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China’s South a Window on Economy, Reform

China’s South a Window on Economy and Reform
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China recently began service on the world's longest high-speed rail line, which stretches from its political nerve center in the north to Guangzhou - one of country’s key economic centers in the south. Both the high-speed rail and Guangdong’s massive city of Guangzhou are windows into the tremendous economic challenges China’s new leadership is facing.

A trip on China’s high-speed rail is a front row seat to the many faces of the Chinese economy: the country’s heavy reliance on construction to fuel growth, the disparity between regions, environmental challenges and overcapacity.

Xu Xianxiang, an economics professor at Guangzhou’s Sun Yat-Sen University, says there are many inequalities in China and that, although people in richer places are in good shape, there are also poorer places where people cannot even afford to go to school or to the hospital. He says that, if you look at Beijing, Shanghai, Guangzhou, it is all very good. But if you drive two hours away from cities it is all very different.

China’s leadership designed a new, freer economic system in the south, more than three decades ago. Now the region and its labor-intensive manufacturing-led growth accounts for 50-60 percent of the country’s economy.

But, as the global economy slows and demand overseas for Chinese goods wanes, the pace of development in the south is also slowing.

Xu says that government officials in Guangdong and coastal areas are worried now and trying to find a way to transform the south’s economic model. He says the search for a new model here could become the model for the rest of China in the future.

Although China’s economic growth is expected to remain stable at about seven percent until the end of this decade, the country’s leaders are acutely aware of the challenges that remain. Outgoing Premier Wen Jiabao highlighted some of those challenges this week during his report to the National People’s Congress - China’s parliament.

Wen says some people still lead hard lives. He says social problems have increased markedly and that people struggle with issues such as education, employment, social security and the environment.

It is not just the abundance of work opportunities and economic openness that makes the south unique, says AI Xiaoming, a filmmaker who has been documenting social issues across China for decades.

Ai says that, because Guangdong is so close to Hong Kong and Macau, there is a freer flow of information and that, because the region was the first to adopt reforms and open its economy, people commonly value life. She says the environment is very open-minded.

Still, although it is easier for officials in the south to be more progressive, because they are so far away from the country’s political center in the north, Ai says an open-minded environment does not mean that change is easy.