Lu Baile: Objectively Viewing the "North-South Economic Difference" with Complementary Advantages
[North-South economy, both good]
In recent years, voices such as "the south is crushing the north in an all-round way" and "the south is strong and the north is weak" often appear on the Internet. How to correctly treat the economic gap between North and South in China? What are the comparative advantages and development opportunities of the North under the new development pattern? With these questions, the reporter from Economic Daily-China Economic Net interviewed Lu Baile, secretary and chairman of Dagong International Party Committee.
Lu Baile believes that "North-South economic gap" can better reflect the pattern and present situation of China’s North-South economic development than the popular saying on the Internet. Regarding the economic comparison between the north and the south of China, Lu Baile said that it should be viewed objectively from a historical perspective and a development perspective. The economic difference between the north and the south more reflects the complementary advantages of the north and the south in China’s industrial layout. China has a vast territory, and each region has its own characteristics. In recent years, the spatial structure of China’s economic development is changing, and the characteristics of multi-point flowering and cooperation are becoming more and more obvious. With the accelerated construction of China’s new development pattern, the industrial layout in different regions is expected to be further optimized, and the advantages of coordinated economic development between North and South will be further reflected in the future.
Economic Daily-China Economic Net reporter: Recently, the topic of North-South economic gap has been heated up again. What do you think?
Lu Baile:Objectively speaking, these arguments and voices only see the appearance of things, and it is biased to draw these conclusions from the comparison of individual data. China has a vast territory. Influenced by land, climate, population and other factors since ancient times, there are certain differences in economic development between the north and the south. In addition, the implementation of national industrial layout and opening-up strategies in different historical periods since the founding of New China are the main factors that lead to the differences in economic composition and marketization between the north and the south. Therefore, from the point of view of history and development, compared with the popular saying "North-South economic gap" on the Internet, "North-South economic gap" can better reflect the pattern and present situation of China’s North-South economic development.
From the perspective of historical factors, the historical legacy of industrial development layout in different periods of the planned economy era has a certain impact on the differences in industrial structure between north and south regions. At the beginning of the founding of New China, China was faced with a severe economic situation. The domestic productivity was not only very backward, but also the layout was extremely unbalanced. More than half of the heavy industries were concentrated in the Northeast. Since then, due to the consideration of the international and domestic situation and geopolitical factors, the focus of a large number of new projects has been in the inland central and western regions; Since then, it has experienced the strategic layout of expanding the main industries to the inland depth, such as the third-line construction. These national industrial strategic layouts in different periods have distinct characteristics of the times, which have made important contributions to the development of national economy in a specific period, but objectively they have also branded the industrial structure in different regions with the times. Since then, with the promotion of China’s reform and opening-up policy, industrial upgrading and market-oriented reform, the historical accumulation of industry has also caused differences in economic development nodes in different regions. In this process, the temporary imbalance of economic development in different regions is inevitable. Therefore, in dealing with the economic comparison between the north and the south of China, we should look at it objectively from a historical perspective and a developmental perspective.
Since the reform and opening up, there have been some differences in the development direction of different industries in the north and south regions of China, but this difference more reflects the complementary advantages of the north and south regions in China’s industrial layout. China’s southern region began to implement the reform and opening-up policy earlier than the northern region. Thanks to the development of international division of labor and export-oriented economy, and the inherent geographical advantages in shipping, the southern region participated in the international market competition earlier, with a high degree of marketization and a high proportion of non-public economy.
On the other hand, although the development of export-oriented economy in the northern region is relatively backward, the supporting role of the northern economy in China’s basic industries, energy, agriculture and other fields ensures the smooth implementation of the opening-up strategy in the southern region and the overall security and balance of the national economy. At the same time, with its advantages in scientific research, education and other fields, the north has imported indispensable human resources for the development of the southern economy. In this sense, this economic difference between the north and the south more reflects the complementary advantages of the north and the south in China’s industrial layout.
In addition, we believe that it is too simplistic and general to distinguish China only from North and South or East and West. China has a vast territory, and each region has its own characteristics. In recent years, the spatial structure of China’s economic development is changing, with the regional layout of the western development, the revitalization of Northeast China, the rise of central China, the modernization of eastern China, and the layout of economic belts and urban agglomerations such as promoting the coordinated development of Beijing-Tianjin-Hebei, the development of the Yangtze River Economic Belt, the construction of Guangdong-Hong Kong-Macao Greater Bay Area and the integrated development of the Yangtze River Delta, and the characteristics of multi-point flowering and cooperation are becoming more and more obvious. It is predicted that in the future, central cities, urban agglomerations and economic belts will be the main spatial carriers to promote the flow of factors between regions and form a regional economic layout with complementary advantages and high-quality development.
Economic Daily-China Economic Net reporter: Is there really a huge gap between the North and the South? How to treat this gap rationally?
Lu Baile:Judging from the economic aggregate and economic growth rate, there is indeed a certain gap between some provinces in the north and south at this stage, but we believe that the term "economic difference between the north and the south" can better reflect the pattern and current situation of economic development in the north and south of China. To some extent, it is this complementary difference that supports the rapid development of China’s economy, so we should treat this difference dialectically from a historical perspective and a developmental perspective.
The difference between the north and the south of China is mainly reflected in the industrial structure, in which the south is dominated by light industry and foreign trade, while the north is dominated by agriculture and heavy industry, and this difference is mainly determined by the endowment conditions and the needs of different stages of China’s economic development. From the north, its natural resources are abundant, Shanxi, Hebei, Inner Mongolia and other provinces have abundant coal resources, Shaanxi-Gansu-Ningxia and Northeast China have abundant oil and natural gas reserves, and North China and Northeast China have vast land, especially in the Northeast Plain. Therefore, at the beginning of the founding of New China, a large number of resource-intensive industries, heavy chemical industries with high dependence on natural resources and agriculture were mainly located in the north, thus forming an industrial structure dominated by agriculture and heavy chemical industries in the north. From the south, its natural resources are relatively scarce, and due to historical inertia, light industry with human labor as the mainstay has been in a dominant position in the southern economy for a long time. After the reform and opening-up, the comparative advantages of shipping facilities in the southeast coastal areas have been brought into full play, and with the support of national policies, the export-oriented economy in the southern region has developed rapidly, and two economic zones, the Yangtze River Delta and the Pearl River Delta, have been formed.
With the weakening of investment, the value chain of heavy chemical industry, which is highly dependent on investment in the northern economy, has been hit to some extent and needs to promote industrial transformation; However, the negative impact of the slowdown in investment on the southern economy is relatively small, and the dividend brought by the export-oriented economic development model has been obtained. Therefore, the differentiated industrial structure between the North and the South makes its economic performance different at different stages of economic development, and it is this differentiated industrial structure that makes China maintain a rapid economic growth rate under different economic development modes.
At present, China is speeding up the construction of a new development pattern with the domestic big cycle as the main body and the domestic and international double cycles promoting each other. It is expected that under the new development pattern, the differences in industrial structure between the North and the South will bring their respective comparative advantages. The two sides will jointly promote the high-quality development of China’s economy in the process of supplementing shortcomings, forging long boards, complementing advantages and industrial synergy.
Economic Daily-China Economic Net reporter: Under the new development pattern, what are the comparative advantages, latecomer advantages and development opportunities of the North?
Lu Baile:In recent years, great changes have taken place in the economic situation at home and abroad, and the central government has sized up the situation and proposed to speed up the construction of a new development pattern with the domestic big cycle as the main body and the domestic and international double cycles promoting each other. From the connotation of the new development pattern, it includes the transformation of the market and the transformation of the industrial chain, etc. The former means that the supply and demand of the market begin to tilt from the international market to the domestic market, while the latter means that the upgrading of the industrial chain relying on independent innovation will dominate the future development direction of China’s industry. At these two levels, relying on the broad market space and solid comparative advantages of scientific research and education, the northern region of China is bound to usher in a new period of development opportunities under the new development pattern.
From the perspective of market transformation, since the reform and opening up, China’s economic pattern, especially in the southern region, has long been biased towards the export-oriented economic model. Under the new development pattern, the focus of the market will gradually shift to the domestic market. In this transformation process, the development of market potential in the northern region is the key to the success of the transformation. Judging from some economic indicators other than GDP, the consumption potential of residents in the northern region is gradually catching up with that in the southern region. According to the data released by the National Bureau of Statistics, the top ten provinces with per capita disposable income in 2020 are Shanghai, Beijing, Zhejiang, Tianjin, Jiangsu, Guangdong, Fujian, Shandong, Liaoning and Inner Mongolia. With the domestic economic growth relying more and more on the cultivation of the domestic consumer market, the contribution of economic growth in the northern region will be more prominent in stimulating the national economic growth in the future. Under the new development pattern, the late-developing advantages of the northern region will be gradually reflected in regional coordinated and balanced development, coordinated development of urban and rural areas and rural market development.
From the perspective of industrial chain transformation, the trade conflict between China and the United States in the past two years has highlighted the weakness of China’s industries, especially advanced manufacturing industries, which relied heavily on the international market in the past period. How to break through this bottleneck is the key for China’s economy to take off in the next step, and relevant strategies have been highlighted in the new development pattern. Large scientific research institutes and many state-owned enterprise headquarters and R&D centers have gathered in the northern region, which are the source power for China to upgrade its industrial chain through scientific and technological innovation in the next step. Especially with the state-owned enterprises entering a new round of reform, enterprises will develop by leaps and bounds in terms of operating efficiency, innovation ability and competitiveness in the future, helping the northern region to catch up with the economy.
In addition, under the new development pattern, the northern region has also ushered in a new round of development opportunities in agriculture and other fields. Agriculture has always been the dominant industry in northern China. Under the new development pattern with the domestic macro-cycle as the main body, the role of agriculture in ensuring its position in the national economy has been further enhanced. Rural market development is an important component of China’s domestic circular market cultivation, and it is also a key area of development. It is expected that the development of agricultural economy in the future will help China’s northern economy to a new level.
To sum up, under the new development pattern, the complementary economic advantages and industrial synergy between the north and the south of China are expected to further deepen.
Economic Daily-China Economic Net reporter: What suggestions do you have for the coordinated development of China’s North-South economy?
Lu Baile:In promoting regional coordinated development, first, the top-level design should be strengthened at the macro level to meet the needs of promoting high-quality economic development under the new development pattern; Second, all regions should make up short boards and forge long boards according to their own conditions, give play to their comparative advantages, and implement the overall planning. In fact, in recent years, China has introduced many policies and measures to promote coordinated regional development from different levels.
In the Central Committee of the Communist Party of China’s Proposal on Formulating the Fourteenth Five-year Plan for National Economic and Social Development and the Long-term Goals in 2035, "the gap between urban and rural regional development and the gap between residents’ living standards has been significantly reduced" has become one of the long-term goals in 2035. From the specific measures: first, in terms of production factors, promote the market-oriented allocation reform of land, labor, capital, technology and data elements, improve the efficiency of resource allocation, and give play to the decisive role of the market in resource allocation; Second, in terms of system, promote the reform of state-owned enterprises and give play to the strategic supporting role of state-owned economy; Third, at the specific regional policy level, promote regional development strategies such as the development of the western region, the comprehensive revitalization of the northeast, the rise of the central region, and the coordinated development of Beijing-Tianjin-Hebei.
In the future, we need to do a good job in the implementation of the policies that have been introduced and improve the policy landing effect. First, combine the advantages of land, resources, technology and labor in the north with the capital and scientific and technological innovation ability in the south to realize the complementarity between the north and the south; Second, there are many state-owned enterprises in the north. Through the implementation of the Three-year Action Plan for State-owned Enterprise Reform (2020-2022), the state-owned enterprises will truly become stronger and better, enhance the vitality of state-owned enterprises, improve efficiency, and realize the strategic supporting role of the state-owned economy; Third, effectively solve the pain points in regional policies, reverse misunderstandings, and guide the flow of funds, talents and technology.
We believe that with the accelerated construction of China’s new development pattern, the regional industrial layout is expected to be further optimized, and the advantages of China’s coordinated economic development between North and South will be further reflected in the future.
Economic Daily-China Economic Net reporter: There are a large number of state-owned enterprises in the north, especially in the northeast. Under the new situation, can the North gain new development momentum by deepening the reform of state-owned enterprises?
Lu Baile:On June 30, 2020, the 14th meeting of the Central Committee for Deep Reform deliberated and adopted the Three-year Action Plan for State-owned Enterprise Reform (2020-2022), which is a programmatic document for deepening the reform of state-owned enterprises in China in the new development stage. With the in-depth implementation of the three-year reform of state-owned enterprises, the advantages that the North can obtain mainly include the following aspects.
First of all, compared with the south, the state-owned enterprises in northern China account for a relatively large proportion, and the reform of state-owned enterprises under the new situation is expected to make the northern region play a late-comer advantage and revitalize the state-owned economy through scientific and technological innovation. Secondly, the state-owned enterprises in the northern region are more intensive and the natural resources are more abundant. Through appropriate mergers and reorganizations, especially for regional resource-intensive state-owned enterprises, it is expected to further give play to the comparative advantages of resource agglomeration of state-owned enterprises in the northern region and make them stronger, better and bigger. Thirdly, cross-regional integration of state-owned enterprises is also conducive to enhancing economic cooperation and coordinated development between the North and the South. (Economic Daily-China Economic Net reporter Ma Changyan)
























