Three decades of successful reforms have transformed the People's Republic of China (the PRC) into the world's second largest economy and facilitated a swift transition from a low-income to a middle-income country. However, the PRC still faces complex development challenges, including significant poverty, large income inequality, and widening regional disparities. Failure to decisively implement further reforms would jeopardize the PRC's long-term growth prospects.
The above-mentioned challenges also exist in Anhui province (Anhui). The province is located in the PRC's central region, with a population of 68 million and a territory of 134,000 square kilometers. When market reforms started in the late 1970s Anhui piloted a rural household contract responsibility system, which catalyzed the success of the agrarian reform in the PRC. The province has pioneered other initiatives, including the abolition of agricultural taxes and other fiscal charges on farmers. However, compared to its coastal neighbor provinces, Anhui has a less developed economy, a weaker urban-rural integration, wider disparity among sub-regions, and a higher poverty incidence.
Sub-regional disparity is of great concern of the provincial government. Anhui stretches across the Yangtze River. The province is divided into three sub-regions in the north, the south, and the middle of Anhui. The middle sub-region is an urban corridor along Yangtze River and the most prosperous and dynamic part of Anhui. The southern mountainous sub-region includes the Huangshan mountains, a world famous tourism site. For that reason, this sub-region has successfully implemented a development strategy concentrated on tourism.
The northern sub-region of Anhui (NSRA), covering six cities and five counties, has lagged behind in terms of social and economic development. Compared to the two other sub-regions, NSRA faces more serious development constraints. Further, a consensus has yet to evolve among stakeholders on a suitable development strategy for the sub-region. The constraints include:
Overpopulation and low productivity. NSRA's population density is well above the province's average. NSRA has 53 per cent of the province's population, but produces only 33 per cent of its GDP. Most of the residents are farmers with limited education and skills.
Frequent floods. NSRA is located in the Huai River basin. Rather than being the driver of economic development as in other sub-regions, the river constraints development due to frequent water disasters.
Less-developed transportation infrastructure. The water transportation along Huai River is under developed, as measured against its potential, the development goal of the national water transportation network, and market demand. NSRA also lacks railways to connect its economic centers. While there are expressways going through the sub-region, NSRA is short of connecting roads.
Low urbanization. NSRA is a major grain producer in the province, but its per capita area of land is well below the provincial average, due to the high population density. Limited land constrains urbanization. NSRA urbanization rate is about 40 percent, much lower than the average of Anhui province.
Lagged industrialization. NSRA is endowed with rich natural resources, particularly mineral resources. This is why the development of natural resources rather than industrial development was prioritized in the past.
The expected impact will be reduced sub-regional disparity in Anhui province. The performance targets/indicators include that (i) the urbanization rate increases one percentage point annually by 2019 and (ii) investments in public infrastructure increase by 20 percent annually by 2019.
The expected outcome will be an improved enabling policy and legal environment for integrated development in NSRA. As a performance target/indicator, policy recommendations under the TA will be incorporated into the province's new policy and planning documents issued during 2014-2017.
The expected output will be a comprehensive report on promoting social and economic development in NSRA. The report will comprise an overview report and six sub-reports on migrant farmers, flood management, transportation, rural land transfer, industrialization, and urbanization. In addition, short policy notes, summarizing findings and recommendations, and knowledge products will be prepared during TA implementation. Review workshops and dissemination seminars involving stakeholders concerned will be organized at different stages of the TA.