places where engineers must dig under theGaoligong Mountains.

The railway was first conceived of in 1938 as a way to connect Kunming with the British colony of Burma. The outbreak of World War II scuttled those plans. However, they have since been resurrected as one part of the massive BCIM trade corridor, which Beijing hopes will one day provide an overland link between Kunming and seaports on the Indian coast some 2,800 kilometers away.

This post was originally published on GoKunming and written by Patrick Scally. It is reprinted here, in its entirety, with permission from the author. 

Leave a Comment

Filed under China, Economic development, Governance, SLIDER, Yunnan Province

Bright City Lights: Urban Trends and Futures in Southeast Asia

Traffic congestion in Bangkok

Traffic congestion in Bangkok

This year, Jakarta earned the unsavory title of “World’s Worst Gridlock.” The city of 23 million is now reputed for having to most congested streets in the world. Another Indonesian city, Surabaya, took the number four spot. If you continue down the rankings to number eight, you will find yet another Southeast Asian metropolis – Bangkok.

The tendency for gridlock in these cities is more than a daily inconvenience for residents. These levels of traffic congestion are indicators of a trend in the wider Southeast Asian region. In this part of the world, urban populations are growing faster than municipal and national governments can handle.  When managed sustainably, cities can be a valuable vehicle for economic development and socio-demographic transition. For example, cities can facilitate productive trans-border connections and slow birthrates, which enables more women to enter the workforce. Nevertheless, urbanization is a double-edged sword.

Rapid, unplanned growth results in unsustainable development that threatens social, economic, and environmental stability.  In a landmark report that analyzes 10 years of urbanization data from East Asia, the World Bank suggests that urbanization in East and Southeast Asia will have “long-lasting effects on the region’s social, economic, and environmental future.” Understanding the growth trends in Southeast Asia will boost the region’s ability to avoid the pitfalls associated with the rapid type of urbanization that has been observed over the past decade.  In other words, the region needs to pay attention to these changes if they don’t want to spend the rest of their down time stuck in traffic.

Dominant Urbanization Trends

Between 1990 and 2010, Southeast Asia increased its urban population by at least 12%, per United Nations estimates. The fact that Asian cities are growing is not a fresh realization, but few observers of these phenomena have questioned how these cities are growing, instead of just how big.

Screen Shot 2015-04-10 at 5.50.38 PM

For example, in the past 10 years, East Asia has experienced more urban growth in small- and mid-sized cities than in major metropolitan areas. This has several more nuanced implications for the region. Successful development in smaller metropolitan areas could relieve much of the pressure put on high-population areas. For example, a Thai development strategy used tax breaks to encourage people to take up residence in the regions outside of Bangkok . Unfortunately, the government failed to provide infrastructure and facilities to support business development in outlying regions. Bangkok remained the prime area for investment, and the program floundered.

Megacities like Bangkok often gain international reputations that afford them opportunities to advertise for foreign direct investment.Small and mid-sized cities, on the other hand, have to fight for attention and funding from national governments and lack the resources necessary to advertise to a wider range of investors. Take the case of Ho Chi Minh City and Da Nang, two metro areas in Vietnam. Ho Chi Minh City is the country’s largest city and Da Nang was only about an eighth of HCMC’s size in 2011. However, the rate of urban population change in Da Nang was 4.5% as of 2010 and HCMC was 3.9%. While this may appear to be a narrow margin between two cities, imagine the national impact when every mid-sized city in a country grows at this rate. The need for infrastructure would surely outpace the investment available to these smaller metropolitan areas.

laos.vte

In addition to major growth in small- and mid-sized cities, the fastest growth of urban population was experienced in East Asia’s low- and middle-income countries, namely Laos, Cambodia, and Vietnam. Japan, South Korea, and even Thailand place far behind these countries in their rates of urban land and urban population increase.

Screen Shot 2015-04-10 at 7.20.26 PM

The less developed countries in the region face administrative and financial challenges on a national level, which creates an environment where a single city in the country, often times the capital city, experiences the majority of the urbanization. The massive, resource-hogging cities that result are known as “primate cities” in the vernacular of urban studies scholars. Concentrating an entire country’s political, cultural, and economic capital in one area creates national vulnerability if there is a crisis in that single city.

Urban primacy is especially detrimental for a country when there is massive migration to the core and a development lag in the country’s periphery. This phenomenon plays out the same way in developing countries across the globe: Rural poor migrate to urban areas in search of better economic opportunities, but financially and administratively inept governments cannot provide migrants with adequate resources for finding jobs and homes. Densely populated and amenity-poor settlements result as migrants join the informal economy of the city.

Bangkok, Yangon, Phnom Penh, Vientiane, Jakarta, Manila, and Kuala Lumpur have all reached primacy within their respective countries. As previously mentioned, Bangkok is one city that has acknowledged its primate city status and attempted to reduce its dominance of Thailand’s geography. Countries such as Cambodia and Myanmar will also need to take steps to ensure that Phnom Penh and Yangon do not morph into unsustainable networks of unplanned settlements. The challenge lies in the fact that countries like Cambodia and Myanmar lack the administrative and financial capacity to shift rural to urban migration trends. However, it is promising that smaller cities in the region are doing most of the growth, even if they have a long way to go before they can compete with these metro areas.

Screen Shot 2015-04-10 at 5.24.48 PM

Finally, Southeast Asia’s urban populations are growing faster than the region’s urban land. At present, the main reason for dense urban growth in the region can be attributed to the lack infrastructure available on the periphery – a far cry from the smart growth policies that many cities implement to promote compact growth. Even so, high-density urban growth is associated with many positive outcomes when it is effectively provided for. Namely, high-density development tends to have fewer negative environmental consequences than urban sprawl. Kuala Lumpur is actually an exception to this trend in Southeast Asia, and has been criticized for failing to compact its urban growth. A heavy reliance on automobiles has been detrimental to the city, but other emerging urban areas in the region have the chance to get ahead of the car craze and promote smart growth that emphasizes efficient land use and practical transportation.

By and large, dense urban growth still has a number of caveats. As mentioned, the reason density in the region is high is due to a lack of amenities outside of core cities. If population growth outpaces the ability of the core to provide services, the quality of life in many cities will quickly degrade. Overcrowding is also a serious challenge that many cities in the developing world are faced with, and Southeast Asia is no exception. Comprehensive urban planning will be necessary to prevent overcrowding from becoming another major trend in the region.

Urban Planning and Governance: Missing Links

When you combine all of the formulas for urban growth in Southeast Asia, the results are two-sided: There is potential for inclusive, sustainable urban areas, but there is also a chance for the region to mushroom into a clutter of poorly planned development. When planning is neglected, poverty, environmental degradation, and land use conflicts ensure. For Southeast Asian cities to avoid falling victim to, say, the level of air quality degradation that many Chinese cities now face, spatial planning and good governance are crucial.

A 2009 assessment of urban governance prepared for UN Habitat is grim: the report asserts that the capacity of both local and national governments in the region is fragmented and weak, with a serious lack of simple management skills and adequate budgeting for necessary infrastructure. “Good” urban governance requires transparency, political will, and funding, but many Southeast Asian governments underperform in all three categories. There is always a propensity for countries to urbanize, regardless of political stability. With that being said, Southeast Asia’s urbanization trends alone illustrate that not all growth is good growth. A solid political environment at least ensures that there is a structure for discussing urban needs when they arise, although definitive actions need to be taken if there is going to be any change.

Administrative fragmentation is another burgeoning obstacle for Southeast Asian boomtowns. This term refers to the spillover of growth from one municipality into neighboring jurisdictions. One example is Manila’s urban area, which spans 85 municipalities and seven provinces. The World Bank predicts that many of the growing small- and medium-sized cities will soon experience this type of administrative challenge, if they are not experiencing it already.  Different jurisdictions often struggle to coordinate plans for infrastructure development and management, leaving many areas underserved.

The ecosystems impact of such trans-boundary urban areas is also notable because rivers, lakes, and forests require cooperative management.  Overcoming administrative fragmentation appears daunting in a region where political stability is scarce, but regional planning associations have proved to be an effective way to manage fragmented urban areas. The Metro Manila Development Authority (MMDA) is one such organization tasked with monitoring urban development, but it struggles with a low budget and limited regulatory power. Even so, the future of many urban agglomerations in the region would look brighter if such organizations were widely utilized. Urban management organizations have the ability to pull multiple institutional actors together when questions arise about different stakeholders’ opinions.

 Screen Shot 2015-04-10 at 7.26.18 PM

Urban Futures

Southeast Asia’s urban population has not yet reached 50% of total population, an indicator that more urban growth is still to come. The future of the region’s urban areas will in part be dictated by the trends that have been observed in the past decade, but also by events that remain to be seen. Climate change is one of the foremost worries in the region, but political stability and economic productivity will also play roles in the ability of the region’s cities to develop sustainably. Metropolitan areas in the region need to get ahead of urban growth and expansion in order to take some of the uncertainty out of the future.

Climatology experts maintain that no part of the world will remain unaffected by climate change, but Southeast Asia is actually a particularly high-risk area. A number of Southeast Asia’s urban centers falter in climate change scenarios that involve sea level rise, drought, saltwater intrusion, and severe weather events, and famine. As metropolitan areas in the region continue to develop, resilience is a topic that needs to be kept in mind. Cities like Bangkok and Ho Chi Minh need to have planes in place for flooding and typhoon events. Manila needs to ask itself how to feed a metropolitan area of 16 million if crop productivity plummets due to droughts or heat waves.

Besides the need for climate change adaptation measures, Southeast Asia also represents a large market for mitigation efforts. By reducing dependency on cars and carbon-based energy sources, the region can bypass being a part of the carbon problem. China and the West used coal to fuel their urban expansion, but Southeast Asia has the opportunity to exclude GHG heavy industries and develop using environmentally sound technologies. As new attempts at international climate treaties are rolled out, it will be interesting to see where many Southeast Asian nations fall on the spectrum of mitigation requirements.

Historically, developing countries have been held to lower emission reduction standards than countries in the developed world, but countries like Malaysia and Thailand have potentially reached a threshold where they will be counted among the world’s more developed countries, and thus required to reduced their emissions further. In any case, climate mitigation is good for Southeast Asia if it means that the impacts of climate change on the region will be softer than current predictions.

Political stability is also a recurring obstacle for a number of Southeast Asian countries. Years of stability and growth have been punctuated by sudden regime changes that have reduced the level of confidence both Southeast Asian nationals and outsiders have in the region’s governance. Urban planning is an intensely political process, so the status of a country’s national government directly effects urban development. If establishing effective national governments proves to be too much of a challenge for parts of the region, how can we expect urban management to get the attention that it requires?  Metropolitan development authorities and NGOs could potentially help cities weather the storm if political institutions fail, but finding consistent, effective governance is critical for the future of Southeast Asia’s cities.

Future economic development in Southeast Asia will also continue to shape urban areas in the region. Low-cost manufacturing has played a significant role in growing many of the region’s largest cities, but that may change as smaller urban areas take up lower-technology manufacturing as well. Some suggest that economic outcomes are better in regions where the largest cities take on service industries and high-tech manufacturing and the smaller cities concentrate low-tech industries. However, this is impossible if the infrastructure needs of smaller cities remain unmet. Investment in Southeast Asia’s small- and mid- sized cities is an important step that the region can take to move towards greater economic output.

Urbanization in Southeast Asia has reached a clear bottom line: In order to reap the benefits of healthy, innovative urban areas, the region needs to raise its expectations for planning and governance. If current regional urbanization trends continue to play out, there is potential for Southeast Asia to be the home of several highly productive urban areas. Investing in small and mid-sized cities will create robust national economies and capitalizing on dense growth will keep the environmental impact of cities to a minimum. However, if planning and coordination are left on the wayside, the region will be set on a course for vulnerability to any sort of crisis that should arise.

Leave a Comment

Filed under ASEAN, Cambodia, China, Current Events, Economic development, Environment and sustainability, Governance, Indonesia, Laos, Malaysia, Myanmar/Burma, Philippines, Sustainability and Resource Management, Thailand, Vietnam

Bottlenecks to Development: Challenges in the Mekong Delta

Last week, ExSE took a hard look at the environmental challenges facing the Mekong Delta region and found that the prospects are not good. Due to unenviable geography and global warming, rising sea levels, higher average temperatures and irregular precipitation patterns will all converge in the next 50 years to change the face of the Mekong Delta (MKD). That’s to say nothing of salinity intrusion, flooding and tropical storms. However, the MKD’s problems are not only environmental in nature; the region’s economy also faces a host of challenges, many of them tied to the Delta’s environmental changes.

Issues in the Mekong Delta are of course significant for its residents, but they also carry great importance for those outside the region because of the MKD’s role in national and regional food security. The statistics on the Delta are incredible. In an area taking up just 36,000 square kilometers (12 % of Vietnam’s total area), the Delta’s 22 million inhabitants plant 2.6 rice crops per year totaling 25 million tons of rice. The MKD’s rice production accounts for over half of Vietnam’s total and the seven million tons rice that the Delta exports has helped Vietnam become the world’s second largest rice exporter after Thailand. In addition, the Delta accounts for 70% of Vietnam’s fruit production and three-quarters of its fish catch.

The Delta’s massive agricultural output is no accident. The region is perfectly situated to receive large amounts of water and sediment from the three main stems of the Mekong Delta and the many thousands of canals that intersect them and a tropical temperature allows for farming year-round. What’s more, concerted efforts in the past 30 years to improve the region’s water infrastructure have doubled arable land in the MKD. Combined with advances in genetically modified rice strains, yields in the Delta have increased by 30% and total production has doubled, all within the past 20 years.

Incomes have also increased. According to the General Statistics Office of Vietnam (GSO), the average income of Delta residents has gone from 50 cents USD/day in 1999 to $2/day in 2010 and the region reached it Millennium Development Goals in 2006. However, despite impressive improvements in agricultural output and per capita income, the Delta has lost ground to other regions of Vietnam and now lags behind in important measurements of human and economic development.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam.

In the late 1990’s, the Delta was actually 20% above the national average in per capita income. However more than 10 years later, the number stands at a little more than 80%. In the first decade of the new millennium, Vietnam underwent a period of intense economic growth through industrialization and people all over the country got richer as a result. The benefits of economic growth were not felt equally by everyone, however. Due to development bottlenecks, some regions, including the Mekong Delta, did not industrialize like others

One of these bottlenecks is a lack of infrastructure. The proportion of waterways, intra-provincial roads and inter-provincial roads per thousand people are all behind the national average. Of these three measures, the proportion of inter-provincial roads stands out. For one, there are only 0.34km of them per 1000 people in the Delta, standing at only half of the national average. This is especially important because of the nature of the Delta’s economy. The MKD, because its economy is so heavily concentrated in agriculture, lacks many necessary products and thus has a long history of importing and exporting nearly everything. While this may be good for enterprising middlemen, it is not good for the region’s economic development. With so few avenues for importing and exporting goods, the logisitical cost rises and because the MKD lacks so many raw materials, industrial development becomes disadvantageous. In fact, unless an investor is interested in agricultural processing, building a factory closer to Ho Chi Minh City is probably a better business plan in many cases.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

Measure of waterway, inter-provincial roads and intra-provincial roads in the Delta. Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

A second bottleneck, and another reason a potential investor might not consider the Delta, is a lack of skilled labor. Like the region’s road density, the MKD’s percentage of trained labor lags behind the national average; according to data collected by GSO (General Statistics Office of Vietnam) the Delta’s percentage of trained labor stood at just over half of the national average. In addition, the proportion of Delta residents with some sort of higher education stood at less than 1%, or in other words, just a fifth of the national average. With a workforce that is so poorly trained and educated, the Delta becomes an even less attractive region for investment, especially when compared to the populations near the Red River Delta (Hanoi and its environs) or Ho Chi Minh City.

What’s more, those Delta residents that have some technical training and/or higher education do not stay in the Delta for long. As the region’s economy falls farther behind the rest of Vietnam, more and more Delta residents are moving to urban centers to look for work. One of the main destinations for these people is Ho Chi Minh City, where over half of the city’s migrant workers come from the Mekong Delta. What trained labor the MKD might have ends up leaving the region for greener pastures, thus widening the gap between the Delta and places like Ho Chi Minh City.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

One reason that the MKD has such a low percentages of trained labor and educated inhabitants is that in the past there was no need for supplementary education of any form. In an environment where the annual rice yields are stable and prices are good enough, investing time and money for a new career is an unnecessary risk and one that Delta residents have not taken. Paddy rice cultivation requires little technical skill yet provides a modest, usually stable income. However, the income provided from rice is rarely enough to invest in the expansion of other industries and in the Delta’s case, the lack of infrastructure makes such an investment an even more expensive proposition.Unfortunately for the farmers of the Mekong Delta, rice cultivation is becoming a less and less stable enterprise. For one, the price of rice has dropped in the past decade. As more and more rice is produced worldwide, the seven tons of rice the Delta exports annually decreases in value and farmers lose out.

However, shifts in the world rice market are nothing compared to problems farmers face due to global warming. As detailed here, rising temperatures, sea level rise, an erratic precipitation and flood schedule and more frequent tropical storms all threaten to radically alter the Mekong Delta in the next century. The region already has enough impediments to development with its lack of infrastructure and trained labor; its environmental issues only add to the severity of the situation. The Delta, now more than ever, is in acute need of solutions. However, who’s coming up with these solutions, if there are any to begin with, is another question unto itself and one that needs to be answered before any future for the Mekong Delta can be imagined.

Leave a Comment

Filed under Agriculture, Economic development, Environment and sustainability, Mekong River, SLIDER, Sustainability and Resource Management, Vietnam

Energy and Environmentalism on the Mekong: Time to Reach Across the Aisle

In recent years, two powerful narratives have emerged from mainland Southeast Asia. Generally speaking, discussions of the region focus around one of two topics: economic development and environmental degradation. For example, by typing “Mekong” into Google News the first page of results will show articles like this and this. As one can imagine, these two views of Southeast Asia are often in opposition and proponents of each rarely see eye to eye, sometimes going so far as to ignore the other side altogether. Recently, the battleground of these two narratives has been the construction sites of hydroelectric dams (both real and planned) that dot the Mekong River. Proponents of economic development see these dams as a necessary component to continued economic growth in the region. On the other hand, environmentalists point to the unknown ecological costs of the Mekong dams and argue that there are hidden costs to supposedly cheap hydropower. What is lost in the increasingly polarized game of right and wrong is a larger, more nuanced picture of the region and its needs. Some say that the Mekong needs dams while others argue that the region needs better protection measures for its natural resources. But what Southeast Asia really needs is for development fans and environmentalists to stop ignoring each other, and to restart the dialogue. Continue reading

1 Comment

Filed under Economic development, Energy, Environment and sustainability, GMS, Mekong River, SLIDER, Sustainability and Resource Management, Uncategorized, water

China’s Bridgehead Strategy and Yunnan Province

Editor’s note: Liu Jinxin wrote this essay to debunk the myth that China’s bridgehead strategy is militaristic or expansionary in nature.  As a chief architect of this strategy, he seeks to demonstrate that developing Yunnan province into a bridgehead will increase international trade flows and deliver long-term regional security.  This translated essay currently guides top-level foreign policy makers in China in implementing economic strategies along its borders with Southeast Asia.  

 

Yunnan province's border crossing with Vietnam at Hekou/Lao Cai

Yunnan province’s border crossing with Vietnam at Hekou/Lao Cai

The definition of a bridgehead?

According to the Modern Chinese Dictionary, a bridgehead (桥头堡) is a military term that refers to a strategic chokepoint on the field of battle and particularly refers to a fortified structure that defends and controls a bridge or ferry crossing. In economic terms, bridgehead refers to a strategic forward position on a political or economic front line. The term bridgehead appeared for the first time in an official national level Chinese policy document called “Eastern Bridgeheads” in July 1994 which confirmed the Shandong cities of Rizhao and Lianyugang as the bridgehead terminus of the Eurasian landbridge.

In the economic research of landbridges, a bridgehead is a key concept that acts as a port and facilitates the ease of transportation. Bridgeheads are also international centers of shipping, finance, and information which together form an integrated international center of trade. From a logistical and supply chain system perspective, a bridgehead serves basic support to the Eurasian landmass. It is a city or a region that sits on a strategic position on the logistical and supply chain and serves the specific purpose of controlling the flow of resources along international trade routes. The basic characteristics of a bridgehead are its powers to control, develop, and influence.

The power to control

The power to control suggests capabilities levels of secure logistical flows. This can be understood in narrow and broad senses. From a narrow sense, secure logistical flows are conditional to the degree of market openness.  The survival and development of logistical flows must not be threatened by the power of a government to regulate or control it. From a broad sense, a state’s security and international security are guaranteed by engaging in logistical activities. The capability of a state’s secure logistic flows is determined by its capacity to control strategic resources, logistics routes, linkages, and its industrial supply chain.

Linking with the similar strategic logistic routes, resources, and supply chain structures of neighboring states, a concerted logistics system can deliver harmony and mutual trust as well as a collective security that realizes long term stability. Fostering mutual trust, mutual benefit, and equality work together to form a new worldview for security and protects the security of individual states as well as respects the security concerns of other states.  Mutual trust also promotes collective security.

 

The power to develop 

Developmental power is preconditioned by the construction of logistic routes, linkages and supply chain structures, the developmental needs of economic corridors, and mutual benefit and cooperation. This power can help states share development trajectories, share prosperity and harmonious development, and eliminate security threats at their root. States should place the promotion of shared development as the method for solving global development imbalances and fostering sustainable development. To revolutionize international financial systems, oppose trade protectionism, and promote regional economic cooperation, developing countries should establish development modes that foster interdependence, deliver effective beneficial outcomes, and seek to erase poverty. Developing countries should expand trade with each other, open markets to each other, and increase the level of south-south cooperation.

 

The power to influence

Influential capabilities rely on a state’s degree of openness and tolerance, strengthening of the construction of a national culture, making positive contributions in international cooperation, solidification of geo-cultural space, promotion of geo-cultural integration, ability to cooperate harmoniously, and mutual progress with its neighbors. States should respect the rights of other states to determining their own development paths by admitting differences in cultural traditions, social systems, and value systems. States should actively promote and provide guarantees to human rights, and increase dialogue to eliminate misunderstandings. States should initiate a spirit of openness and tolerance, make use of the development modes of other states in a comparative and competitive fashion, and seek collective development despite differences.

 

The functionality of China’s bridgeheads

The central government has required Xinjiang Uyghur Autonomous Zone, Yunnan province, and other frontier provinces and zones to open the construction bridgeheads along national borders to implement a stable and prosperous frontier region. To deliver prosperity, the bridgeheads should:

1) Be a foundation of protecting border security and stability

2) Take measures under the conditions of high technology to serve as a front line in partial wars and non-traditional security issues

3) Support efforts to rapidly develop ethnic and national zones through new economic modeling

4) Expand the promotion of international/regional cooperation with neighboring states and extend degrees of openness by forging ahead as zones of experimentation.

5) Serve as a transit and storage point for national energy resources.

From a spatial perspective, Xinjiang acts as a bridge between the East and the West; it is the new Eurasian landbridge’s thoroughfare, and as a “west gate,” it serves the opening of China’s northwest region to Central Asia and Europe.

Yunnan opens China to the Southwest connecting two oceans, the Pacific and the Indian as well as East Asia, Southeast Asia, and South Asia. It is the linkage point between China’s southwest, the Southeast Asian peninsula, and the South Asian Subcontinent, and is the starting point of the Yangtze River Delta economic zone as well as the Pearl River Delta economic zone. Yunnan acts as the core belt of the China-South Asia Economic Circle and the China-Southeast Asia economic circle. It is the main connective channel between China and the Indian Ocean and is China’s core zone in the Greater Mekong Subregion. More importantly the province serves as a key trade passageway for goods and services passing from China to South Asia and the Southeast Asian peninsula.

gms_map_large

Core Values

China’s bridgeheads are a result of major changes in geo-strategic international structure. The concept is part of China’s key diplomatic principles which pledge to be a good neighbor, a prosperous neighbor, and a secure neighbor. It is also reflective of China’s active pursuit of being a responsible world power. The core values of the bridgehead strategy are:

1) To foster an infrastructure development strategy that expands participation in the world market and establishes interdependence, while constructing mutually beneficial win-win relations with its neighbors

2) To highly prioritize unity among ethnic peoples and social stability by promoting cultural diversity and shared developmental progress

3) To respect  public opinion and the will of peoples in neighboring countries, and respect their value systems by promoting cooperation and exchange between peoples and democratic equality

4) To acknowledge the guidance of international voices and place equal importance on China’s international image and economic benefit

5) To safeguard the benefit of overseas Chinese and Chinese businessmen abroad

6) To value strategic resources, strategic routes, the shared security of strategic industrial supply line

7) To promote the construction of low carbon footprint urban areas and the use of clean energy by promoting an economic society that delivers harmonious, stable, and secure sustainable development

8) To promote the construction of a harmonious new world order and the active promotion of new kinds of partnerships with neighboring countries

9) To resolutely protect free and fair global trade and investment climates, and maintain the free flow of products, investment and services

10) In the long term, to promote sustainable growth, coordinated concerns, advocate tolerance to total adjustment, and promote balanced growth

Global economic balances can only be reached through sharing benefits and needs between developing and developed states.

 

Yunnan province as China’s southwest bridgehead

The southwest bridgehead is the front line of China’s interaction with the Indian Ocean, and its purpose is to construct a series of overland pathways given China’s southwest connects to South Asia and Southeast Asia trade routes. The bridgehead’s purpose is also to construct a base facing South Asia and Southeast Asia that supports export processing and the facilitation of international and domestic production, and the Kunming international land port economic zone.

Establishing Kunming as an inland economic zone will strengthen logistical flows coming from South Asia and Southeast Asia, create a tourism base for national culture, a commerce base, export processing base, and modern agriculture base as well as an information platform. This platform will come together through the increased progress of the yearly Kunming trade fair, China-South Asia fair, and the creation of different cooperation forums. The central objective is to turn Yunnan province into China’s platform for communicating with Southeast Asia and South Asia. Through creating this window, Yunnan can facilitate the building of trust between China and South Asia and Southeast Asia, and demonstrate the fruits of reform as well as Chinese culture by promoting mutual understanding and friendship. Yunnan can become a demonstration zone for how China can open to its neighbors.

The influence of a bridgehead extends outwards and is continuously stretching its limits. In China this includes two major regions.

 

A bridgehead to Southeast Asia

Southeast Asia includes the 10 ASEAN states of Malaysia, Philippines, Singapore, Thailand, Indonesia, Brunei, Vietnam, Lao PDR, Cambodia, and Myanmar and the non-ASEAN state of East Timor. In total this region covers 4.5 million square kilometers, supports a population of 580 million, has a combined GDP of $1.9 trillion USD and a total trade of approximately 2 trillion USD. The creation of the ASEAN-China Free Trade Zone in 2010 created a free trade area of 13 million square kilometers and a combined population of 1.9 billion. It is the largest populated free trade zone in the world and the largest free trade zone among developing countries.

China and ASEAN states are linked by mountains and rivers and share advantages by having varied distribution of resources, differences in specialization of industrial processes, complementary strengths, and an enormous potential for cooperation. As trade between China and ASEAN states increases at a rapid rate so are rates of investment. China is ASEAN’s 4th largest trading partner and ASEAN is China’s 5th largest trading partner. ASEAN has been established as a priority zone for attracting Chinese FDI and is one of the outward investment zones for Chinese industries. ASEAN is also a major market for Chinese labor, and China is winning an increasing amount of engineering contracts in ASEAN.

To date China and ASEAN trade relations have already entered a “Golden Era” and as China and ASEAN open their markets to each other, the ASEAN-China Free Trade Zone will enter a substantive phase. These contributions will bring robust commercial opportunities as the Southeast Asian peninsula is a major global agricultural production area and a critical zone of emerging industries.

 

A bridgehead to South Asia

The South Asian subcontinent (by way of the BCIM economic zone which includes Bangladesh, China, India, and Myanmar) is the geo-strategic fulcrum between the Indian Ocean and the Arabian Sea. At the same time, it is zone of choice for the secure channeling of China’s energy resources. The South Asian Subcontinent is also known as the Indian Subcontinent and is comprised of the Indian peninsula, the Indus river plateau, and the downstream plains of the Ganges and Brahmaputra rivers covering an area of 4.3 million square kilometers. It supports a population of 1.2 billion on 10% of the Asian continent. Its northern reaches are formed by the Himalayan and Karakoram mountain ranges and its southern limits are the Arabian Sea and the Bay of Bengal. Its western borders are limited by the Iranian plateau, and its eastern frontiers are the mountainous eastern regions of India, Bangladesh, and Myanmar.

The severity of South Asia’s natural landscape has prevented integration and the historically its cultures have been relatively closed-off to each other. This has produced divergent sentiments of independence in the region. The South Asian subcontinent includes India, Pakistan, Bangladesh, Nepal, Bhutan and does not include Sri Lanka or the Maldives. Its major rivers are the Indus, Ganges, and the Brahmaputra. Major agricultural products are wheat, rice, cotton, hemp, cane sugar and tea. Resource endowments include coal, mica, zinc, and gold.

An international pathway can be built from Yunnan through Myanmar to give China direct access to the Indian Ocean and its benefits will promote good neighborliness and the strengthening of border areas. Frontiers serve the specific functions of national defense and economic and cultural exchange. Sharing borders with Myanmar, Lao PDR, and Vietnam, Yunnan province serves as the connective link between China, South Asia, and Southeast Asia. It offers an alternate route to the passage of goods through the Straits of Malacca and is the fastest land route for goods to travel from China to South Asia, the Indian Ocean, Europe, and Africa.

Due to its advantageous geographical position, the province can facilitate huge market potential with partners in South Asia, Southeast Asia, and the Middle East. Lastly, because of its history of friendly exchange with its neighbors, Yunnan province serves as the ideal representative for diplomatic connections.

The construction of international pathways will do much to improve the state of transportation and shipping and can only expand and deepen the political, economic, and cultural cooperation between China and Southeast Asian states. Building these pathways and supporting the bridgehead strategy will develop regional economic cooperation between China, Southeast Asian, and South Asian states, strengthen the relationship of good neighborliness, and bring stability and peace to China’s border areas.

4 Comments

Filed under ASEAN, China, DOCUMENTS, Economic development, GMS, Laos, Mekong River, Myanmar/Burma, Regional Relations, SLIDER, Thailand, Vietnam

Rubber and Sustainability in Southern Yunnan: A Tale of Two Villages

Will Feinberg compares Xishuangbanna’s rubber and sustainabilty in two of southern Yunnan’s ethnic villages. One monocrops while the other hedges.

Driving past new stores and half-built housing developments, you take a right into the forest. Keep going. The farther you drive, the worse the road gets until you burst through another patch of palms trees and cross a stream. Where are you? You’re in Mandian Village, just outside Jinghong, Yunnan and  right in the heart of Chinese rubber country.

Introduced to the area in the 1960s by the central government, rubber is big business in southern Yunnan. Large state plantations have steadily given way to private enterprises and the region has seen a proliferation of rubber planting in the past twenty years. Today in Xishuangbanna Dai Autonomous Region, which Jinghong is the seat of, rubber plantations already make up almost one fifth of all land.

While the environmental costs have been heavy, the rubber explosion has done wonders for Xishuangbanna’s economy. For rubber farmers in Mengla Country, for instance, the average household income is close to $30,000/year, comparable to places like Shanghai or Guangzhou. The economic benefits of rubber harvesting were quite clear to me while traveling through the region late last month. During the trip, I visited two villages that I had been to in 2011. In both cases, rubber has transformed the local economy, however one village was clearly better off than the other. Why?

The first village I visited was the aforementioned Mandian Village. Mandian is largely inhabited by people of the Dai ethnicity, with a 20-family group of Yi people living in an adjacent settlement. Mandian, like many other villages in the area, practices rubber cultivation and relies on rubber as its main source of income. According to villagers there, the Dai started harvesting rubber over a decade ago, while the Yi settlement began their rubber industry only within the last few years. For the village economy as a whole, rubber has had a positive influence. Per capita incomes have risen as well as household consumption and the money from rubber has allowed the town to build a new school.

However, as rubber is Mandian’s only cash crop, the village’s fortunes are now beholden to the world rubber market. Nothing illustrates this better than what happened to the village in 2012. Last year, the bottom fell out on the rubber market and the price of raw rubber dropped by half, going from 30 yuan per pound (1 US dollar is roughly equal to 6 Chinese yuan ) to 15 yuan per pound. Two villagers that I interviewed described the effects. One, a middle-aged Dai woman told of how most of the villagers who harvest rubber had to work overtime to scratch out living and the quality of life dropped for many families. Though because the Dai also plant rice, no one in the village went hungry. A young Yi woman that I spoke to also described how the economic hardships as a result of the rubber crash delayed the building of their house. The Yi, who were recently resettled as a result of the building of the Jinghong Dam, were forced to return to their old fields as a way of producing food during 2012 crash and without these fields, many villagers might have gone hungry. The fall of the rubber price in 2012 was not isolated just to Mandian village. The drop was felt in villages like Mandian all over southern Yunnan and in other rubber producing areas like Malaysia and Brazil. But there was at least one village that was comparatively isolated from the crash’s effects.

Nanpanzhong Village sits on the slope of a ridge just an hour’s drive from the Burmese border. A collection of some 120 families, Nanpanzhong is an Aini village. The Aini are a branch of the Hani/Akha minority, a nomadic, transboundary ethnicity that typically practice subsistence agriculture in the mountains of Southeast Asia. What makes the Aini of Nanpanzhong special, aside from their incredible hospitality, is their economy. Like the Dai and Yi of Mandian, the Aini also harvest rubber, but the role that rubber plays in the village’s economy is quite different. In an interview with the village mayor, I learned that money from rubber harvesting makes up only 30% of the town’s income. Instead, their primary source of income, by a long shot, is pigs. The town raises hundreds of short-eared swine which command quite a high price in China’s metropolises. According to the mayor, his pigs’ pork sells for 130 yuan/pound, many times higher than the price of normal pork. In fact, most of the village’s pork can only be found in places like Beijing, Chongqing and Shanghai; people in Jinghong can’t even afford it.

Pork sales now net the village almost sixty percent of its total income, but Nanpanzhong’s foray into the meat industry is a rather recent affair: villagers only began raising pigs in 2003. Its impact, however, has been astounding. According to the mayor, the average household income was hovering around 500 yuan per year at the turn of the millennium. Thirteen years later, that number as skyrocketed to almost 8,000 yuan and now, the mayor claims, Nanpanzhongcun is the envy of the surrounding valleys.

 When the rubber price plummeted last year, Nanpanzhong was largely unaffected. Of course, the mayor explains, villagers feel the effects when the rubber price fluctuates, but certainly less so than other places. The village is largely self-sustaining for food and the money earned from rubber, livestock and tea (which makes up a tenth of the village’s income) is used for electronics, vehicles and building materials. Both the mayor and villagers that I spoke with were convinced of the Nanpanzhong model’s superiority.

The evidence is hard to disagree with. Not considering the environmental concerns, of which there are many, rubber can be an unsustainable enterprise. Mandian, and hundreds of villages like it, have had a mixed experience with rubber. While it brought the village a new school and the villagers a higher standard of living, Mandian’s reliance on rubber and the fluctuations of the global market brought hardships to the village last year, forcing some villagers to leave in search of food. On the other hand is Nanpanzhong’s model. Rubber, while an important source of income for villagers, is part of a healthy balance. With families growing their own food and relying on two cash crops (rubber and tea) and livestock for their income, the villagers of Nanpanzhong are largely insulated from greater trends in the rubber market. The village’s exact model may not be able to be replicated in every village in Yunnan, but its general ideas can. Pairing rubber with a second cash crop and agricultural self-reliance are concepts that could give protection to villages like Mandian and offer a more economically sustainable path for thousands of people in the region.

 

Leave a Comment

Filed under Economic development, Food, SLIDER, Sustainability and Resource Management, Yunnan Province