[Answer] Shaanxi Has Such a Good Geographic Location—Why Is Its Economy Still Underdeveloped?

[Answer] Shaanxi Has Such a Good Geographic Location—Why Is Its Economy Still Underdeveloped?

In the first half of 2018, economically advanced provinces represented by Guangdong and Jiangsu had already surpassed 4 trillion yuan in GDP, while Shaanxi and Jiangxi had only just exceeded 1 trillion. Whether or not GDP can fully reflect the real state of an economy, it can at least represent economic conditions to a considerable extent.

Of course, Shaanxi has defense-related industries, and it has also benefited from the Belt and Road Initiative. But a fourfold gap in total economic output is certainly not something that can be closed overnight. What is more, compared with Guangdong, I believe Shaanxi lags behind in more than just total economic output. There are many other subjective and objective problems as well. If these issues are not addressed, it will be difficult even to narrow the gap with Guangdong and Jiangsu, let alone overtake them.

The first and most important factor is the business environment. In recent years, the service awareness of the Shaanxi authorities has improved quite a bit compared with the past. The arrival of Tsinghua University’s former president helped raise administrative awareness, and the party secretary transferred from Zhejiang also brought a renewed economic mindset. In the long run, these changes are deeply significant for Shaanxi’s development. However, it will still take time for this service-oriented mentality to filter through from top to bottom. For businesses, compared with the coastal regions, the local business environment still falls short in many ways, especially in openness and service awareness, and requires continued improvement.

The second factor is natural conditions. Compared with the coast, inland regions are naturally more closed off in terms of transportation and exchange. In recent years, with the expansion of the high-speed rail network, Xi’an’s transportation convenience has improved greatly. But for cargo transport and business exchange, costs remain a major constraint on development. This will require large-scale improvements to the transportation system, as well as the broad implementation and advancement of the Belt and Road Initiative, before conditions can gradually improve.

The third factor is industrial and commercial support infrastructure. Xi’an has traditionally been characterized by a relatively large concentration of defense industries, and this has, to some extent, also held back the development of small-scale manufacturing. In Guangdong, by contrast, small light industries have sprung up everywhere. New industrial and commercial ventures will naturally prefer environments where upstream and downstream supporting industries are complete and convenient. This disadvantage cannot be eliminated in a day or two.

The fourth factor is talent. Although Xi’an has a high concentration of universities, it lacks a large number of technical and business professionals, especially those who have been seasoned in economically advanced regions such as Guangdong. Meanwhile, because of the higher salaries offered in coastal areas, the broader trend of top graduates “flying southeast” has still not been fundamentally reversed. How to retain talent remains an important issue that must be addressed.

Finally, there is ideology. The traditional conservatism of people in Shaanxi is even more pronounced in some parts of northern Shaanxi. The rapid development of an energy-dependent economy, combined with conservative and backward-looking social attitudes, has produced a distorted social structure. Openness cannot be driven only from the top down; it also requires outside pressure and competition to awaken and transform the conservative mindset passed down from generation to generation.

Taken together, compared with Guangdong, Shaanxi has major disadvantages in both inherent conditions and later development. However, its strengths in defense industries, natural resources, and human resources also represent the basis and potential for long-term development. How to make full use of these resources, open up thinking, push forward development, leverage the Belt and Road strategy, and rise to the challenge through renewed determination is something that should truly concern all the people of Shaanxi.