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This publication/ translation has been produced with the support of the, a project co-funded by the European Union and thePeople’s Republic of China, implemented by a consortium lead by Grontmij Carl � Grontmij Carl Bro A/S 实施The content of this report is the sole responsibility of its author/s and translators and canin no way be taken to reflect the views of the European Union.该出版物/翻译 的内容由其作者/翻译 �观点。EU-China PolicyDialoguesSupportFacility

EU–China Cooperative Research Program onRegional PolicyResearch Report of the Chinese Expert GroupChinese Expert Group, March 2010Group Leader: Wang YimingMembers: Wang Qingyun, Shen Bing, Sun Xuegong, Ouyang Hui,Ding Ding, Yu Xiaoli, Gao Shiji, Liu Feng,Liu Weidong, Huang Kun-0-

Table of ContentsResearch Report of the Chinese Expert Group. - 0 Foreword. - 8 Chapter 1 Economic Growth and Regional Policy. - 12 1.1 China’s Economy Across 30 Years of Reform and Opening Up .- 13 1.1.1 The growth track of China’s economy since the reform and opening up policy . 13 1.1.2 Major Factors in the Sustained Rapid Growth of China’s Economy . - 16 1.2 Influences of Geographical and Policy Factors on Regional Development- 20 1.2.1 Influence of Geographical Conditions. - 20 1.2.2 Evolution and Influence of China’s Regional Policy . - 22 1.3 Regional Development in the Eleventh 5-Year Plan Period .- 26 1.3.1 Positive Changes in Regional Economic Development . - 26 1.3.2 Major Problems facing Coordinated Regional Development. - 30 1.4 Regional Policy Objectives and Policy Framework .- 33 1.4.1 Primary Objectives of China’s Regional Policy. - 33 1.4.2 Regional Policy Framework in Future Periods. - 35 -Chapter 2 Historical Review of Regional Policy . - 40 2.1 Regional Policy during the 1950s–1970s with the Focus on BalancedRegional Development .- 40 2.1.1 Balanced Regional Development in the 1950s under the Influence of the FormerSoviet Union Model . - 40 2.1.2 Direction of National Production Distribution towards the Inland Unchangedduring the ‘Third Front’ Construction Period (1960s–1970s) . - 43 2.1.3 Effects of the Regional Policy . - 44 2.2 Regional Policy Adjustments since the Late 1970s.- 46 2.2.1 The Economic Development Strategy of Coastal Areas since the Late 1980s- 47 2.2.2 The Coordinated Regional Development Strategy since the 1990s. - 48 2.2.3 Effects of the Regional Policy of the 1980s and the 1990s . - 49 2.3 Implementation of the Master Strategy for Coordinated RegionalDevelopment since the Beginning of the 21st Century.- 51 2.3.1 The Strategy for the Development of Western China . - 51 2.3.2 The Strategy for the Rejuvenation of Old Industrial Bases in North-EasternChina . - 53 2.3.3 The Strategy for the Rise of Central China . - 56 -1-1

2.3.4 The Strategy for the Leading Development of Eastern China . - 58 2.3.5 Establishment of the Interactive Regional Coordination Mechanism . - 59 2.3.6 Formation of Development Priority Zones . - 61 2.3.7 Effects of the Regional Development Strategy . - 63 -Chapter 3 Definition of Regions and Regional Demarcation. - 65 3.1 Definition of Regions.- 65 3.2 Regional Demarcations in China.- 67 3.2.1 Introduction to the Administrative Divisions of China. - 67 3.2.2 A Brief Review of China’s Regional Demarcations Before the Reform andOpening up Policy. - 69 3.2.3 ‘Coastal–Inland’ and Three Zone Demarcations in the Early Period of theReform and Opening Up Policy . - 72 3.2.4 Seven Economic Regions in the Mid 1990s .763.2.5 Regional Demarcation in the New Century – the Four Blocks .793.2.6 Development Priority Zones under Formulation.853.2.7 Special Divisions .883.3 Inspiration and Suggestions Obtained from the Comparison of RegionalDemarcations in China and the EU – Some Preliminary Ideas .98Chapter 4 Economic and Regulative Orientations of Regional Policy .1014.1 The Role and Function of China’s Regional Policy in the Government’sRegulation and Control of Economic and Social Development . 1014.1.1 China’s Regional Policy in the Planned Economy Period.1014.1.2 China’s Regional Policy in the Market-Oriented Transformation Period.1024.2 Preferential Policies in the Four Regions of China . 1034.2.1 Preferential Policies in Eastern China .1044.2.2 Preferential Policies in Western China.1064.2.3 Preferential Policies in North-Eastern China .1064.2.4 Preferential Policies in Central China .1074.3 Supportive Policies for Poverty-Affected Areas. 1074.3.1 Arranging Financial Poverty Alleviation Funds.1084.3.2 Reinforcing the Management of Financial Poverty Alleviation Funds andImproving the Efficiency of Usage.1084.3.3 Arranging Poverty Alleviation Loans.1094.3.4 Promoting the Development of Poverty-Affected Areas along with theDevelopment of Western China.1094.3.5 Carrying out Targeted Poverty Alleviation among Party and GovernmentOrgans .1104.3.6 Organising the Counterpart Assistance for Poverty Alleviation between theCoastal Developed Areas and the Western Poverty-Affected Areas Successfully.1104.3.7 Carrying forward the Fine Tradition of the Chinese Nation to Aid the Poor andMobilise Society at all Levels to Help in Development and Construction in PovertyAffected Areas .1114.3.8 Organising International Exchanges and Cooperation Over DevelopmentOriented Poverty Alleviation .111-2-2

4.4 Differential Policies for Development Priority Areas in Different Categories. 1124.4.1 Policy Orientations for Optimised Development Areas .1124.4.2 Policy Orientations for Key Development Areas.1134.4.3 Policy Orientations for Restricted Development Areas.1144.4.4 Policy Orientations for Prohibited Development Areas .114Chapter 5 Promoting Regional Growth: Development Strategy and RegionalPlanning .1165.1 China’s Development Strategy and Regional Economic Growth. 1165.1.1 Adjustments to the Strategy to Promote Regional Growth.1165.1.2 Characteristics of China’s Regional Development Mode .1185.1.3 Transformation and Challenges of China’s Regional Development .1205.2 Positive Effects of China’s Regional Planning on Regional Economic Growth. 1235.2.1 Role of China’s Regional Planning.1235.2.2 Transformation of Regional Planning and Effects in Promoting Regional Growth.1245.2.3 Positive Effects of China’s Regional Planning on Regional Economies.129Chapter 6 Regional Governance with Chinese Characteristics.1336.1 The Rise and Development of Regional Governance in China . 1336.1.1 Regional Administration in the Planned Economy Period .1336.1.2 The Rise of Regional Governance since the Reform and Opening up .1376.2 Regional Mutual Assistance Mechanism with Chinese Characteristics. 1446.2.1 Running of Regional Mutual Assistance Mechanism . 1446.2.2 Transformation of Regional Mutual Assistance Mechanism .1466.3 Problems and Challenges of Regional Governance. 1496.3.1 Institutional Constraints .1496.3.2 Challenges .1526.4 Building of a Regional Governance Model with Chinese Characteristics . 1566.4.1 How to Refine the Regional Governance Model .1566.4.2 Formulation of a Regional Governance Model with Chinese Characteristics .159Chapter 7 Fiscal and Tax System: Budget and Fund Allocation .1617.1 China’s Fiscal and Tax System. 1617.1.1 Evolution and Future Reform Orientation of China’s Fiscal and Tax System .1617.1.2 Present Fiscal and Tax System of China .1647.1.3 Characteristics of China’s Taxation System .1677.2 China’s Fiscal and Tax Policies to Promote Coordinated RegionalDevelopment. 1677.2.1 Transfer Payment System (General Transfer Payment, Earmarked TransferPayment and Allowances) .1677.2.2 Preferential Tax Policies and Financial Aid.1727.3 Direct Government Investment Policies. 1757.3.1 Special Financial Funds to Support Regional Development .175-3-3

7.3.2 Budgetary and Ex-budgetary Investment from the Central and LocalGovernments.1807.4 Financial Support and Policies. 182Chapter 8 Promoting Regional Development by Industrial Transfer and CapitalFlow.1868.1 Transfer of International Industrial Capital to China. 1878.1.1 Eastern Coastal Region – Place of First Landing of International IndustrialTransfer .1878.1.2 Eastern Coastal Region – Main Destination of FDI Flow .1888.1.3 Factors Driving International Industrial Capital to Flow to Eastern CoastalRegion.1908.1.4 Effects of International Industrial Capital Transfer to the Eastern Region.1928.1.5 FDI Trends in China.1968.1.6 Prospects for China in Accepting International Industrial Capital Transfer.2008.2 Domestic Industrial Transfer and Capital Flow. 2028.2.1 Domestic Capital Flow to Coastal Areas after the Reform and Opening up.2038.2.2 Background of Industrial Transfer from Coastal Areas . 2058.2.3 Trends of Industrial Transfer from Coastal Areas .2068.2.4 Problems of the Central and Western Regions in Accepting Industrial Transferfrom Coastal Areas .2108.2.5 Prospects of the Central and Western Regions in Accepting Industrial Transferfrom Coastal Areas .213Chapter 9 Rural Development and Urban–Rural Integration .2199.1 Rural Development . 2199.1.1 Rural Infrastructure and Public Services.2199.1.2 Factors Restricting Rural Development .2259.1.3 New Policies to Promote Rural Development.2279.2 Rural Reform . 2339.2.1 Land Reform .2339.2.2 Reform of Rural Financial System.2359.2 Policy Orientations and Prospects for Integration of Urban and RuralDevelopment. 2379.3.1 Integration of Public Finance.2389.3.2 Integration of Planning and Infrastructure Construction. 2399.3.3 Integration of Public Services.2409.3.4 Integration of Employment System .2429.3.5 Integration of Market System .2449.3.6 Integration of Resource Allocation .246Chapter 10 Urbanisation and Urban Development .24910.1 Urbanisation since the Foundation of P.R.C. 24910.1.1 China’s Urbanisation in Twists and Turns before the Reform and Opening up.24910.1.2 Rapid Growth after the Reform and Opening up . 250-4-4