The problem with China's Periphery
The transformation of a historically contested space into the next global industrial hub provides more challenges than distance and capital investment.
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On 5th January 2025, China’s customs administration announced a set of 15 measures “aimed at advancing the large-scale development of the country's western regions, with a particular focus on promoting openness.” These measures include establishing new logistics hubs and cross-border trade zones, improving internet connectivity and power infrastructure, improving rail, road and air networks, and promoting tourism and investment. A more detailed breakdown can be found in a This Week in Rural China post.
What the post also points out are the serious barriers to western development, including a lack of urbanisation leaving many unable to access the benefits of China’s rapid economic growth. The author also highlights the fact that this is not the first time that the Chinese state has attempted to bring the western periphery up to speed with the rest of the country. In the 00s, the government launched the ‘Go West’ campaign, which “aimed to bring development to these rural regions through infrastructure investments such as railways and highways.”
But this was not the first time the government has attempted to more fully integrate the west’s economy with the rest. In fact, throughout history, the central, Han majority ruling classes have consistently struggled with what to do about the Xinjiang-Tibet-Inner Mongolia-Qinghai-Gansu problem. How to properly integrate not only politically, but also culturally and economically? How to make the people of these regions – so used to not being part of China than part of it – feel like they have a stake in the future of this great nation?
In trying to solve these problems, the government has repeatedly introduced strategies to make the west just like the rest. And in fact, this is at least the fourth time the government has tried to kickstart western regional development.
If at first you don’t succeed
In 1964, the CCP announced its Third Front Campaign, a covert industrialisation campaign that promoted the development of heavy industry and military bases in China’s interior in case the Cold War should escalate and China should be invaded by its enemies. If China’s first front, namely its coastal cities were invaded, then PLA troops would have to retreat to a second front away from the coast in Suzhou, and then if necessary a third front in China’s interior, where they could wage a protracted land war. In order to pull this tactic off, advanced preparations would need to be made so that the PLA could operate self-sufficiently for a long period of time, and survive in China’s mountains even if the rest of the country were bombarded with nuclear weapons (you can read about the full strategy, its development, and outcomes in Covell Meyskens’ China’s Third Front).
Needless to say, this project didn’t work out. In fact, the third front was abandoned once it became clear that the international situation wasn’t as dire as first expected. But even before then, problems with the campaign were beginning to show: a dam in Chengdu that was built at huge expense immediately began to crack, railway lines collapsed, and in general billions of yuan were wasted on projects that were never even completed. Progress was undercut by poor economic planning, fundamental design failures, and rushed targets, as well as the remote nature of the project that led to delays due to (ironically) lack of infrastructure.
After completely abandoning the west in favour of the rapid expansion of coastal regions and Special Economic Zones in the 1980s, the CCP rediscovered balanced development in the 90s. The Eighth Five-Year Plan (1991–1995) tilted towards balance, “specifically by increasing construction of the basic industries and infrastructure… and developing foreign trade and economic cooperation with neighboring countries, and making full use of its own regional advantages to promote the economic development of the region with the aim of ensuring the balanced development.”
In the early 00s, they went a step further, fully committing to the idea of a prosperous periphery, which brings us to the Go West campaign. The government invested heavily in construction and business development, giving out huge loans and bonds accounting for between 20%-40% of the national budget between 2001 and 2009. These investments, along with policies to encourage foreign investment and move talent to the region did yield some results. Between 2000 and 2010, the western economy reached an average annual growth rate of 13.58%, exceeding the growth of central and northeastern China.
But the raw data belies the reality on the ground. The west is completely dependent on continuous injections of capital investment to sustain growth, while shares of foreign and self-raising funds remain low. Because of a low return rate of investment, western regions cannot reliably attract enough foreign capital, eastern regions’ capital or private capital to invest in local industries.
These regions are also suffering from shortage of human capital and brain drain. High-level professionals tend to migrate east, with more than 90% of college and university graduates in western China preferring to obtain employment in eastern regions. There is also the migrant problem – in the 2010s, 31.6% of migrant workers were from western China, and 59.1% of Western China’s rural migrant workers moved outside their provinces to, especially, eastern regions.
This shows a negative correlation between investment in the west and development of the west. Namely: “following the current construction pattern, most of the social and economic benefits created by infrastructure construction flow out rather than localize in western regions.”
Foundational issues
The fact that the CCP has to keep relaunching what is essentially the same campaign over and over again is worrying. The periodic rebranding doesn’t seem to be helping, nor do the changes in broad aims or technological upgrades.
Logically (or at least topographically) speaking China’s westernmost provinces are obvious candidates for becoming global hubs with shiny new transport links. Bordering a dozen countries, most of which have something BRI related going on, provinces like Tibet, Xinjiang, Yunnan and Guangxi have plenty of physical and cultural links with the nations that surround them. These regions are primed for investment into transport links and trading hubs, or at least a fake city or two (and before you argue that it’s mainly desert out there, I implore you to remember that Dubai was literally built on a sand dune).
Map from Transportgeography.org
But so far these developments have not occurred, at least not naturally. Despite China’s rapid growth (which includes 10%+ annual growth in resource rich regions like Gansu and Xinjiang), these regions have not transformed into the UAE of the East. Perhaps the answer is straightforward. People and money flow where it is easy to flow, like water finding its level and slowly eroding a path over time (but then, how do you explain the UAE?).
Perhaps industrial development of China’s western regions feels forced because it is forced – if there were truly that much potential, if it was that easy to connect to China’s inner Asian neighbours, then it probably would have happened already. So the question is, why has it not just happened?
It’s important to stress that what the government is proposing is not an investment in startup funds or an all-expenses-paid year in residence for new founders, but transport links and high-speed internet. This is the equivalent of building a WeWork in the middle of the Brecon Beacons and wondering why no one’s showing up. If there’s no life or community investment, then one cannot develop. The answer can only lie in an examination of the areas in question – why is there no community development? Why are Chinese young people – desperate for jobs, cheaper costs of living and a sense of purpose – not moving to what is essentially an unexplored frontier?
Perhaps the frontier is too… frontier-y. It’s too far removed, too much of a challenge. A barrier exists, physical or psychological, that prevents not just development but true integration with China’s true path. The cultural, social, and political conditions that allow places like Dubai to spring up and thrive are missing in China, despite the government’s best efforts to force start something. Despite centuries of nomadism and interregional trade, Xinjiang is not a melting pot.
Out of the loop
I can’t help but feel that a major reason that these regions have failed to modernise apace with the rest of China is because they’re not really seen as China by those in charge. Of course, from a colonial perspective, places like Tibet, Xinjiang and Inner Mongolia are Chinese territories, but culturally, socially, even historically, they still remain somewhat apart.
Successive Yuan, Ming, Qing, Republican, Nationalist and Communist dynasties have seen most of these regions enter and leave the Chinese state at least three times. The Qing expansion saw these areas become territories as opposed to provinces, only removing restrictions on Han migration in the 19th century and actively beginning to promote sinicisation. Though these regions remained largely autonomous, further integration with the Qing state began the process of erosion of minority way of life on the periphery, an early indicator of what was to come in the 20th century:
“Decline there was - not in Chinese vitality but in the political fortunes of the Inner Asian peoples. In Mongolia, Han Chinese penetration brought with it the pauperization of many Mongols. To the Muslims of Altishahr, Ch'ing rule in the nineteenth century meant infidel rule, war and the emigration of tens of thousands of Kashgarians out of their homeland and into the Ferghana valley and Tashkent.”
Under early CCP rule, after these territories were reintegrated into the whole, the construction of China’s official ethnic minority groups and the solidification of the hukou system concretised the ‘othering’ of those on the periphery vs those in ‘China proper’. The idea of these regions as ‘backwards’ or ‘behind’ is a key constraining factor in their ability to develop and grow. This mindset had been ingrained in the CCP’s administration of China since its inception and has continued to permeate policy and planning ever since:
“During the Third Five-Year Plan (1966–1970), a nationwide three-line layout was adjusted, and eastern coastal areas with more advanced industrial technology as well as the Sino–Soviet border areas were classified as first-tier regions. Some central and western regions with relatively backward economic development were classified as third-tier regions. Such areas as Guizhou, Sichuan, Shaanxi, Gansu, western Shanxi, western Henan, and western Hunan, and the rest of the country were classified as second-tier regions.” (A review of the balance of regional development in China from the perspective of development geography, Deng et al.)
The creation of Special Economic Zones deliberately exacerbated this difference, as the early CCP’s aim of a balanced developmental path was replaced with a “we need cash now” growth plan. This plan bolstered obviously profitable areas while cutting out the waste, essentially forsaking poor, rural, sandy, and subtropical regions for their breezy, well-connected brothers. Even if it was unintentional, this behaviour by the Chinese state made it clear that the interior and westernmost regions were unattractive not just to foreign investors, but to internal investors too.
In the present day, these regions are still associated with labour-intensive industries that are already seen as ‘backwards’ in the more developed coastal regions, such as cotton production or mineral and resource extraction. These are old industries, in a time when China is actively promoting AI and robotics. Any new industries would have to be built from the ground up, with a lot of labour and a lot of vision. Without serious investment from the government (in the form of cash, not fibreoptic broadband) this is not just an unattractive prospect, it’s bordering on impossible.
And it would be remiss of me to overlook issues of integration and segregation in these regions too. For reasons that are too numerous to name here*, places like Xinjiang and Tibet have often been labelled in the Chinese media as dangerous, unintegrated, problematic even. While they remain attractive tourist spots, it’s hard to think that the average Chinese youth would up and move somewhere with even more surveillance and markedly worse internet.
While there is less and less resistance to homogenisation and urbanisation, some peoples are still, dare I say, resistant to assimilation into the CCP’s futurist goals. The grand construction of a futuristic socialist utopia rubs up against their own ways of life and culture. And again, those who do not cling to this old culture, this old way of life, are more than happy to move to already established urban centres. They’re not sticking around to see if the government will invest just the right amount to help them build something new. They’re going to the new world, and leaving their old one behind.
A matter of time?
Even if geographically these places fall within China, in the political mindset of the Chinese ruling class (and perhaps the majority of Chinese too), these regions will always be a sort of frontier. For most of its purported 5,000 year history, these regions were not part of China at all. Coastal regions do not have to undergo sinicisation; the people who live there do not have to be taught that their historic way of living is anathema to the goals of the modern state. People do not have to be persuaded to move to Hangzhou, but I’ve yet to meet a young person ready to up and move out further west than Chengdu.
It may be too pessimistic to state that full integration of China’s outermost regions into a hi-tech, futuristic society is impossible. The fact that the state has failed (multiple) times in the past may be due more to the fact that they had the wrong approach rather than the wrong goals. Luckily, this seems to be something the contemporary CCP has realised. The more hesitant and accommodating attempts at industrialisation and assimilation have been abandoned for a more straightforward sinicisation that aims to steamroll resistance by both giving and taking away.
Urbanisation, education centres, the closing of places of worship, ending native language school programmes, Han migration and the promotion of inter-ethnic marriages are all methods used by the CCP to bring peripheral populations into the state and give them a ‘stake in its future’. This is also coupled with increased state surveillance and, under Xi’s regime, a reduction in ‘special treatment’ for China’s recognised minorities:
“Alongside calls for a ‘second generation of ethnic policies’, the leaders of the CCP are promoting cities as ‘melting pots’ where it hopes ethnic boundaries will soften, separatist tendencies will abate, and new forms of collective ‘Chinese’ subjectivity will take root. An ongoing crackdown on civil society means that space for resistance to this increasingly assimilatory regime is also shrinking.”
The Chinese party-state is a big fan of planning, and it’s clear that their ultimate aim is the homogenisation of the Chinese nation, which leaves no room for regional autonomy and orients the entire population to the state’s goal of global ascendancy and economic prosperity. Some of this planning is already bearing fruit. Ordos, an Inner Mongolian city once proclaimed to be China’s largest ghost city, has now blossomed to become a modern city of around 2 million people, complete with self-driving buses and gated communities.
But in reality, the majority of changes occurring on the periphery still focus on older, heavy industries, which, while crucial, are unattractive to those who do want to build a modern west. There is a need for the locals to be included in the vision of a modern China too, one where smart cities, green tech, and a functioning service industry that serves everyone. Essentially, it’s not just investment that is needed, but standards and commodities that appeal to a luxury, highly educated class that doesn’t want to sacrifice modern comforts for toil or harsh conditions. Ordos for all, if you will.
Where changes are taking place at a smaller level, often the local communities are left out, displaced, or turned into welfare communities dependent on continuous financial injection from the state. In Gansu, for example, where the state is actively trying to transform agriculture from smallholder production into commercial projects that combine market driven production with tourism, locals go from landowners to salaried workers, but again their ultimate goal seems not to be to modernise agriculture or revolutionise the countryside. Rather they wanted better lives for their children, away from the toil and harsh conditions of remote, rural life:
“I want my children to be good at school, so that they can enter a good university (…) Farm work is hard, working in an office is more comfortable. (…) I don’t want my children to come back [and work here]”
It is likely their children will not return to work or live there. If they do get into a good university, they are much more likely to move to the east, where life is easier, and nothing needs to be carved out of freezing plateaus or the plains of sun-scorched deserts.
*I do have podcast episodes on Xinjiang and Tibet if you’re interested in learning more about unification and problems of integration in these provinces.