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The Process of Economic Development in West Sichuan: the Case of Daocheng County

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The Process of Economic Development in West Sichuan: the Case of Daocheng County The Process of Economic Development in West Sichuan: The Case of Daocheng County Carsten A. Holz Economic development of a remote, mountainous region is a challenge for any country. This paper examines if and how economic development in a high-altitude backward region of China comes about. Is this region increasingly being left behind or does it manage to get on a development trajectory? The focus is on Daocheng County, Ganzi Tibetan Autonomous Region, West Sichuan. The key questions are: What forms of economic development are there, and how does this development come about? What is the role of government economic development policies, and how effective are they? What are the broader (social, cultural) consequences of economic development, and how are they being perceived by the population? The fact that West Sichuan is a predominantly Tibetan region adds a nationality dimension to the issue of economic development. Journal of Economic Literature classification codes. all China: Z32 Tourism Economics: Tourism and Development O25 Development Planning and Policy: Industrial Policy O12 Economic Development; Microeconomic Analyses of Economic Development L83 Industry Studies, Services: Sports, Gambling, Restaurants, Recreation, Tourism O23 Development Planning and Policy: Fiscal and Monetary Policy in Development O53 Economywide Country Studies: Asia including Middle East Keywords (all: China): economic development, tourism development, infrastructure development, poverty alleviation, backward region, fiscal transfers, Tibet Highlights: Explanation of how economic development comes about in one backward county of China Potential role of tourism in economic development Importance of fiscal transfers for initiating economic development Carsten A. Holz Division of Social Science Hong Kong University of Science & Technology Clear Water Bay Kowloon Hong Kong [email protected] +852.5261.6046 25 April 2018 I am grateful for comments, discussion, and feedback received from Doris Fischer, Angela Tritto, Andreas Gruschke, Astrid Zimmermann, Maris Gillette and the participants of the Jahrestagung of the Arbeitskreis fuer Sozialwissenschaftliche Chinaforschung, University of Köln (2 December 2017), and of the Program on Growth and Institutions, School of Economics and Management, Tsinghua University (12 January 2018). The work described in this paper was supported by a grant from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project No. HKUST 640413). 1 Contents A. Introduction ........................................................................................................................... 4 B. Daocheng County Fundamentals .......................................................................................... 8 1. Gross domestic product and aggregate expenditures .......................................................... 8 2. Employment ...................................................................................................................... 10 3. Government budget .......................................................................................................... 12 C. Tourism Development in Daocheng County ...................................................................... 14 1. Tourist numbers ................................................................................................................ 16 2. Hotel construction ............................................................................................................. 18 3. Marketing and Tibetan culture .......................................................................................... 20 4. Three models of tourism development ............................................................................. 24 a. Duikou model: Yading Tianjie ..................................................................................... 24 b. Private investor model: Riwa’s Holyland Corporation ................................................ 26 c. Tibetan-Han collaboration ........................................................................................... 28 D. Income generation ............................................................................................................... 30 1. Aggregate tourism income ................................................................................................ 30 2. Household income ............................................................................................................ 33 E. Evaluation ........................................................................................................................... 35 1. Daocheng County economic development characteristics ............................................... 35 2. Role of government .......................................................................................................... 36 3. Consequences of economic development ......................................................................... 38 F. Conclusions ......................................................................................................................... 41 2 Figures Figure 1. Daocheng – Yading Location Map ........................................................................... 47 Figure 2. Daocheng County Sector Shares in GDP (%) .......................................................... 48 Figure 3. Daocheng County GDP and Sector Value-added Real Growth Rate (%) ................ 48 Figure 4. Daocheng County Private Share in Sector’s Value-added (and GDP) (%) .............. 49 Figure 5. Daocheng County Sector Share in Private Aggregate Value-added (%) ................. 49 Figure 6. Daocheng County Ratios of Fiscal Expenditure to Revenues .................................. 50 Figure 7. Daocheng County Ratios of Budget Measures to GDP............................................ 50 Figure 8. Daocheng County Visitor Nights ............................................................................. 51 Figure 9. Daocheng County Monthly Distribution of Domestic Visitor Nights (2015, %) ..... 52 Figure 10. Daocheng County Hotel Price Availability 2016-2017 (Ctrip) .............................. 52 Tables Table 1. Sector Shares in GDP and Sector Value-added (%) .................................................. 53 Table 2. Aggregate Expenditure Component Shares (%) ........................................................ 54 Table 3. Daocheng County Population (2015) ........................................................................ 54 Table 4. Daocheng County Formal Employment (2015) ......................................................... 55 Table 5. Daocheng County Fiscal Revenue and Expenditure Shares (%) ............................... 56 Table 6. Daocheng County Hotel Count .................................................................................. 57 Table 7. Daocheng County Room Count ................................................................................. 57 Table 8. Daocheng County Tourism Income and Value-added ............................................... 58 Table 9. Daocheng County Household Income (2015) ........................................................... 60 Table 10. Daocheng County Government Funds Income and Expenditures ........................... 61 Table 11. Tourism-related Data, Economic Census 2013 ....................................................... 78 Appendices Appendix 1. Daocheng County Government Funds Income and Expenditure ........................ 61 Appendix 2. Daocheng-Yading Airport ................................................................................... 62 Appendix 3. Daocheng County Tourism Development Master Plan ...................................... 64 Appendix 4. Shangri-La ........................................................................................................... 67 Appendix 5. Daocheng County Road Access .......................................................................... 68 Appendix 6. Details on Tourist Numbers ................................................................................ 70 Appendix 7. Two Models of Tourism Development ............................................................... 74 Appendix 8. Daocheng County Tourism Income .................................................................... 77 Appendix 9. Revenue Diversification: Local Special Products ............................................... 82 3 A. Introduction Economic development in the People’s Republic of China (in the following: “China,” or “PRC”) is often viewed as economic transition from a socialist economic system to a more market-oriented system. For many underdeveloped regions of China, however, the challenges of economic development are the traditional development issues of how to raise the living standards of a predominantly traditional, agricultural society. That may be nowhere more apparent than on the Tibetan Plateau in the Western region of Sichuan Province (四川省). In the late 2000s, big changes occurred in West Sichuan. By 2011, even the remotest village had newly undergone electrification and every village enjoyed at least rudimentary road access. A large number of families, often the whole village, had sold their livestock (mostly in 2010), previously their sole source of income. They claimed that they had done so voluntarily rather than as part of the government program of returning pastures to grassland (退牧还草). A corollary seemed to be unemployment: In 2011, in a
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